June 30, 2006	Friday	Jumadi-ul-Sani 3, 1427

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RAWALPINDI, June 29: Inadequate and inefficient transport system in the country is costing an excess of Rs220 billion annually or 8.5 per cent of the GDP, constraining economic growth, reducing export competitiveness and hindering social development.

The performance of the transport system has been poor, with high economic losses from congestion and poor quality roads and a mismatch between supply and demand for transport services and supporting infrastructure, reveals the annual plan document of the Planning Commission.

There are logistics constraints, which impede competitiveness of the country’s trade and industrial development. The conventional system towards documentation clearance, movement facilitation and electronic data interchange is yet to be modernised. The development of an efficient transport sector has also been hindered due to misplaced priorities and the absence of an approved transport policy.

The plan states that an efficient transport system is a pre- requisite for Pakistan to become globally competitive. The growth in capacity must be achieved while increasing service levels and decreasing costs.

Internationally, prices of transport services have fallen due to increased productivity, increased competition between suppliers and pressure from users who face growing global competition in their own markets. There would be need for a higher level of investment in transport with enhanced private sector participation in the provision of transport infrastructure and services, it says.

The vision for the transport sector is the establishment of an efficient and well-integrated transport system that will facilitate the development of a competitive economy and poverty reduction, while ensuring safety in mobility. The strategic thrust is on optimal utilisation of the existing capacity, improved management for maintenance and operation and coordinated use of various modes of transport.

Transport being an important sector of the economy is contributing 10 per cent of the GDP and over 17 per cent of the Gross Capital Formation, and it cover roads, road transport, railways, ports and shipping, and aviation. The sector consumes 35 per cent of the total energy annually and is recipient of 20 to 25 per cent of the annual federal public sector development programme.

The sector generates a large number of employment opportunities currently estimated at 2.3 million jobs. It also helps in integrating markets, strengthening competition, and increasing access to improved farming techniques and social services, besides promoting trade, tourism and foreign investment.

The sector also contributes to the government revenues through taxes and duties on production and import of vehicles and parts, petroleum products, and fees on ownership and operation of vehicles.

In Pakistan, the road network is about 258,000km with on- road vehicles at about 4.2 million. Road-related public revenue collection is about Rs32.5 billion per year (52 per cent from surcharge on POL products). The total public expenditure on roads is over Rs30 billion per year, with 65 per cent on national highways, according to the document.

The total inland traffic by road and rail transport is currently estimated at 239 billion passenger-km of passenger traffic and 153 billion ton-km of freight traffic. Freight and passenger traffic has been growing at 6.24 per cent and 6.65 per cent per annum, respectively.

Road transport accounts for 90 per cent of passenger traffic and 96 per cent of freight traffic.

The transport sector covers roads, road transport, railways, ports and shipping, and aviation.

The total public expenditure on roads is over Rs30 billion per year, with 65 per cent on national highways.

The road sector has been the main recipient of public sector funding, consuming about 69 per cent of the PSDP allocation for transport and communications sector. However, road maintenance expenditures over the years have only been at about 20 to 30 per cent of the requirements.