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Outdated trucking fleet unfit for CPEC challenges

Updated July 13, 2017


Lahore: Trucks on Ring Road wait for their turn to enter the Ravi Road Vegetable and Fruit Market. Analysts believe Pakistan should implement trucking reforms to reap benefits of cross-border trade under the China-Pakistan Economic Corridor.─White Star
Lahore: Trucks on Ring Road wait for their turn to enter the Ravi Road Vegetable and Fruit Market. Analysts believe Pakistan should implement trucking reforms to reap benefits of cross-border trade under the China-Pakistan Economic Corridor.─White Star

ISLAMABAD: Stakeholders in the China-Pakistan Economic Corridor (CPEC) on Wednesday sought the implementation of the trucking reform policy approved a decade ago, creation of a ministry for transport and uniform border management, Custom clearance and related standards.

The two-day ‘CPEC-Logistics International Forum’ – organised by the National Logistic Cell – carried an underlying message that the ageing fleet of vehicles used by the trucking industry was least prepared to undertake cross-border transportation envisioned under the mega-project.

Pakistani and Chinese officials and representatives from the industry discussed transport challenges and opportunities at the moot.

An academic and former economic adviser to the Musharraf administration urged the Chinese government to create an organisation on the lines of the Asian Monetary Fund (AMF). This (fund) would help countries like Pakistan in challenging balance of payments situations after CPEC implementation as the International Monetary Fund (IMF) could turn to an adversarial role, he opined.

Director General NLC Major General Mushtaq Ahmed Faisal said the Sino-Pak trade at present was heavily in favour of China.

A meaningful improvement in Islamabad’s potential to reap the desired dividend form Chinese partnership would depend on Islamabad’s capacity to improve bilateral trade, he said.

Participants at the forum urged implementation of a trucking reform policy and ease in Customs procedures

This could be done through reformative steps for expansion of industrial base, development of skilled human resource, trade-friendly culture, he suggested.

He said trade terminals need to be upgraded while customs procedures must be simplified to reduce dwell time and help better management of increased volume of traffic.

The trucking industry needs to upgrade and diversify its fleet to vehicles that are road worthy, compatible with international standards and adhere to axle regime.

Most of the participants were of the view that if Pakistan wanted to reap the benefits of cross-border trade under CPEC, it should implement the trucking reforms policy, provide relief in duties on the import of trucks and train drivers to improve their driving skills as well as learn the Chinese language.

Chairman Mega Movers, Nawabzada Zaheer Barakzai, who secured a Rs5.5 billion investment opportunity in the new trucking fleet for CPEC, said that due to outdated trucking system Pakistan was losing more than two per cent of its GDP, damaging its national highways, wasting agriculture products and increasing its carbon foot print.

He said the current trucking industry cannot undertake cross-border trade unless it is completely reshaped on modern lines.

Chief Executive Officer Transfreight Coy, Babar Badat said Pakistan had lost a good opportunity after the disintegration of USSR to develop its trucking industry on modern lines.

He said there were around 1,200 to 1,500 logistics companies working in Pakistan but the drivers are not trained to undertake cross border trade. He said Pakistan should ratify all the international conventions related to trucking industry and customs as connectivity was not possible without these steps.

Highlighting another issue, he said currently the logistics industry was being dealt by seven different ministries making things more complicated for the logistics companies.

He said the government should establish the transport ministry to facilitate modernisation of the trucking industry.

On the tax potential presentation, Rawalpindi Chamber of Commerce and Industries (RCCI) President Raja Amer Iqbal said CPEC would be a game-changer only if industrialisation happened in Pakistan with joint ventures between Chinese and Pakistani investors and local population getting jobs.

He said China should take Pakistan on board regarding CPEC projects. “We must have an agreement with China in this regard,” he added.

National University of Science and Technology Dean Dr Ashfaque Hasan Khan said people against CPEC are quoting Sri Lanka’s example and advising that infrastructure investments should not be on commercial basis.

In the long run, Pakistan could face balance of payments challenges once it starts repaying loans and may require IMF’s help but that might not come for a bailout for falling in Chinese trap.

He alleged the government of Pakistan was not handling the historic opportunity in a prudent and professional manner.

The level of their seriousness could be gauged from the fact that a Rs2 trillion development budget had been announced recently and no money is allocated for the economic zones in PSDP 2017-18 because “we are talkers not doers”, he said.

He said China should invest and develop a special economic zone at Gwadar only while the remaining SEZs inside the country are developed by the local private sector and government. He said China should not demand extraordinary concessions from Pakistan as it will have a negative impact on Pakistan.

He said Pakistan’s exports to China went up from $600 million in 2006 to $2.6 billion till 2012 but after the Free Trade Agreement the country’s exports nosedived and stood at $1.6bn.

However, imports from China continue to rise and under CPEC the imports of machinery and raw material continue to pour into the country, he noted.

The trade balance is worsening mainly because Islamabad is exporting items which have limited demand, he added.

Published in Dawn, July 13th, 2017