Having served in the Merchant Navy before joining the IAS, I can claim to have visited almost all the ports in the Persian Gulf, specially the oil terminals. At the height of Iran-Iraq conflict we were picking up crude from Kharg, an Iranian island in the upper reaches of the Gulf which is its major oil export point, just as Ras Tanura is for Saudi Arabia. So I claim an expertise in the area of analysing ports, specially from the point of view of logistics and through my present calling, I can also now lay claim to understanding a bit of strategic compass.
With that caveat, let us have a closer look at the frenzy which has gripped Pakistan. CPEC to them is the panacea for all their economic ills and Gwadar is the best port in the world.
The frenzy is such that a even a reasonably sober twitter handle @karachipost came up with this:
https://twitter.com/Karachi_Post/status/733702952645472256
Similarly, I read a piece today in @Diplomat_APAC by @daimfazil giving five ridiculous reasons on a supposed superiority of Gwadar over Chabahar.
Let's find a framework for this. What are the qualities a port needs to become a great one. Per the Gwadar Port website, it has 3 berths at present with a plan to add 3 more (a multipurpose, a grain, and an oil berth). It's projected draught is 12.5 metres with which it claims to be able to handle 50,000 DWT (Dead Weight Tonnes, which denotes carrying capacity) vessels. Chabahar has 10 already, and is expanding to include a deep water berth which would be able to handle VLCCs (Very Large Crude Carriers) of 22 m draught or more.
Let's look at some of the other ports. Mumbai port has 26 cargo/container berths and 6 POL/Chemical berths; Karachi has 12; Nhava Sheva has more than 10, and Dubai (Jebel Ali and Port Rashid) which Gwadar is supposed to be threatening commercially has barely 102 berths, with VLCC POL supply terminals as well.
So we can quite clearly see that logistically, Gwadar is just a puny little dot.
Let's now see the hinterland that the two ports would serve. Gwadar can have cargo headed for either Xinjiang, or for Pakistan's internal consumption. The back of the beyond location of this port means that for a private business to switch from Karachi to Gwadar, comparable stevedoring and clearing agencies would be required along with a reliable rail link. That's not happening any time soon. Even if the infrastructure is complete, the soft support system in a hostile terrain would remain hobbled for a long tie to come.
Comparison with Chabahar is not even warranted, as Chabahar is coming up as a transit port for all of Central Asia and Afghanistan. Muhammad Daim Fazil posits it as a port for India to access Afghanistan and Central Asia through Afghanistan. Only if he had looked at maps. Route to Central Asia from Chabahar doesn't have to go through Afghanistan at all. Moreover, It gives India an alternative route to Russia and its Eastern Republics, as well as the 5 ex-Soviet nations. After Ukraine became independent, Odessa has come to be used less and less. Crossing the Suez has its own costs, so the Iranian North-South corridor would be very useful for India and most SE Asian countries. As a post on quora said (Joseph Boyle):
"Gwadar is simply unlikely to ever be profitable. It means going an unnecessarily long, long way over the world's highest mountains and through rebels to get to nothing - after all that you're still separated by water.
If you look at a globe and great circle routes instead of the deceptive Mercator projection, you see a direct, low, feasible route between China and the Middle East is going directly through Central Asia to Iran. Turkmenistan already has pipelines selling large volumes of gas to China, and is right next to Iran."
Singapore PSA found Gwadar unviable in the long run and left. China stepped in not because it found Gwadar viable, but because it looked at Pakistan as a client State and it was sure it would make Pakistan dance to its tune. China does not even have much of an use for operating this kind of port because it is already operating a ten times larger terminal in Fujairah, UAE, just across the Gulf of Oman. China will use it only to exercise its hegemony over its willing client State.
I do not foresee a gas or oil pipeline from Gwadar to Xinjiang as a part of CPEC, at least not yet. China is concentrating on pipelines from Kazakhastan. It's principal silk route runs via Urumqi-Kashgar-Almaty-Tashkent-Ashkabad-Tehran. From Ashkabad, Chabahar is directly connected. So Chabahar connects everybody to everybody. That's the reason Iran offered a connectivity to Pakistan as well, which I am sure Pakistan would find offensive. Gwadar by comparison is just a provincial port for Pakistan over high mountains which even China would not find viable.
