PAKISTAN TRANSPORT PLAN STUDY IN THE ISLAMIC REPUBLIC OF PAKISTAN

Transcription

1 No. JAPAN INTERNATIONAL COOPERATION AGENCY(JICA) NATIONAL TRANSPORT RESEARCH CENTRE(NTRC) MINISTRY OF COMMUNICATIONS, GOVERNMENT OF PAKISTAN PAKISTAN TRANSPORT PLAN STUDY IN THE ISLAMIC REPUBLIC OF PAKISTAN Final Report March 2006 NIPPON KOEI CO.,LTD. ALMEC CORPORATION SD J R

2 JAPAN INTERNATIONAL COOPERATION AGENCY(JICA) NATIONAL TRANSPORT RESEARCH CENTRE(NTRC) MINISTRY OF COMMUNICATIONS, GOVERNMENT OF PAKISTAN PAKISTAN TRANSPORT PLAN STUDY IN THE ISLAMIC REPUBLIC OF PAKISTAN Final Report March 2006 NIPPON KOEI CO.,LTD. ALMEC CORPORATION

3 PREFACE In response to a request from the Government of Pakistan, the Government of Japan decided to conduct the Pakistan Transport Plan Study in the Islamic Republic of Pakistan, and entrusted the study to the Japan International Cooperation Agency (JICA). JICA selected and dispatched a study team headed by Mr. Minoru Shibuya of Nippon Koei Co., Ltd. and consists of Nippon Koei Co., Ltd. and Almec Corporation from June 2005 to March The team held discussions with the officials concerned of the Government of Pakistan, and conducted field surveys in the study area. Upon returning to Japan, the team conducted further studies and prepared this final report. I hope that this report will contribute to the economic and social activities of Pakistan and to the enhancement of friendly relationship between our two countries. Finally, I wish to express my sincere appreciation to the officials concerned of the Government of Pakistan for their close cooperation and friendship extended to the study. March, 2006 Kazuhisa Matsuoka Vice President Japan International Cooperation Agency

4 March, 2006 Letter of Transmittal We are pleased to submit herewith the Final Report of the Pakistan Transport Plan Study in the Islamic Republic of Pakistan. This study was entrusted to Nippon Koei Co., Ltd. in association with Almec Corporation, under a contract with Japan International Cooperation Agency (JICA), during the period from June 2005 to March The report contains the advices and suggestions of the concerned authorities of the Government of Japan and your agency as well as the comments made by the concerned authorities of the Government of Pakistan. We would like to take this occasion to express our sincere gratitude to JICA and the Ministry of Communications for providing an opportunity to conduct this Study. We are also the most grateful for the cooperation, guidance and assistance of the Steering Committee, the Embassy of Japan in Pakistan and the JICA Pakistan office. We have to appreciate the Advisory Committee Members from Tokyo Institute of Technology and Ministry of Land, Infrastructure and Transportation of the Government of Japan for extending advices and comments towards the Study. We hope that this report will contribute to the economic and social activities of Pakistan. Yours Faithfully, Minoru SHIBUYA Team Leader, JICA Study Team for the Pakistan Transport Plan Study in the Islamic Republic of Pakistan

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6 Abbreviations /Acronyms AASHTO ADA ADB ADS ADSB AGR AH AIDS AIP AIS AJK APCC APL ASEAN ASF ATC ATM ATP BDA BOO BOT BPK BTK C&W C&WD CAA CAREC CAS CATC CBMs CDLs CDWP CEO CNG Cosco CSN CTC DE DE DFI DWT ECNEC ECO EDI EI EIA EIRR EL American Association of State Highway and Transportation Officials Airport Development Authority Asian Development Bank Automatic Dependent System ADS Broadcast Annual Growth Rate Asian Highway Acquired Immuno-Deficiency Syndrome Aeronautical Information Publication Aeronautical Information System Azad Jummu and Kashmir Annual Plan Coordination Committee American President Lines Association of Southeast Asian Nations Airport Security Force Air Traffic Control Air Traffic Management Automatic Train Protection System Balochistan Development Authority Build, Operate and Own Build, Operate and Transfer billion passenger- km billion ton-km Communication and Works Communication and Works Department Civil Aviation Authority Central Asian Republics Economic Cooperation Compulsory Acquisition Surcharge Civil Aviation Training Centre Confidence Building Measures Cash Development Loans Central Development Working Party Chief Executive Officer Compressed Natural Gas China Ocean Shipping Co. Communication Navigation Surveillance Centralized Traffic Control Diesel Electric Diesel Locomotive Direct Foreign Investment Deadweight Tonnage Executive Committee of National Economic Council Economic Cooperation Organization Electronic Data Interchange Economic Indicator Environmental Impact Assessment Economic Internal Rate of Return Electric Locomotive

