Parallel ports

Published: May 17, 2015
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Just as India wants to build up Chabhar to open up new trade routes, China wants to build up Gwadar to open up trade routes and economic exchanges through Pakistan and northward back to China. PHOTO: AFP

Just as India wants to build up Chabhar to open up new trade routes, China wants to build up Gwadar to open up trade routes and economic exchanges through Pakistan and northward back to China. PHOTO: AFP

Situated on the same coastline but separated by less than 200 kilometres, Gwadar and Chabahar are both Baloch towns but the former belongs to the Pakistani Balochistan and the latter to the Iranian one. So as seaports belonging to two separate but neighbouring countries, the two are physically too close for comfort as competing seaports. More so because both are located almost at the mouth of the Strait of Hormuz through which pass about 35 per cent of the world’s sea-borne oil shipments and 20 per cent of the oil traded worldwide. More than 85 per cent of these crude oil exports go to Asian markets — Japan, India, South Korea and China.

The geopolitical implications of these two upcoming seaports in such close physical proximity are enormous as their respective sponsors, China and India — two regional rivals — could either step on each other’s toes while competing, sending the region into an economic tailspin or cooperate for achieving the potential of the Asian century. The rivalry between India and Pakistan could also muddy the seawaters in the region in case the two try to turn competition into confrontation. However, the Chinese presence in the equation is likely to help avert such a crisis. Just as India wants to build up Chabhar to open up new trade routes and economic exchanges through Iran and northward, China wants to build up Gwadar to open up trade routes and economic exchanges through Pakistan and northward back to China. The main reason India wants to develop Chabahar is to allow itself easier access to Afghanistan (where it has fostered close security cooperation and economic interests over the years) and Central Asia, an access that Pakistan ostensibly for its own security reasons, has consistently denied to India by refusing to let it use Pakistani territory for transit to and from Afghanistan.

India, Iran and Afghanistan have signed an agreement to give Indian goods, heading for Central Asia and Afghanistan, preferential treatment and tariff reductions at Chabahar. A strategic partnership between India, Iran and Russia is intended to establish a multimodal transport link connecting Mumbai with St. Petersburg, providing Europe and Central Asia access to Asia and vice versa. India and Iran are also discussing building a gas pipeline between the two countries along the bed of the Arabian Sea to bypass Pakistan, using the Chabahar port. Both countries are pondering the delivery of natural gas produced in Turkmenistan with Indian assistance to north Iran while the Islamic Republic will send natural gas from its southern deposits to Indian consumers. India has also finalised a plan to build a 900km-long railway line from the Bamiyan province of Afghanistan to the Chabahar port. New Delhi has already spent $100 million on building a 220-km road in Nimroz province of Afghanistan. The road will be extended to Chabahar. Further Indian investment on Chabahar has been held up pending the finalisation of a nuclear agreement between Iran and the US.

No such stumbling block is in the way of Chinese investment in Gwadar, the nearest warm-water seaport to the landlocked, but energy-rich Central Asian republics and landlocked Afghanistan. The Gwadar Port is expected to start operating full steam by the end of 2015. It is owned by the Gwadar Port Authority, a public sector entity, and operated by a state-run Chinese firm — China Overseas Port Holding Company. China has both financed and constructed the port because it opens up a route for transporting Middle East oil by a 3,000km-long land route from the Gwadar port to Kashgar, the northwestern Chinese city. Oil from the Middle East is to be unloaded at Gwadar and transported to China by rail and road. China is building the much talked about economic corridor costing around $12 billion connecting Gwadar to China’s Xinjiang via roads, railways and pipelines to transport oil and gas. This would also act as a bridge for China’s planned maritime Silk Route meant to link more than 20 countries as part of a trans-Eurasian project.

Published in The Express Tribune, May 18th,  2015.

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Reader Comments (13)

  • unbelievable
    May 18, 2015 - 2:56AM

    Oil from the Middle East is to be unloaded at Gwadar and transported to China by rail and road.
    .
    Common myth … suggest you talk to someone who is familiar with transporting the quantities of oil need to replace the ships China currently uses. I also suggest you try and drive to China sometime – don’t try it during winter because it’s impassable because of weather. If this economic corridor is based on China oil then your talking about an enormous pipeline .. the first part through a various dangerous territory subject to terrorist attacks and the later through a very difficult mountain that will pose enormous technical challenges. I suspect the risk adjusted cost of such pipeline would never pencil out. Recommend

  • Sandip
    May 18, 2015 - 4:09AM

    @unbelievable: Add to it the fact that part of the pipeline has to travel over Indian territory and the project becomes a non-starter from the beginning itself.Recommend

  • JJJackxon
    May 18, 2015 - 5:58AM

    All the more reason for India to lay careful and calibrated plans to re-take and liberate Pakistan Occupied Kashmir at the earliest possible opportunity. Military and political and diplomatic capabilities should be put in place in anticipation of such an opportunity.Recommend

  • Humza
    May 18, 2015 - 7:49AM

    @unbelievable: I suppose brighter minds have thought about it before investing billions in the project. There is obviously benefit to both China and Pakistan on a scale not previously enjoyed for such a project costing billions to be undertaken. I don’t think the Iranian Port at Chabahar can amount to much unless and until complete stability exists in Afghanistan. You could say the same thing about the Western Corridor in Pakistan but the Eastern Corridor is going through very secure and safe areas in the country in Punjab.Recommend

  • G.Burns
    May 18, 2015 - 9:51AM

    @unbelievable: Gosh, where to begin with the precedents…Peru LNG Pipeline, Ahwaz-Astara Pipeline, Kinder Morgan/Trans Mountain Pipeline (Canada), Transalpine Pipeline. Pakistan already has one of Asia’s most developed gas transmission and distribution networks and it works very well indeed despite all the troubles in the country. Gas network is nearly equal (in terms of total distance) to that of India, a geographically larger country. There is ample expertise, local and foreign, to get this done.Recommend

  • JSM
    May 18, 2015 - 10:06AM

    “Further Indian investment on Chabahar has been held up pending the finalisation of a nuclear agreement between Iran and the US.”