Another oft-repeated argument in favour of CPEC is that it is a good strategy by China to bye-pass the Malacca choke. This makes no sense either, as China's consumption areas lie nearly 6000 kms to the East from Kashgar, the northern point of CPEC. In the event of a war, both China and Pakistan would do well to remember that Malacca straits at its narrowest choke point below Car Nicobar is 200 km wide, but the CPEC is just 75 kms away from North Kashmir - well within the range of BVR missiles, Prithvis and Brahmos. Gwadar lies directly in the line of Indian Navy, and would be the second one to be blockaded - After Karachi that is. China would definitely factor that in its strategic calculations. That CPEC infra is passing through a territory which legally belongs to India, and that it would be child's play for India to blockade Gwadar.
Now let's discuss CPEC's economic calculations. China plans to put in $46 billion over 10 years. $34 billion would build up a power capacity of around 17000 MW (though I have also heard figures of 7 and 10K MWs). The agreements are not on the table (so much for transparency). We don't know whether there is any element of a grant involved. From whatever sketchy information is available, it looks like a combination of loans for road and rail infra, and power plants to be built by the Chinese for which Pakistan has given a sovereign guarantee to buy all the power produced at a fantastic rate of PKR 18 per unit (INR equivalent 11.53). Even the power plants which are going to be all thermal variety are going to be put up at a minimum of $2 billion per GW (1 GW=1000 MW). India routinely builds its thermal power plants at less than $ 1 billion per GW. The average rate per unit on the India power trading exchange has been INR 2.50 for over a year. Bangladesh is buying 1100 MW from India at INR 6 per unit. This is a classical colony making exercise by China, which Pakistan establishment and the Army is quite excited with.
So it looks to me as if CPEC is a purely marketing exercise by China to rip off some good money from Pakistan for its thermal power companies which have to dismantle their old plants in the mainland to meet the emission norms agreed to by China at the Paris meet. It gives an excuse to the Army to rip off more money from the exchequer in the name of providing security and strengthening its occupation of Balochistan. It has got a 11% raise in its budget in a year in which GDP grew by 4.7%.
India need not even discuss this. CPEC route passes through a treacherous terrain prone to landslides. One stretch near Attabad was blocked by a landslide created a lake for over 5 years. All India needs to do is to target its missiles on N35 of Pakistan, otherwise better known as the Karakoram Highway.
So my advice to my Pakistani friends is - please don't parade CPEC and Gwadar to the world. It's not your salvation, it's your cross.
With that caveat, let us have a closer look at the frenzy which has gripped Pakistan. CPEC to them is the panacea for all their economic ills and Gwadar is the best port in the world.
The frenzy is such that a even a reasonably sober twitter handle @karachipost came up with this:
https://twitter.com/Karachi_Post/status/733702952645472256
Similarly, I read a piece today in @Diplomat_APAC by @daimfazil giving five ridiculous reasons on a supposed superiority of Gwadar over Chabahar.
Let's find a framework for this. What are the qualities a port needs to become a great one. Per the Gwadar Port website, it has 3 berths at present with a plan to add 3 more (a multipurpose, a grain, and an oil berth). It's projected draught is 12.5 metres with which it claims to be able to handle 50,000 DWT (Dead Weight Tonnes, which denotes carrying capacity) vessels. Chabahar has 10 already, and is expanding to include a deep water berth which would be able to handle VLCCs (Very Large Crude Carriers) of 22 m draught or more.
Let's look at some of the other ports. Mumbai port has 26 cargo/container berths and 6 POL/Chemical berths; Karachi has 12; Nhava Sheva has more than 10, and Dubai (Jebel Ali and Port Rashid) which Gwadar is supposed to be threatening commercially has barely 102 berths, with VLCC POL supply terminals as well.
So we can quite clearly see that logistically, Gwadar is just a puny little dot.
Let's now see the hinterland that the two ports would serve. Gwadar can have cargo headed for either Xinjiang, or for Pakistan's internal consumption. The back of the beyond location of this port means that for a private business to switch from Karachi to Gwadar, comparable stevedoring and clearing agencies would be required along with a reliable rail link. That's not happening any time soon. Even if the infrastructure is complete, the soft support system in a hostile terrain would remain hobbled for a long tie to come.
