Delay in Gwadar airport’s commercialisation criticised

ISLAMABAD: The New Gwadar International Airport, developed with a $230 million grant by China, remains largely inactive due to the failure of aviation and port authorities to market the facility internationally or engage consultants for its commercialisation.

Presiding over a review meeting, Planning Minister Ahsan Iqbal was flabbergasted over a two-page presentation that showed mostly paperwork about various facilities at the airport inaugurated by Prime Minister Shehbaz Sharif and Chinese Prime Minister Li Qiang last month.

He “strongly criticised the Pakistan Civil Aviation Authority (PCAA) and Pakistan Airport Authority (PAA) for delays in developing a comprehensive plan to commercialise the airport”, an official statement said.

The Civil Aviation and Airport Authority officials said that approvals had been accorded for allotment of space to government departments, PIA, ground handling agents, and other stakeholders for cargo sheds, courier services and traffic guidance systems in the administration block while the tender was being issued for cold storage.

Ahsan gives airport authority three weeks to submit comprehensive plan with clear timelines

Also, the meeting was told that expressions of interest had been invited for warehouses for commercial entities, setting up of the hotel, and maintenance-repair-overhaul (MRO) facilities on lease at the airport while space had been allocated to Pakistan State Oil for a fuelling facility.

Talking about the three-year plan, the meeting was told that steps would be taken to initially complete the process for the award of essential facilities, passenger facilitation, etc., and more commercial concessions would be operationalised depending on the passenger flow and flight operations.

This did not go well with the minister, who expressed his displeasure and dissatisfaction and observed that these arrangements, along with a commercial plan, should have been started two years before the completion of the airport capable of handling large aircraft like Airbus A380s and Boeing 747s.

He said China had built the airport according to international standards, but there has been total disappointment and zero progress on Pakistan’s side.

Mr Iqbal observed that the relevant aviation and airport authorities should have operationalised the facility within six months of its completion and should have approached the international airlines and governments to explain the strategic and economic benefits of using Gwadar Airport for shorter distances compared to other long-haul flights or flights using multiple stopovers to reach long distances like African destinations.

He said the best international firms should have been engaged to design marketing plans, including discounts and incentives.

Mr Iqbal highlighted the critical importance of positioning Gwadar as a hub for international airlines. He stressed that if airlines are not attracted within six months of inauguration, the likelihood of success diminishes over the years.

To incentivise long-haul flights from regions such as South Africa and Australia, the minister proposed providing attractive rates for at least five years, emphasising technical landings as a key strategy, an official said.

Modern facilities, limited progress

Constructed with a $230m grant from the Chinese government, Gwadar Airport features a 3,648-metre runway and a 14,000-square-metre passenger terminal equipped with auxiliary facilities, including air traffic control, community hospital and utility services.

The airport has an annual passenger capacity of 400,000, expandable to 1.6m.

PAA Additional Director General Air Vice Marshall Zeeshan Saeed explained safety evaluations and airfield regularisation, assuring operational clearance by December. Project Director Faiz Ullah Khattak and PCAA Director General Commercial Abdul Basit provided updates on ongoing initiatives, including allotments for government departments, warehouses and tenders.

“However, the minister expressed disappointment at the two-year delay in commercialisation planning and directed the PCAA to expedite efforts to attract airlines, develop air cargo facilities, and establish business partnerships with an international focus,” the statement said.

Highlighting the need for a market-driven approach, the minister emphasised that a market analysis should have been conducted before the airport’s inauguration.

He pointed out that international airlines currently using Oman and Dubai for technical landings could find Gwadar a cost-effective alternative and instructed officials to position Gwadar Airport accordingly.

In addition to passenger traffic, the minister stressed the urgent need to establish air cargo facilities, directing the PCAA to engage global logistics companies such as DHL and FedEx to kickstart operations and prioritise cargo utility.

To enhance airport utilisation, the minister urged the development of commercial facilities such as restaurants, duty-free shops and recreational amenities. Citing examples like Bangkok’s Don Mueang Airport, which features a golf course between runways, he proposed leveraging unused airport land for similar innovative projects to attract travellers and businesses alike.

The minister concluded the meeting by setting a three-week deadline for PAA officials to present a comprehensive commercialisation plan, including clear timelines and strategies for engaging stakeholders.

He reiterated the need for immediate and collaborative action to establish Gwadar Airport as a strategic hub for regional and global connectivity, ensuring its contribution to Gwadar’s economic development and Pakistan’s broader growth ambitions.

Published in Dawn, November 22nd, 2024