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Industrial zones in Gwadar: worthy of attention

Industrial zones in Gwadar: worthy of attention

Gwadar Port has the potential to become the industrial crown of the country. It can transform the Pakistan’s economic status forever. It will enjoy prime importance because of its geo-strategic location marking the confluence of South Asia, West Asia and Central Asia. The Gwadar Free Trade Zone will open up many more possibilities for the region. Gwadar, after completion of port project is expected to become the ‘boom’ town in the next few years. A special industrial development zone with an area of 4,000 hectare has been proposed for setting up various industries in Gwadar. The export processing zone has also been planned for assembling plant and other industries. Oil storage yard and refinery have also been proposed in the north of Gwadar town.

The proposed industrial zones in the port city of Gwadar would contribute to the harnessing of Balochistan’s potential in natural resources and development of heavy and large-scale industries, petrochemicals and manufacturing. The China-Pakistan Economic Corridor (CPEC) and Gwadar port are expected to usher in a new era of industrial development in Balochistan. Balochistan possesses enormous industrial potential in key sectors — agriculture, livestock, fisheries and minerals. There are greater investment opportunities in all sectors of provincial economy for exploiting the industrial potential of the province. A large number of agro-based, livestock-based, fisheries-based and mineral-based industries can be set up in the province.

With the functioning of industrial zone, Gwadar would become a hub of industrial and trade activities. The 3000 acres of land have already been reserved for the development of Gwadar Industrial Estate (GIE) to meet the demand of industrial plots and to cope up with the needs of modern industrialization in the port city. Located at Karwat on Makran coastal highway about 40 km from Gwadar, the GIE is the first industrial estate of the emerging port city. Over 1,100 plots have been allotted to industrialists in the estate. GIE would be the biggest industrial estate in Balochistan. According to the master plan of GIE, 1000 acres of land would be developed in the first phase. The industries planned to be developed in the GIE include small manufacturing; high-tech electronic fabrication and assembly plants; metal and wood fabrication and assembly; PVC housing & extrusion; re-packaging; fish processing & canning; life engineering; textile & garments; food & flour mills; and refrigeration and cold storages. Ware housing, buildings, commercial plots, support services and other facilities have also been planned to promote industrial activity in the port city. The GIE master plan also includes the setting up of flatted factories in order to provide services to the future small industrial and commercial enterprises in Gwadar. The housing schemes for workers and low-income groups of people have also been planned.

Pakistan may seek help from China, its closest friend in order to develop automobile industry in Gwadar. China’s vehicle market is the world’s third-largest behind the United States and Japan, but the after-market segment is in its relative infancy. In the United States and Europe, after-market sales account for roughly 70 percent of the auto industry. According to an estimate, after-market sales accounted for one-third of the total industry in 2002 in China. It totalled roughly $23.7 billion in 2004. The sector has been growing at 8 percent a year and is on track to reach $31 billion this year. China’s auto market has gone into overdrive in the last five years as millions of Chinese bought their first cars. Now, the market for replacement parts and service centres is racing to catch up.



The government can mobilize the private sector for setting up the manufacturing and assembling units in the new port city of Gwadar. The country has already announced a 15-year tax holiday for the proposed EPZ that has been planned near the Gwadar port for local and foreign investors. Pakistan automobile market is dominated largely by Japanese and Korean manufactures like Suzuki, Honda, Toyota, Hino, Hyundai and Mazda. Many foreign manufacturers including Chinese are reportedly in negotiations with Pakistan to start assembly operations in the country. These manufacturers may be lured to establish the manufacturing and assembling units in the new port city of Gwadar. Serious efforts on the part of the government can start at least assembly operations in Gwadar. The assembling units in the country are already assembling most of the world leading brands and the government can facilitate the private sector to set up assembling units in Gwadar.

There is a high need for establishing roads and warehousing facilities at Taftan, Chaman and Torkham borders in order to make full use of Gwadar Port. The future scenario necessitates the establishment of a strong, well-coordinated and metalloid highway and road and rail network spreading across the province and interlinking the major commercial centers in Balochistan. The CPEC is perhaps the answer. It is worth mentioning that about 35 percent of entire network of national Highways of the country pass through Balochistan. The international, national and inter-provincial highways passing through Balochistan include Pak-Afghan Highway, Pak-Iran Highway, Balochistan-NWFP Highway, Balochistan-Sindh Highway and Balochistan-Punjab Highway.

Gwadar port is the essential part of mega CPEC project. The CPEC involves construction of highways, railways and energy pipelines connecting western China with Pakistan and the Persian Gulf. The two countries signed 51 deals worth billions of dollars mostly relating to the CPEC project. Located at the crown of the Arabian Sea, Gwadar port in Balochistan will open up an energy corridor from Central Asia and the Gulf across Pakistan to western China.

Lack of infrastructure is key reason that discourages investment for industrial development in Balochistan. The ongoing mega development projects like Gwadar deep-sea port would make the province a hub for regional transport more effectively for land locked Afghanistan and Central Asian states. This would accentuate the existing road network in Balochistan. Therefore Balochistan urgently needs a mega road sector development project to cope with the new circumstances after the completion of mega projects in the province and expected surge in economic activities in the province. The Asian Development Bank has already approved construction of Gwadar-Saindak Highway taking the international highway to the borders with Afghanistan.

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