ISLAMABAD, May 28: The government is mulling a proposal to hand over Karachi Port and Bin Qasim Port to private sector through management contracts, it is learnt.

The proposal is part of a plan aimed at introducing revolutionary changes in sea, rail, road and air transport systems to meet the requirements of growing national economy and turn the country into a regional hub for international trade, sources say.

According to them, the plan also envisages private sector airlines operating on international routes and banking and insurance supporting trade logistics.

To implement the plan, the sources say, the government is seeking over $6 billion foreign investment in the national trade corridor to meet domestic requirements and provide transit facilities to Central Asian Republics, western China, Afghanistan and Iran.

The investment plan will be implemented in about five years and is estimated to save the country $5 to 7.5 billion per annum which is currently being lost due to poor performance of railways, trucking, ports and airports, says Dr Asad Shah, Planning Commission member on infrastructure.

To start with, about Rs40-50 billion would be allocated in next year’s development budget to improve railways, ports and shipping and roads, he told this reporter.

The existing infrastructure could not support 7-8 per cent sustainable growth in national economy and its rising demands, he pointed out.

“Investments estimated at over $6 billion in five to six years will be sequenced strategically and kick-started through high priority projects”, said Dr Shah.

According to him, a comprehensive incentive package will be announced in the federal budget 2006-07 to declare trucking an industry and introduce tax- and duty-free import of large trucks to replace obsolete 2- and 3-axle rigid trucks with multi-axle trucks and latest prime movers.

Soon after the budget announcement, roads shows will be held in major cities across the world to attract investments in these sectors.

The investment plan has been prepared through a year-long consultation with several ministries and corporations and key international lenders, including the World Bank, Asian Development Bank and Japan Bank for International Cooperation.

It covers six core areas of ports and shipping, trade facilitation, highways and trucking modernisation, railway improvement and aviation and air transport modernisation.

The plan aims at improving Pakistan’s share of world trade from 0.2 per cent to one per cent by 2,030 and increasing its exports from $17 billion in 2,006 to around $250 billion by 2,030.

To reduce port costs and improve logistics, the berth draft of Karachi Port and Port Qasim will be deepened to attract larger capacity vessels and vessel charges and terminal handling charges will be drastically reduced.

Freight forwarding will be developed to meet the requirements of World Trade Organisation, South Asia Free Trade Agreement and Economic Cooperation Organisation.

The trade facilitation is expected to save $1.3 billion per annum.

Moreover, the capacity of north-south transportation and allied national highways will be improved through commercial management and introduction of electronic tolling system. The highway modernisation is estimated to save $2 billion annually.

Likewise, the railway system will be restructured through creation of a freight business unit with dedicated locomotives and rolling stock to reduce travel time for Karachi-Lahore container service to 28 hours against existing 56 hours.

For this purpose, 75 transportation locomotives and 150 passenger coaches would be procured next year, Dr Shah said and added that it was estimated to save $1 billion every year.

For aviation and air transport, the regulatory, commercial and operating functions would be divided, he said.