Comparison with Chabahar is not even warranted, as Chabahar is coming up as a transit port for all of Central Asia and Afghanistan. Muhammad Daim Fazil posits it as a port for India to access Afghanistan and Central Asia through Afghanistan. Only if he had looked at maps. Route to Central Asia from Chabahar doesn't have to go through Afghanistan at all. Moreover, It gives India an alternative route to Russia and its Eastern Republics, as well as the 5 ex-Soviet nations. After Ukraine became independent, Odessa has come to be used less and less. Crossing the Suez has its own costs, so the Iranian North-South corridor would be very useful for India and most SE Asian countries. As a post on quora said (Joseph Boyle):
"Gwadar is simply unlikely to ever be profitable. It means going an unnecessarily long, long way over the world's highest mountains and through rebels to get to nothing - after all that you're still separated by water.
If you look at a globe and great circle routes instead of the deceptive Mercator projection, you see a direct, low, feasible route between China and the Middle East is going directly through Central Asia to Iran. Turkmenistan already has pipelines selling large volumes of gas to China, and is right next to Iran."
Singapore PSA found Gwadar unviable in the long run and left. China stepped in not because it found Gwadar viable, but because it looked at Pakistan as a client State and it was sure it would make Pakistan dance to its tune. China does not even have much of an use for operating this kind of port because it is already operating a ten times larger terminal in Fujairah, UAE, just across the Gulf of Oman. China will use it only to exercise its hegemony over its willing client State.
I do not foresee a gas or oil pipeline from Gwadar to Xinjiang as a part of CPEC, at least not yet. China is concentrating on pipelines from Kazakhastan. It's principal silk route runs via Urumqi-Kashgar-Almaty-Tashkent-Ashkabad-Tehran. From Ashkabad, Chabahar is directly connected. So Chabahar connects everybody to everybody. That's the reason Iran offered a connectivity to Pakistan as well, which I am sure Pakistan would find offensive. Gwadar by comparison is just a provincial port for Pakistan over high mountains which even China would not find viable.
Another oft-repeated argument in favour of CPEC is that it is a good strategy by China to bye-pass the Malacca choke. This makes no sense either, as China's consumption areas lie nearly 6000 kms to the East from Kashgar, the northern point of CPEC. In the event of a war, both China and Pakistan would do well to remember that Malacca straits at its narrowest choke point below Car Nicobar is 200 km wide, but the CPEC is just 75 kms away from North Kashmir - well within the range of BVR missiles, Prithvis and Brahmos. Gwadar lies directly in the line of Indian Navy, and would be the second one to be blockaded - After Karachi that is. China would definitely factor that in its strategic calculations. That CPEC infra is passing through a territory which legally belongs to India, and that it would be child's play for India to blockade Gwadar.
Now let's discuss CPEC's economic calculations. China plans to put in $46 billion over 10 years. $34 billion would build up a power capacity of around 17000 MW (though I have also heard figures of 7 and 10K MWs). The agreements are not on the table (so much for transparency). We don't know whether there is any element of a grant involved. From whatever sketchy information is available, it looks like a combination of loans for road and rail infra, and power plants to be built by the Chinese for which Pakistan has given a sovereign guarantee to buy all the power produced at a fantastic rate of PKR 18 per unit (INR equivalent 11.53). Even the power plants which are going to be all thermal variety are going to be put up at a minimum of $2 billion per GW (1 GW=1000 MW). India routinely builds its thermal power plants at less than $ 1 billion per GW. The average rate per unit on the India power trading exchange has been INR 2.50 for over a year. Bangladesh is buying 1100 MW from India at INR 6 per unit. This is a classical colony making exercise by China, which Pakistan establishment and the Army is quite excited with.
So it looks to me as if CPEC is a purely marketing exercise by China to rip off some good money from Pakistan for its thermal power companies which have to dismantle their old plants in the mainland to meet the emission norms agreed to by China at the Paris meet. It gives an excuse to the Army to rip off more money from the exchequer in the name of providing security and strengthening its occupation of Balochistan. It has got a 11% raise in its budget in a year in which GDP grew by 4.7%.
India need not even discuss this. CPEC route passes through a treacherous terrain prone to landslides. One stretch near Attabad was blocked by a landslide created a lake for over 5 years. All India needs to do is to target its missiles on N35 of Pakistan, otherwise better known as the Karakoram Highway.
So my advice to my Pakistani friends is - please don't parade CPEC and Gwadar to the world. It's not your salvation, it's your cross.
