ISLAMABAD, Sept 7: The higher transportation cost has severely constrained economic growth, competitiveness of Pakistan’s exports and improvement of people’s life. Official sources told Dawn on Wednesday that the World Bank, in one of its studies, estimated an annual loss of Rs220 billion or 6 per cent of GDP due to inadequacies of the transportation system.
The bank listed some of the major issues of transport sector which also included inadequate physical capacity, inadequate maintenance system, poorly targeted priorities of investment, operational and financial inefficiencies of the public investment, lack of private sector participation and environmental impact.
The government was told to consider the rational allocation of inland freight traffic between rail and road network, privatisation of railway’s operation in selected sections and inclusion of private sector in development of roads, airlines, ports and shipping.
The inland navigation could help in improvement of the efficiency of the transport sector.
The road density, an import indicator of economic development, is low (0.32 km per sq. km) in Pakistan as compared to neighbouring countries such as India (0.49 km per sq. km and Sri Lanka (0.48 km per sq. km).
Punjab and Sindh have high and Balochistan has density of only 0.12 km per sq km. Road population and road per vehicle point to a different story. Balochistan is the highest and Punjab is the lowest in both indicators.
The current road network is considered to be insufficient to cater to the needs of the growing population. Pakistan needs at least another 100,000 km network of roads to increase the road density to be at par with India and other regional countries. Due to insufficiency of roads, 30-35 per cent of perishable harvest is lost annually.
The assessment of roads done by a joint study of National Highway Authority (NHA) and World Bank indicated that 47 per cent of national highways were in poor condition and only 28 per cent of the network was in good condition.
The major causes of deterioration of the road network include (a) rapidly increasing traffic volumes partly due to shift from rail to road (b) inadequate funds for maintenance, (c) inefficient government institutions, (d) overloading, and (e) lack of private sector involvement.
It was said that the inclusion of the private sector in road development was not very successful in spite of policy framework and package incentives. Private sector could be involved in many ways including toll operation and maintenance contacts.
Due to insufficient funds allocation, proper maintenance of road network is not taking place and causing deterioration of networks. A study by Asian Development Bank estimated that in Punjab the budget allocation of road maintenance was just 19pc of the total requirement of Rs8bn.
About air transportation it was said that currently 43 airports are operative in Pakistan including 10 airports equipped for international traffic and 15 feeder airport.
However, whereas the number of passengers in domestic and international flights has increased by 27 per cent during the last two decades, the share of air transportation is merely 10 per cent of passenger traffic and negligible in freight.
The main issue in the air transportation is said to be the poor quality of the services and airport facilities. The service level is not of international standard which is the main hurdle in developing tourism industry.
The capacity at Karachi and Lahore airports has increased but Islamabad is still low. The car parking facilities and aircraft parking stands need attention of the government.
Similarly, the share of entire Pakistan merchant fleet including Pakistan National Shipping Corporation (PNSC) is barely eight per cent which is much lower than 40 per cent share allowed under Unctad Code of Conduct.
Private sector partnership is not good enough because of poor investment climate, lack of level-playing field with PNSC enjoying the first right of refusal for government cargoes. Also, application and processing of documents is slow in the port and shipping ministry.
The government has been advised to modernise facilities at the Karachi and Qasim ports by containerisation of traffic on Built Operate Transfer (BOT) and Built Operate Own (BOO) arrangements with the help of dry ports and bounded warehouses.