7 EMP Environmental Management Plan EP Environment Protection EPA Environmental Protection Agency EPAs Environmental Protection Acts EPZ Export Processing Zone ERP Emergency Repair Plan ESAs Equivalent Standard Axles ESCAP Economic and Social Commission for Asia and the Pacific F. Aid Foreign Aid F/S Feasibility Study Fahr. Fahrenheit FATA Federally Administered Tribal Areas FBS Federal Bureau of Statistics FC Frontier Customs FCL Full Container Load FDI Foreign Direct Investment FHA Frontier Highway Authority FOTCO Fauji Oil Terminal and Distribution Company Ltd. FWO Frontier Works Organization FY Fiscal Year GDP Gross Domestic Product GMS Greater Mekong Subregion GNP Gross National Product GOP Government of Pakistan GT road Grand Trunk Road HDM Highway Development and Management System HIES Household Integrated Survey HIV Human Immunodeficiency Virus HMM Hyundai Merchant Marine HP Horsepower HSD High Speed Diesel IAS International Accounting Standards IBRD International Bank for Reconstruction and Development ICAO International Civil Aviation Organization IEE Initial Environmental Examination ILS Instrument Landing System IOCB Iron Ore and Coal Berth IPO Initial Public Offering IRI International Roughness Index IRR Internal Rate of Return IT Information Technology ITPS Institute for Transport Policy Studies JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency KICT Karachi International Container Terminal KKH Karakoram Highway KPT Karachi Port Trust LCL Less than Container Load LGRD Local Governmental and Rural Development Department LOA Length Overall

8 LoC Loco LPG MOC MOD MOE MOF MOIT MOPS MOR MPK MTDF MTK MW NATCO NDB NEC NGO NH NHA NHB NHC NHIP NHMP NLC NM NOTAM NP NPV NSCSA NTPS NTRC NWFP O&M OAP OD OECF OOCL OP OPEC P&D PEPA PFI PIA PIAC PICT PNSC POL PONL PPP Line of Control Locomotive Liquefied Petroleum Gas Ministry of Communications Ministry of Defence Ministry of Environment Ministry of Finance Ministry of Information and Technology Ministry of Ports and Shipping Ministry of Railways Million Passenger Kilometre Medium Term Development Framework Million Ton Kilometre Motorway Northern Area Transport Corporation Non-Directional Beacon National Economic Council Non-Governmental Organization National Highway National Highway Authority National Highway Board National Highway Council National Highway Improvement Programme Council National Highway and Motor Police National Logistic Cell National Monument Noticed Air Man National Park Net Present Value The National Shipping Company of Saudi Arabia National Transport Planning Study National Transport Research Centre North West Frontier Province Operation and Maintenance Open Access Policy Origin and Destination Overseas Economic Cooperation Fund Orient Overseas Container Line Oil Pier Organization of Petroleum Exporting Countries Planning and Development Pakistan Environmental Protection Act Private Financing Initiatives Pakistan International Airlines Pakistan International Airlines Corporation Pakistan International Container Terminal Pakistan National Shipping Corporation Surcharges on Petroleum, Oil and Lubricants P&O Nedlloyd Public Private Partnership

