March 18, 2007	Sunday	Safar 28, 1428

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ISLAMABAD, March 17: The World Bank has asked the government to lower the transportation cost, saying that it is severely constraining the economic growth and making the country’s export uncompetitive in the world.

Sources told Dawn on Friday that the government had been advised to remove ‘inadequacies’ of the transport system that was resulting in an annual loss of Rs220 billion or six per cent of the Gross Domestic Product (GDP).

Inadequate physical capacity, inadequate maintenance system, poor targeted priorities of investment, operational and financial inefficiencies of the public investment, lack of private sector participation and environmental impact were identified as serious issues which needed to be sorted out for improving the performance of the transportation system.

An official study, ‘Industrial vision and strategy for Pakistan’s socioeconomic development,’ submitted to the government for approval, called upon the authorities to overhaul and revamp the transport sector, particularly by modernising the maintenance system. It said the current system was inadequate and needed major improvements.

The government was asked encourage the private sector to make sizable investment in the sector.

The report said incentives should be offered to encourage the private sector to participate in road projects.

Incentives should also be offered to the private sector to control road deterioration, check overloading and install weigh bridges and penalty should be imposed on those violating the rules, it said.

Rational allocation of inland freight traffic between rail and road network, privatisation of the railway operation in selected sections and inclusion of the private sector in the development of roads, airlines, ports and shipping and inland navigation could help improve the efficiency of the sector, it said.

The study said the share of railway in public investment had drastically declined mainly due to aging of the assets, long delays in arrival and departure, frequent accidents, lack of locomotives, and insufficient train speed.

The major goal was to revitalise the railway and make it the choice of the commuter and freight haulers through a service-friendly environment, it said.

The public sector investment could be used for strengthening the transport capacity through improvement of facilities, including doubling tracks, electrification, rehabilitation of tracks, revamping of signalling and repair of bridges, it said.

The main issue in air transportation, the study said, was poor quality of the services and airport facilities. The goal was to improve the service standard to passengers by private sector participation in the industry.

Besides, the PIA’s operation efficiency needed to be improved, including cost control, reduction of manpower-aircraft ratio, aircraft renewal and higher rate of aircraft utilisation, it said.

The assessment of roads done by a joint study of the World Bank and the National Highway Authority (NHA) indicated that 37 per cent of the national highways were in poor condition and only 28 per cent were in good condition. The major causes of the deterioration of the road network included rapidly increasing traffic volumes, partly due to shift from rail to road, inadequate funds for maintenance, inefficient government institutions, overloading and lack of private investment.

With the growth of urban population, transportation needs were growing fast in the cities, it said. “The system was inadequate to cater to the needs of the urban dwellers,” the study said.