As you have said "All India has to do is target its missiles on N35 of Pakistan. I would like to add to this that India should put pressure on Pakistan Army and China as well to stop their activities of development in our territory otherwise face the consequences. Keep all the options on the table. When push comes to shove China will have no option but to back off unless they want to get into prolonged destruction of their economy. I agree with every point sated by you and may I add China will soon realize the long term goals of USA is to free Balochistan and Kurdistan which will force China to abandon their hyped up strategy to encircle India. It is going to bite them and put some common sense in to PLA/CCP thugs.
ReplyDeleteJust want to add a few additional points here - Points about Pakistan that their media (or ours or others) hardly ever write about include the way status quos have been maintained in who runs what since 1947. In other words, the people who ran Karachi Port, continue to do so even today, though up in front you may see some fresh groups - a bit like the Ports of Bombay and Calcutta are even today. Control of port ops, media, everything Old Club Tie, so on and so forth.
ReplyDeleteBut in India, we had Vizag, Madras, Kandla, Goa, Cochin, Tutitcorin and other modern ports open up the country, while Pakistan even now depends totally on Karachi (and Bin Qasim).
Newspapers in Pakistan are costlier than cigarettes. Motorcycles and tyres cost a lot more than they do in India. And so it goes. New ports will open things up, sure, and that will be good for Pakistan. And India.
Karachi today as a port is like Kolkata is - fairly expensive and inefficient. (Cargo for Nepal and Bangladesh, for example, is routed via Vizag at a better price and more efficiently than traditional Cal) Mumbai Port is what it is, partially saved because of JNPT and Butcher Island.
Gwadar is not a threat to India. It is a threat to Karachi!!
DEAR SANJAY ,
ReplyDeleteHI , GREAT TO READ N ARTICLE WRITTEN BY A MERCHANT NAVY OFFICER WHO HAS RISEN TO BE AN IAS OFFICER .IAM A FORMER NAVAL OFFICER WHO SERVED 20 YEARS IN NAVY ND NOW SAILING IN MERCHANT NAVY FOR LAST 16 YEARS . WITH DEEP INSIGHT OF COMMERCIAL , BUSINESS INSIGHT YOU HAVE APTLY CLEARED THE GWADAR PORT AS NOT OF GREAT STRATEGIC VALUE . IHOWEVER HAVE SOME QUESTIONS . WHAT HAPPENS WHEN THE CHINESE DREDGE THE PORT FROM 10 METRES TO 14 OR 16 METRES TO GET 5TH GEN VESSELS , FROM 3+3 BERTHS OVER 20 TO 30 BERTHS IN NEXT 15 YEARS . THE 12 TRILLION DOLLAR CHINESE ECONOMY IS MAINLY CONCENTRATED IN THE COASTAL NORTHERN SOUTH WESTERN REGIONS , THE GWADAR PORT REDUCES THE CHINESE SEALINES OF COMMUNIATIONS CONSIDERABLY . BY LAYING OIL PIPELINES AND SHIFTING CONTAINERS OF IMPORT CARGO WHICH CHINA REQUIRES FROM WEST AND GULF REDUCES THE COSTS FOR THEM CONSIDERABLY TO TRANSHIP BY RAIL OR ROAD FROM THE COASTAL CHINESE PORTS . THE INFRASTRUCTURE CREATED IN GWADAR LAYS THE FOUNDATION OF CHINESE NAVY SHIPS AND SUBMARINES BERTHING FOR FEUL AND LOGISTICS VERY CLOSE TO INDIAN COAST AND CAN INTERDICT THE INDIAN SHIPS SUBMARINES AND CARGO SHIPS DURING WAR. COMMERCIALLY GAWADAR MAY TAKE 15 TO 20 YEARS MORE DEPENDING UPON CHINESE INTEREST , INVESTMENTS , ONCE FULLY DEVELOPED IT REMOVES THE CHINESE NECK FROM INDIAN GRASP OF MALACCA STRAITS AND GIVES THEM UNFETTERED ACCESS TO BAY OF BENGAL ARABIAN SEA AND INDIAN OCEAN. HOPE LEARNED OFFICERS LIKE YOU SHIFT TO MINISTRY OF DEFENCE OR SHIPPING FOR INDIAS STRATEGIC GROWTH