9 PQA PR PRC PSC PSDP PTPS QICT R&D R/W RAMD RAMS RC RDA RGDP RMA RMU ROW Rs. SEA ST TA TEU TOR TSDI TSK TTC UK UN USA USD VDL VHF VOC VOR WB WCH WHO WSD WTO Port Qasim Authority Pakistan Railways Pakistan Railways Corporation Pakistan State Oil Public Sector Development Program Pakistan Transport Plan Study in the Islamic Republic of Pakistan Qasim International Container Terminal Research & Development Runway Road Asset Management Directorate Road Asset Management System Reinforced Concrete Road Development Account Regional Gross Domestic Products Road Maintenance Accounts Road Management Unit Right of Way Rupees Strategic Environmental Assessment Strategic Road Technical Assistance Twenty Feet Equivalent Unit Terms of Reference Transportation Sector Development Initiative Tokyo Senpaku Kaisha Travel Time Cost United Kingdom United Nations United States of America US Dollars VHF Data Link Very High Frequency Vehicle Operating Cost VHF Omnidirectional Range World Bank World Cultural Heritage World Health Organization Works and Services Department World Trade Organization

10 Executive Summary of PTPS Recommendations 1. Introduction The Medium Term Development Framework (MTDF) published in May, 2005 declares an ambitious goal for Pakistan to be a developed, industrial, just and prosperous country within 25 years, by attaining 7-8 per cent annual economic growth. Followed the economic growth scenario, the future transport demand was estimated to grow to three times the present demand as shown in the table below. Table-1 Growth of Transport Demand (Inter-zonal Transport) Passenger Freight Year No. of Passengers Passenger-km Tons Ton-km Million/year Billion-km/year Million/year Billion-km/year , , Source: JICA Study Team In order to achieve the goal, Pakistan has to develop infrastructure in transport sector. A demand and supply analysis in PTPS indicates that the present road network will not be able to deal with the future transport demand that will be generated if Pakistan achieves the target economic growth, even if all ongoing and committed projects are completed. Figure-1 depicts the results of the traffic assignment on present and Do-Minimum network for 2005 and Do-Minimum means a scenario in case that only ongoing and committed road projects are carried out. Present Network, 2005 Do-Minimum Network, 2025 Volume Capacity Ratio Volume Capacity Ratio Source: JICA Study Team Figure-1 The Results of Traffic Assignment for 2005 and

11 2. Goal, Policy and Strategy Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Based on the understanding of policies and strategies of the current MTDF, the Study Team set up a planning goal as: Accomplishment of safe, stable and sustainable transport system and network with proper level of services, enough to support people s economic and social activities. To approach the goal, three policies and seven strategies have been selected as shown in the figure below. Long-term policies of PTPS A. Transport system to support economic and social activities Planning Goal of PTPS B. Transport network to support balanced growth of regional economy Policy and Strategies of MTDF C. Transport system to realize optimal modal share Strategies of PTPS 1. Financially Realizable Master Plan 2. Transparent Prioritization 3. Pursuit of Road Safety 5. Cross-border Facilities Development 6. Institutional Capacity Enhancement 7. Environmental Conservation 4. Inter-modal Facilities Development Source: JICA Study Team Figure-2 Long-Term Policies and Strategies of PTPS Policy A: Development of transport system to support economic and social activities Supporting economic activities by connecting major economic centres with motorways or national highways Demand oriented project formation to avoid traffic congestion Establishment of stability by providing alternative mode or route Increase of urban bypasses Development or improvement of inter-modal facilities Strengthening of international routes Management and effective utilization of existing resources Policy B. Development of transport network to support balanced growth of regional economy Harmonization of transport network development with regional development policies and plans Network development aiming at alleviation of poverty and regional disparity High priority setting on transport projects in poorer areas Project implementation by utilization of local materials and procurement of local labor force Effective monitor of how poverty alleviation measures and projects affect Policy C. Transport system to realize optimal modal share Minimization of transport cost by multi-modal transportation Fare competition between road and rail - 2 -

