ISLAMABAD: The government is seeking a $200 million loan from the Asian Development Bank (ADB) for a project to rehabilitate and dualise the 460-kilometre Lahore-Peshawar track, it was learnt on Saturday.

The project will involve installation of modern signalling and communication system between Peshawar and Rawalpindi.

The loan under the Central Asia Regional Economic Cooperation (CAREC) Railway Connectivity Investment Programme will help make the country’s railway transport system more efficient and competitive, the ADB said.

While ADB has ensured provision of $200m in its Country Operation Business Plan (COBP) for 2017-19, the government has yet not allocated funds for the project.

The loan under multi-tranche financing facility (MMF) will also finance the realignment of its 53-km section in hilly tract from Kaluwal and Pindora. At two locations in the hilly region, two tunnels have been proposed for realignment of approaching double tracks.

The project will also involve modernisation of IT-based accounting system of Pakistan Railways. The entire accounting data and information will be transformed and migrated into the new accounting system.

Railways offers unique advantages for transporting freight and passengers over long distances, however in the past three decades increasing competition from road transport has reduced railways market share.

As of 2016, railway accounts for 4 per cent of freight traffic and 6pc of passenger traffic with major shares taken by road.

As a result, the financial performance of Pakistan Railways has not generated enough resources for investing in asset replacement and capacity expansion, an ADB report points out.

Over the recent years, the operational performance of Pakistan Railways has markedly improved and helped avoid a total failure of the sector mainly owing to improved availability of functioning locomotives and railways’ well-thought-out marketing strategies.

Despite recent improvements, the railways sector is still needed to upgrade its infrastructure on a large-scale to provide more competitive transport services, regain the market share lost to roads, and ultimately rebalance the unbearably unbalanced modal share between rail and road.

The Asian Development Bank has already started preparing a 2040 strategic plan for Pakistan Railways, and in this regard a technical committee has already been formed which held its session in Lahore on Friday. A three-member ADB technical team attended the committee meeting.

Published in Dawn December 18th, 2016

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