Fact Box: ‘Gwadar Port’ and ‘Chabahar port’

China assumes control of Gwadar Port

China has taken control of Pakistan’s Gwadar Port located at the mouth of the Persian Gulf just outside the strategically important Strait of Hormuz. Previously, the control of the port was with Port of Singapore Authority (PSA) which was recently transferred to the China Overseas Port Holding Company.

Gwadar Port

• Why the port offered to China?
• What are the Advantages and Disadvantages for China?
• What Pakistan gets here?
• Why India is concerned?

Chahbahar Port

• Why Afghanistan needs to use port of Iran?
• Strategic location of Chabahar port.
• What is the India’s role in this whole gambit?
• Why the deal b/w Iran and Afghanistan will be a win-win situation for Afghanistan, India, Iran and also for US?
• But, what India may lose in this ploy?

China assumes control of Gwadar Port: Pakistan has handed over the operations responsibility of its strategically located Gwadar port to China’s Overseas Port Holdings. Previously it was with Singapore’s PSA (Port of Singapore Authority) International.

The port which has been bragged as Pakistan’s biggest infrastructure project, has failed as a business venture till date because the security situation in Balochistan discouraged PSA from investing in the development of the port and off-shore infrastructure. Besides, the government had also failed to transfer 584 acres under Navy’s possession to the port.

All these reasons forced PSA to move out of the 40-year management, operation, maintenance and development contract. The issue of land transfer is still unresolved despite the federal and provincial governments offering land elsewhere in lieu to the Navy.

Why the port offered to China?

There occurred some discords b/w the PSA International and Pakistani navy over land transfers, security issues and lack of infrastructure which led to PSA withdrawal from the contract.

What are the Advantages and Disadvantages for China?

Handling operations of Gwadar port will be not easy for due to the worsening security situation in Balochistan opposition fron Baloch people. The turbulence in Afghanistan which is going through transition is also likely to affect it. Gwadar was built by China but during its operation by PSA, it barely attracted any commercial traffic. There is also a lot of port development that remains to be built.

China can use the port to transport fuel into northwestern China, by transporting oil and gas from the port through pipelines that traverse Balochistan and the federal agencies to feed into China’s Xinjiang province. As China’s oil imports increase, it would prefer to insulate its energy transports from the troubled waters of the Straits of Malacca and the South China Sea.

China transports 60% of its oil through the Straits of Hormuz. Having Gwadar under its command would change the security dynamics for China.

Furthermore, if we go by the strategic perspective of ‘String of Pearls’then the move will strengthen China’s objective to have an ideal staging ground for its ships. China already has a firm bearing in Sri Lanka’s Hambantota port, it is attracting Maldives, though no port presence is planned yet. China is also creating a port in Chittagong, Bangladesh, as well as Sonadiya, near Cox’s Bazar.

What Pakistan gets here?

Pakistan expects China to develop the port further and turn it into a naval base.

Why India is concerned?

This development in Pakistan may have significant implications for India as the country thinks it is China’s attempt to encircle India (String of Pearls) and gain strategic advantage in the region. India has apprehensions that these ports could be used for military purpose as well.

It may be to counter this India has bolstered its relations with Oman,though there is no security presence there yet. India has been stressing to develop the Iranian port of Chahbahar.

About Chahbahar Port:

Afghanistan and Iran inked an agreement which will permit Afghanistan to use Iran’s south-eastern Chabahar port for shipments and trade.

Why Afghanistan needs to use port of Iran?

• Afghanistan is a landlocked country thus it needs to use Iran’s port for its shipments and trade.

Strategic location of Chabahar port

• Chah Bahar is Iran’s southernmost city.
• Iran’s closest and best access point to the Indian Ocean.
• It is the only Iranian port with direct access to ocean.
• For this reason, Chabahar is the focal point of Iran for development of the east of the country through expansion and enhancement of transit routes among countries situated in the northern part of the Indian Ocean and Central Asia.
• Chabahar is just 72 km west of Pakistans Gwadar Port, being built with Chinese help.

What is the India’s role in this whole gambit?

• A plan being finalized by India to construct a 900-km railway line that will connect Chabahar port in Iran, being built with Indian assistance, to the mineral-rich Hajigak region of Afghanistan.
• When finished, this line will throw up both geo-political and economic opportunities for India.

Why the deal b/w Iran and Afghanistan will be a win-win situation for Afghanistan, India, Iran and also for US?

Afghanistan:

• Access to the sea.
• Decrease in dependence on Pakistan.
• This will resolve trade related transit issues of Afghan traders and thus promote trade and commerce.

India:

• Increase in Indian influence in Afghanistan.
• Increase in strategic presence of India in the region.
• It will open opportunities for Indian companies to explore Afghanistans mineral wealth, believed to be worth $1-3 trillion, for mutual benefit.
• It will add to the economic rationale for Indian investment in Chabahar.
• Once the entire network comprising of road, rail and port is in place, it can become a launching pad for greater economic and strategic involvement of India in the oil and mineral-rich Central Asia.

(Behind the curtains):

• It is believed that the Chabahar port is being financed by Indian government in order to maintain Iranian and Indian influence in Afghanistan after US forces leave Afghanistan in 2014.
• It is also believed that this is a move by India in order to counter Gwadar port of Pakistan.

Iran:

• Business opportunities for Iran as its facilities are used.
• Chabahar port being built with Indian assistance
• Iranian influence in Afghanistan increases.

US:

• Relieves the pressure on the US-backed Afghan Government to rely on trade routes via Pakistan, as relations b/w US and Pakistan have seen substantial restrains in recent times.
• The agreement b/w Iran and Afghanistan will assist Afghan traders including those directly working with US contracting companies as they will now be able to use the south-eastern port – Iran’s only port with direct access to the sea – for importing and exporting goods.
• Relief to US/NATO officials as the shutdown of NATO supplies from Pakistan has induced enormous setback in terms of finance to US/NATO.

So, except Pakistan which looses business in the process, it is a win-win situation for all.

But, what India may lose in this ploy?

• Nevertheless, India’s larger collaboration with Iran in Chabahar (and, presumptively, in other areas) will more or less surely disturb US, whose support is necessary if India is to play a greater role in the region.

Month: Current Affairs - February, 2013

Category: Places in News Current Affairs