Revitalising Gwadar: Islamabad pushes to unlock CPEC's flagship project’s potential

Gwadar Port, having been built over a decade ago, remains largely dormant. Islamabad has finally decided to increase traffic through the port, which remains the flagship project of the China-Pakistan Economic Corridor (CPEC).

The reason Gwadar Port remains underutilised is because of a lack of sufficient marketing efforts and expensive freight rates. As per Dawn, ‘highly informed sources’ claimed that Islamabad was dissatisfied with the pace of Gwadar port’s growth with respect to other ports in the region.

This has resulted in a stagnation in the employment opportunities that locals had anticipated as trade through the region remained at suboptimal levels. According to the most recent labour force survey conducted in 2021, Balochistan’s unemployment rate stood at a staggering 9.13 percent – the highest among provinces.

While the labour force survey for 2024-25 is underway, experts believe that the unemployment rate will not improve considerably. Aside from the lack of jobs created by Gwadar port, the region has not realised its full development potential. Basic utilities such as electricity and water face frequent shortages, which has resulted in protests from citizens who believe they are being neglected.

However, Islamabad is trying to tackle the issue of low freight traffic through the port by deciding to route 60 percent of all public sector cargoes through Gwadar. Moreover, in a high-profile meeting regarding the utilisation of the port, Planning and Development Minister Ahsan Iqbal directed authorities to attract Central Asian Republics (CAR) to transport their goods through the dormant port.

This arrangement is great news for both CARs and businesses located close to Gwadar. It will be mutually beneficial. The CARs, which are landlocked, will get another access point to transport their goods to International waters. At the same time, local businesses will witness higher traffic through the region, which could translate into more sales.

Owing to the high rates charged by Gwadar port, businesses in the region do not consider it as their primary port and resort to using other ports instead. Mr. Iqbal has already advised the National Logistics Cell to consider a lower rate for entities willing to transport cargo in bulk.

If businesses switch to Gwadar port, the transit time of goods could fall by up to 8 hours, as businesses will use Gwadar’s port instead of transporting their goods to Karachi first. This could also help alleviate some of the pressure of the heavy congestion that Karachi port faces. CustomNews reported a traffic backlog created at key terminals at Karachi port, where around 1000 containers were 'stuck' earlier this month.