At a recent high-level meeting, Pakistani Prime Minister Shehbaz Sharif discussed ambitious plans for the country’s southwestern Port of Gwadar, including a directive to route 50 percent of all public sector cargo, currently handled through Karachi, to be brought through Gwadar.
Almost a decade ago, when Pakistan and China launched the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) as the flagship project of China’s ambitious Belt and Road Initiative (BRI), Gwadar was envisioned as an important port in the network and an economic and transshipment hub.
What attracted China was Gwadar’s unique geopolitical location — at the entrance of the Strait of Hormuz, an important waterway where over one-sixth of global oil production and one-third of the world’s liquified natural gas (LNG) pass. As a natural deep-sea port, Gwadar has the potential to accommodate large cargo shipments.
But, regardless of these promising attributes, a decade later, the port remains underutilized, with minimal revenue-generating shipments. In 2023, only 17 ships docked at Gwadar, a stark contrast to the 441 at Sri Lanka’s Hambantota Port, which a Chinese ports managing company also manages.
Meanwhile, Karachi, Pakistan’s largest port and one of the three seaports in the country handled 1,767 ships during the 2023-2024 fiscal year.
Currently, 95 percent of the country’s imports and exports are managed through Karachi and Bin Qasim ports, with Karachi alone handling three-quarters of the total cargo. But, despite serving as the country’s trade lifeline, these ports are increasingly strained by congestion, primarily due to insufficient infrastructure development and ever-increasing cargo volumes that are gradually exceeding the ports’ capacity.
As much as this situation underscores the potential of Gwadar as an alternate hub for trade, it also highlights the urgent need to expand the port’s capacity and the development of a robust transport network capable of efficiently handling large-scale cargo operations.
At present, Gwadar has only three berth facilities and relies entirely on trucks for transportation. Globally, large ports leverage rail networks for cargo shipments, which are more fuel-efficient, cost-effective, and capable of carrying larger bulk cargo without disrupting traffic. Although there were some speculations about plans for a railway line between Pakistan and China, there has been no progress, partially because of the huge costs involved.
On the other hand, persistent security challenges in Balochistan and the complexities surrounding who handles the port are just two of the many reasons why Gwadar has remained underutilized nearly two decades after its construction and a decade after its integration into CPEC.
Prime Minister Sharif’s recent directive may appear to be part of a strategy to reaffirm the importance of Gwadar Port and CPEC, or a potential response to the pressure from Beijing. After the “all-weather friendship” seemed to be wavering over continuous delays in CPEC projects and the deteriorating security situation in Balochistan, with a number of attacks in the past and more recently in the context of a string of attacks across the province on August 26.
Initially, China may have overlooked or deliberately downplayed Balochistan’s longstanding tensions with Islamabad, when strategic advantages outweighed the challenges. However, the continuous attacks on Chinese nationals in Pakistan, the surge in attacks throughout the province, mass protests by the citizens in Gwadar and project delays have put the bilateral relationship at a crossroads.
Sharif has been pushing for the accelerated implementation of previously agreed-upon projects, including the functionality of Gwadar Port and advancing Memorandums of Understanding with China, its largest foreign investor. But his reassurances to China seem inadequate when underlying issues remain unaddressed.
Pakistan’s security challenges and delays are not the only issues that worry China. In recent years, Beijing has been considering shrinking the scope of BRI under its new “Small and Beautiful” strategy, aiming to scale back its expansive BRI projects in favor of more manageable projects. This recalibration also reflects the Chinese economy’s current struggles, including underperformance compared to the pre-COVID era, and the persistent real estate crisis at home.
But despite Pakistan’s political and security crisis, and China’s economic challenges, Beijing is not ready to let go of Gwadar. The recent visit to Gwadar by a Chinese delegation, led by Wang Fukang of China’s Ministry of Foreign Affairs, took place amid mass gatherings, protests and at least two weeks-long sit-ins by the Baloch Yakjehti Committee, a Balochistan rights movement. The meeting at the Gwadar Port discussed Phase 2 of CPEC projects.
Currently, Gwadar Port (if functional) can only handle around 11 million tons of bulk cargo annually, which is around 17 percent of what Pakistan’s largest port, Karachi can handle. This stark difference again casts doubt on the feasibility of the Prime Minister’s directive to shift 50 percent of public cargo to Gwadar.
Looking ahead, the China Overseas Port Holding Company (COPHC), which operates Gwadar Port, has outlined an ambitious expansion plan. By 2045, the company aims to increase the port’s capacity to 400 million tons of cargo per year, by adding another 100 berths.
No doubt Gwadar has the potential to be developed into an important regional trade hub, but its current infrastructure and security challenges can barely support 20 percent of the country’s cargo, let alone 50 percent. As the government presses forward, questions are being raised if any realistic steps are being taken to realize Gwadar’s immense potential, or if the critical gaps will continue to be overlooked.