Ahmed Khan Malik

The shipbreaking sector has proposed that the government develop a special economic zone (SEZ) in Gadani, the coastal town of Balochistan.

Gadani is home to the world's third-largest ship-breaking yard, comprising approximately 132 plots. In the 1980s, it was leading shipbreaking yard, but competition from newer facilities in Alang, India, and Chittagong, Bangladesh, has significantly reduced its output. Currently, the yard employs around 6,000 workers and produces less than one-fifth of the scrap it did in the 1980s. Shipbreaking is the process of disposing ships off by dismantling them for reusable parts or for extraction of metals as raw material. Ships are driven up to the shoreline and taken apart manually.

To revitalize the ship-breaking industry and stimulate economic growth in the region, industry stakeholders are advocating for the establishment of an SEZ in Gadani. This initiative aims to provide a structured environment that offers various incentives to attract investment and enhance industrial activities.

The establishment of an SEZ in Gadani could offer several advantages, Mustafa Hadi, shipbreaker in Gadani told WealthPK. He said that by attracting investment and fostering industrial activities, the SEZ could contribute to the economic development of Balochistan. A revitalized shipbreaking industry could generate employment opportunities, benefiting the local workforce, he pointed out.Hadi noted that the SEZ could lead to the improvement of infrastructure, including transportation and utilities, which would benefit both the industry and the local community. He said that proposal of SEZ has been forwarded to the federal government for its consideration so that work on it can be progressed.

He said that the shipbreaking industry is one that countries like Pakistan cannot afford to shut down as it contributes to the raw material for a large chunk of our industries as well as to the revenue through taxes. However, proper and aggressive measures can be taken to protect those who work on the yard and to avoid unfortunate incidents in the future. Hadi said that province has limited industrial base, with Hub industrial estate being the largest one, followed by the shipbreaking industry in Gadani as the leading ones.

While the proposal holds promise, several challenges need to be addressed. As the ship-breaking industry seeks incentives and the establishment of an SEZ, environmental experts pointed out that ship-breaking is associated with hazardous substances and environmental risks. Implementing stringent environmental regulations and safety standards is crucial to mitigate these risks.

“Establishing a clear and effective regulatory framework is essential to ensure the smooth operation of the SEZ and compliance with international standards”, said Asad Latif, an environmental expert in Karachi. He said that engaging with the local community to understand their needs and concerns is vital for the successful integration of the SEZ into the region.

He said that the proposal to establish a special economic zone in Gadani presents an opportunity to revitalize the ship-breaking industry and stimulate economic growth in Balochistan. However, careful planning and consideration of environmental, regulatory, and community factors are essential to ensure the success and sustainability of this initiative.

Credit: INP-WealthPk