    India is not a clients state- it works in its own interest. Last week, it has signed agreement with Iran for development of Chabhar posrt.Recommend

  • Woz Ahmed
    May 18, 2015 - 11:19AM

    Oil by train or truck is ridiculously expensive, add in loading and unloading costs, this is not viable. Remember, China has oil and gas pipelines from its northern neighbours such as Russia an Khazakstan.

    Oil consumption is on the west and south west, where tankers can easily operate.

    A pipeline might be viable.

    This analysis is very interesting for those who want to understand the subject better.

    http://china.praguesummerschools.org/files/china/1china2012.pdfRecommend

  • Vectra
    May 18, 2015 - 3:19PM

    After reading article,if looks like India’s Chabahar plan is much more ambitious than China’s Gwader.India has also made much more progress in rail and road connectivity to and from Chabahar whereas in Gwader there is no connectivity at all and CPEC look like will remain in political limbo.The other point is given terrorism fear in pakistan the world may not berth or pass their container ship through Gwader but will prefer Chabahar given its safe in Iranian authorities hand and near to Central Asia and Europe than Gwader given Iran nuke negotiation gets resolve.Most like Gwader will be used for trade with China alone in future while Irans Chabahar may become more global with assistance and help provided by IndiaRecommend

  • Vectra
    May 18, 2015 - 3:19PM

    After reading article,if looks like India’s Chabahar plan is much more ambitious than China’s Gwader.India has also made much more progress in rail and road connectivity to and from Chabahar whereas in Gwader there is no connectivity at all and CPEC look like will remain in political limbo.The other point is given terrorism fear in pakistan the world may not berth or pass their container ship through Gwader but will prefer Chabahar given its safe in Iranian authorities hand and near to Central Asia and Europe than Gwader given Iran nuke negotiation gets resolve.Most like Gwader will be used for trade with China alone in future while Irans Chabahar may become more global with assistance and help provided by India.Recommend

  • John B
    May 18, 2015 - 3:39PM

    The purpose of Gwadar Port is for export of Chinese goods and not for oil imports. It is easier and cheaper for china to import oil from Russia. In any case, the objective of the port is China economy, based on China industry and has nothing to do with PAK. Hence this port will not bring economic prosperity to PAK due to various reasons.

    In contrast, the Chabahar port is a bidirectional port to all the parties beyond Iran and India. Neither China nor India have any plans to compete with each others ports since the export and import directions are different, and commodities are different, and the markets are different. They have more to gain by keeping both the ports open.

    Now, please tell me how the Gwadar port benefits PAK exports and facilitates its import.

    Hormuz is Iranian territory and international shipping lane, and no will be idiotic enough to bring in military confrontation there. It defies the very purpose of these ports. So, all the nonsense of strategic port for china /India goes out the window.

    In contrast, the land route from India through PAK to Afg and beyond as per the MFN and other agreements, which PAK failed to implement, will benefit PAK economy and and will be in synergy with China, India, PAK and other central Asian countries interests and complement both ports.

    If only PAK leaves the war ships docking on these ports paranoia, she can see how little PAK stands to gain in Gwadar ports. Recommend

  • Vectra
    May 18, 2015 - 4:02PM

    The Chinese themselves denied the pakistan request of making the port for naval activity because making a civilian port a naval port and berthing foreign warship there will definitely draw ire from India and US as well and put Gwader directly in Indian Navy’s Missile radar and China is not in favor of confrontation with India in Indian Ocean and open a new front at a time it is facing serious challenges from US in South China sea and China knows challenging India in its backyard is a nightmare and have the potential for direct military confrontation involving multiple party from Indian Ocean to SCS in Indo-Pacific region.Recommend

  • ahmed
    May 18, 2015 - 4:33PM

    @John B, please check the stats, china is importing majority of Oil not from russia, sorry your thesis is based on inaccurate information. on the contrary russia could be the biggest gas exporter. Recommend

  • Virkaul
    May 19, 2015 - 10:41AM

    @unbelievable:
    You are right Sir. This article is written without proper technical knowledge and. research. It doesnot say whether oil will be transported via pipeline or rail or road tankers. Oil is consumed in Eastern China around Shanghai, Beijing, Goungzhou and not in Kashgar or central China. No one quotes the distance between Kashgar and Shanghai. It may be noted that cost of transporting oil to such distances via pipeline is over 4 times the shipping cost.

    I am not sure if the reporter has ever visited the terrain of Karakoram mountains and the condition of roads there. True, these can be improved but the new mountains are prone to landslides. Laying a railway line to Kashgar will be a daunting task for the Chinese.

    The reporter also fails to analyse the effect of present ports in the region like UAE, etc. Does CPEC really make economical viability? I wonder.Recommend

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