Revived Interest in Gwadar's New Airport Takes Flight
On Monday, the government greenlit the New Gwadar International Airport project, but with a revised cost of Rs51.3 billion. This staggering 138% increase in construction expenses over just five years reflects the sluggish progress of the China-Pakistan Economic Corridor (CPEC) initiative.
The Central Development Working Party (CDWP), helmed by Planning Commission Deputy Chairman Jehanzeb Khan, decided to hike the project's cost. The CDWP is tasked with scrutinizing and approving development initiatives, forwarding major projects to the Executive Committee of the National Economic Council (Ecnec) for final ratification.
The Ministry of Planning announced, "The second revision of the New Gwadar International Airport (NGIA) project, now valued at Rs51.3 billion, has been referred to Ecnec for further consideration." This revision was necessitated by adjustments to the scope and cost of the ASF camp and CAA residential buildings, to be funded and executed by Pakistan, as indicated in the second revised PC-1 submitted by the Aviation Division.
Recognizing the ongoing status of the Gwadar airport project, the CDWP instructed a review of PSDP requirements, taking into account the limited development portfolio and potential future revenues for the nation.
Of the total Rs51.3 billion, Rs18.1 billion is allocated from the Public Sector Development Programme, while the remaining Rs33.8 billion will be provided by China. China's contribution includes a grant of 1.52 billion yuan (approximately Rs34 billion), with an additional $17.5 million grant from Oman.
Initially slated for completion in 2018 as part of CPEC's phase-1, the New Gwadar International Airport project, like many other CPEC projects, is currently lagging behind schedule.
In response, the Planning Commission's deputy chairman proposed exploring combined solar and wind electricity generation to meet Gwadar Airport's future energy requirements.
The significance of the new Gwadar airport cannot be understated, as it plays a pivotal role in the development of Gwadar Port and its free zone. The Ministry of Planning is gradually regaining control of CPEC initiatives.
The original Gwadar airport project, initially approved in 2010 at a cost of Rs7.5 billion, underwent its first revision in 2015, with costs soaring to Rs22.2 billion. However, the recent second revision approved by the CDWP represents a staggering 138% increase over the 2015 cost. This escalation can be attributed to the incorporation of a detailed project design.
Notably, the Civil Aviation Authority (CAA) had presented the project for CDWP approval in October of the previous year, encountering some objections in the process.
The project's construction cost now includes Rs6.4 billion for the ASF camp and Rs2.5 billion for the CAA Residential Complex.
It is important to consider that when the original PC-I was approved in January 2010, the exchange rate was Rs85 against the US dollar. Subsequently, the first revision in January 2015 occurred within the framework of the CPEC initiative, coinciding with a strengthening dollar rate at Rs100. The recent second revision, proposed by the PTI government, comes at a time when the dollar has surged to Rs169 in September of this year.
The current airport's capacity is limited to small aircraft, whereas the new Gwadar airport is being designed to accommodate larger Airbus A-380 aircraft.
Additionally, the CDWP approved another development project with a cost of Rs2.7 billion. This project involves feasibility studies, detailed engineering design, and project readiness financing for KPCIP (Transport and Municipal Services). It encompasses urban municipal services, project management, financial management, procurement, and transport planning.