September 4th, 2022
Courtesy of Nikkei Asia, a report on an Omani offer to build Gwadar’s railway which conjures up memories of Pakistan port’s past:
A company from Oman is looking to invest in a train line that would link the Pakistani port town of Gwadar — envisioned as a key stop on China’s Belt and Road infrastructure network — with Pakistan’s main railway system.
The proposed multibillion-dollar project could go a long way toward resolving the seafront city’s lack of rail connectivity. It also conjures up the past of Gwadar, which was part of Oman for 175 years. But at the same time, Pakistan’s turbulent political situation is casting doubt on the prospects for pushing the plan forward and realizing the port’s potential.
Earlier this month, officials from Anvwar Asian Investments, an Omani project financing firm, met with officials of Pakistan’s Board of Investment and expressed interest in building a 1,087-kilometer railway between Gwadar and Jacobabad in central Pakistan. The investment would be worth $2.3 billion, and the Omani side says it is ready to provide an immediate tranche of $500 million as initial financing, according to the BOI.
Many see the plan as fitting, given the history that binds Gwadar with Oman — about 450 km away, across the mouth of the Gulf of Oman.
In 1783, the ruler of what was then Kalat State — now Balochistan — gifted Gwadar to Oman’s Taimur Sultan, a defeated prince on the run, who later mounted a comeback and reigned as sultan in Muscat. Gwadar remained part of Oman until roughly a decade after Pakistan’s inception, when Islamabad purchased it in 1958 with British help.
Many of Gwadar’s older residents still have Omani nationality as well.
Nasir Sohrabi, president of the Rural Community Development Council in Gwadar, said Oman has been the primary overseas destination for the people of Gwadar, even after the town became part of Pakistan. “Plenty of people from Gwadar live in Oman and do business or work as employees in many sectors, including the army,” he told Nikkei Asia.
Oman is well-regarded among many locals. Sohrabi added that when Gwadar suffered severe power shortages in 2001, Oman’s then-ruler, Sultan Qaboos, gave the city 45 power generators.
“This is one instance of the people of Gwadar having a special bond with Oman,” Sohrabi said.
The railway investment offer, if it comes to fruition, would significantly ease access to Gwadar and its Chinese-built and operated port, part of the $50 billion China-Pakistan Economic Corridor.
Despite being in the middle of BRI activity in Pakistan, no train lines run to Gwadar, and uncertainty shrouds plans for other railway upgrades under CPEC. Plans call for improving tracks between Peshawar and Karachi, the latter of which is about 600 km from Gwadar. But this project, known as Main Line-1 or ML-1, appears at risk of being shelved due to a disagreement on costs between Islamabad and Beijing, according to local reports in April.
“China wanted ML-1 to have a price tag of $9 billion, which Pakistan reduced to $6.8 billion,” an official who deals with the planning of federal projects in Pakistan told Nikkei Asia on condition of anonymity, as he is not authorized to talk to the media.
The official added that Islamabad wants loans at a lower rate than what Beijing is prepared to offer.
Sohrabi stressed that Gwadar can never be a successful major port without a strong railway network.
“Currently, the cargo which is unloaded at Gwadar Port is transported by road to Karachi [and] from there it’s shipped to other parts of the country via rail,” he said. “If this is the case, then it makes more sense to unload cargo directly at Karachi Port instead of Gwadar.”
Some see the Omani offer to develop Gwadar’s infrastructure as a quid pro quo effort to support CPEC. China is investing in an industrial park in Oman’s Duqm, a port town about 1,000 km south of the Strait of Hormuz, a key shipping lane.
Yet, Oman’s Anvwar Asian Investments is not the only one interested in building a railway link for Gwadar.
“A Singaporean company, Pathfinder, has expressed its interest to invest $5 billion to develop a high-speed rail network from Gwadar to Hub,” a town in Balochistan, Saeed Ahmed Sarparah, chairman of the Balochistan Board of Investment and Trade, told Nikkei. He added that the Singaporean offer is undergoing an assessment by the federal government.
Neither the Omani company nor the Singaporean one had responded to requests for comment as of publication time.
Some are skeptical about the chances of moving forward with such a high-stakes, long-term endeavor given the persistent political instability in Pakistan. The coalition government of Prime Minister Shehbaz Sharif is locked in a power struggle with the man he replaced, Imran Khan, amid an economic crisis. Khan now faces terrorism charges. And investments in Balochistan, whether by China or a Canadian gold miner, have become targets of separatists.
Aslam Bhootani, a member of the National Assembly representing Gwadar, told Nikkei he was unaware of the rail investment offers as he had “not been taken into confidence yet.”
But Bhootani said, “I do not see how Oman and Singaporean companies can benefit from investing in the rail network of Gwadar at such a turbulent time.”
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