12 Modernization of railway system through rehabilitation with improvement to railway infrastructure and facilities, renewal of rolling stock and institutional reform of management and operation Development and improvement of inter-modal facilities Introduction of research works suitable for local conditions 3. Action Plan for non-investment Projects The action plan for legislative, institutional and enforcement improvement recommended in the Master Plan is summarized as listed in Table-2. These actions are essential for developing a rational plan and effective use of infrastructure. Table-2 Recommended non-investment Projects Policy Strategy Sector Code Project Support economic & Social Activities Support regional Balanced growth Realize optimal modal share Financially realizable Master Plan Transparent prioritization Pursuit safety Inter-modal facilities Cross-border Facilities Institutional capacity enhancement Environmental consideration General General General General Road Road Road Road Road Road Rail Rail Rail Rail Rail Port NG-01 NG-02 NG-03 NG-04 NR-01 NR-02 NR-03 NR-04 NR-05 NR-06 NL-01 NL-02 NL-03 NL-04 NL-05 NP-01 Establishment of Transport Coordination Mechanism - Transport Policy Council - Transport Coordination Committee - Institute of Transport Policy Studies Adoption of Quake resistant Design Standard Review and Amendment of Cross Border Trade Agreement Capacity Building of Environmental Protection Agency (EPA) Establishment of Highway Research and Training Center Implementation and Enforcement of Traffic Safety Improvement Measures Implementation and Enforcement of Anti-overloading Measures Database Building on Traffic Accident Road Development Account and Capitalization of NHA Debt Introduction of Road Tax Reform & Restructuring of PR Privatization of PR in long-term Computer-aided ticketing system Study on Conversion to Bus Transport of Less-demanded Railway Lines Review and Revise of Rail Transport Fare Computerization of Port Cargo Statistical System - 3 -

13 4. Projects and Implementation Plan The Master Plan Projects Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) The implementation plan of the Master Plan was prepared by each transport sub-sector in the period of: Short-Term: FY2005/ /10 Medium-Term: FY2010/ /15 Long-Term: FY2015/ /25 The projects composing the Master Plan for the road and rail sub-sector are listed in Table-3 and Table-4, respectively. As for the port and airport sub-sectors, PTPS focused on demand forecast and review of existing plan and project. The identified projects were evaluated and prioritized primarily based on the Economic Internal Rate of Return (EIRR). Secondly, projects were examined from such viewpoints as regional balanced growth, profitability, network integration, international linkage, social equity/poverty and environmental issues. Finally, based on the comprehensive evaluation results, projects were classified into short-, medium- and long-term, also considering possible budget envelope. PTPS Priority Projects The PTPS Priority projects have been selected for the next stage of MTDF (or in parallel with MTDF) in view of urgency from viewpoints of contribution to national economy, alleviation of traffic congestion, and safety improvement: Capacity Expansion of Karachi Lahore Railway Corridor; The Second Khohat Tunnel; M-13 (Lahore Sialkot Motorway) Construction; M-16 (Hyderabad Nawabshah Khaipur Desert Road) Construction; Murree Muzaffarabad Road Improvement; Bridge Construction in Punjab; Karachi Southern Bypass ; Qasim Port Access; Lahore Strategic Peripheral Route Development; Lahore Multi-modal Terminal Construction; Bypass Construction It is recommended to carry out feasibility studies and plan the implementation program for these projects as soon as possible

14 Table-3 Master Plan Projects for Road Sector Rs. Million PTPS Project Accumulated MTDF (2005/ /10) Medium Long Code Project Name Cost Expenditure PSDP Short-term 2010/ /16- Rs. M, June / /07-09/ / /25 Ongoing Project 10 Marakan Coastal Road 15,010 10,153 4,366 1,500 2, M-1 26,862 23,882 2,980 2, M-3 6,877 6, Karachi Northan Bypass 2,928 2, Lyari Express Way 5,081 2,420 2, , N75, Islamabad-Muzaffarabad Road 7,660 3,324 4, , N55, Indus Highway Project (Phase III) , , N15, Mansehra Naran Jalkhad Road 3,821 3, N5, Rahim Yar Khan-Bahawarpur 7,283 5,322 1, , N5, Okara-Lahore (Okara bypass) 4,462 4, N5, Kharian-Rawalpindi 5,554 5, N5, Chablat Nowshera (incl. flyover) 3,700 3, Lowari Tunnel & Access Road 7,983 1,239 6,745 1,150 5, Bridge on River Jhelum at Azad Pattan AJK N65, Dera Allah Yar-Nutal Section N65, Nutal-Sibi-Dhadar Section 1, Improvement of KKH (N-35) NWFP N50, D.I. Khan-Mughalkot Road 1,903 1, N70, Qila Saifullah-Loralai-Bewala 2,841 1,304 1, , M-8, Gwadar-Hoshab-Khuzdar Road 16,640 2,144 8,450 1,450 7,000 6, M-8, Khori-Quba Saeed Khan 4, , , N65, Realignment of N65 near Jaccobabad Bridge over River Chenab at Sharshah 1, M2, Khanqah Dogran Interchange Lalamusa-Thotha Rai Bahadur N45, Noshera-Chakdara 1, , , F/S N5 Highway Rehabilitation Project, WB 19,943 1,116 15,616 3,116 12,500 3, N25, Kalat-Quetta-Chaman (ADB) 6, ,671 2,300 4, Peshawar-Torkham Dual Carriageway 12, ,669 1,169 9,500 2, Malana Junction- Sarai Gambia Dualization Badabher-Dara Adam Khel, Rehab of existing road Sarai Gambila-Bannu-Miran Shah-Ghulam Khan Kohat Tunnel Access Road 6,627 6, N25, Karao-Wad Section 2, , , Ongoing Projects Sub-total 178,261 89,316 83,794 19,084 64,710 12,594 0 Committed Projects 480 Rehabilitation of 518km of N5 14, , ,500 8, Motorway Link (Gujranwala-Pindi Bhattian) 6, , N25, Hab-Utral 3, , , N70, Multan-Muzaffaragarh 1, N50, Khanozai-Mughalkot Section 12, , ,783 5,576 2, N35, Dualization of Hassanabdal-Mansera 3, , ,023 2, N65, Sukker - Jacobab Bypass 2, , Tarnol-Fatejang-Kohat Road 3, , ,171 2, N70 (Qila Saifullah-Wiagum Rud) 4, , ,410 3, Malakand Tunnel/Bypass 6, , N70, Mughalkot-Zhob Road 2, Committed Projects Sub-total 59, , ,500 38,053 2,939 MTDF New Projects 310 Quetta Western Bypass Larkana Bridge 2, , , Five bridges on Gilgit-Shardu Road (S-1) N40, Noshki-Dalbandin 1, , , N15, Jalkhad-Chillas 1, , , KKH-Skardu Road 4, , ,300 2, N5, Ghaggar Phatak Bridge to Kotri 2, , , N80, Jand-Kohat Road 1, , , Hassan Abdal Bypass Dhakpattan Bridge N55 Dadu Ratodero Fence+Ser. Rd. 3, , Other Projects 1, , , Interchange at Kot Sarwar for Hafizabad Roads in Rawalpindi 1, , Hoshab-Srab 12, , ,500 1, M-7 18, , ,000 3, Bridge (Kotri-Sajjawal bridge), jerruk 2, , Bridge (Kotri-Dadu Moro bridge),san-sakar 2, , Bridge (Kahndhkot-Ghotki) 2, , Rail cum Road Bridge, Chachran-Mithankot 2, , Bridge (Taunsa-Leiah) 2, , Bridge over River Indus at Kalur Kot 2, , Bridge over River Indus (Mianwali-Isa Khel) 2, ,500 Source: JICA Study Team - 5 -

15 cont. of Table-3 Rs. Million PTPS Project Accumulated MTDF (2005/ /10) Medium Long Code Project Name Cost Expenditure PSDP Short-term 2010/ /16- Rs. M, June / /07-09/ / / ITS Corridor 6, , ,200 3, M5, Khanewal-Rajanpur 42, , ,000 22,000 18, N5, Service Road along with Fence, WB 4, , N45 6, , Kohala-Muzafarabad Road 3, , Murree-Kohala Road 3, , N40, Lakpass-Noshki 3, , Hyderabad-Mirpurkhas-Khokhropar Road 8, , Chakdara - Kalam Road 6, , Khawaza Khala-Besham Road 3, , N65, Sibi-Quetta 6, , ,200 3, N70, D.G.Khan-Sakhi Sarawar-Bewala 6, , ,800 3, nd Bridge on Indus at Gazi Ghat (N70) Khushalgar Birdge(N80) 3, , ,000 1, N55, Indus Highway Project (Phase III-a) 6, , ,000 2, KKH 18, , ,000 10,000 5, M-4, Faisalabad-Multan 22, , ,832 13, Periodic Overlay on M2 & Realignment of Salt Range 8, , ,400 5, M-6, Ratodero-Rajanpur 21, , ,000 13, M-9, Karachi-Hyderabad 6, , , Peshawar Northan Bypass 3, , , Rawalpindi Bypass 3, , , N25, Lakpass Tunnel N-5, Shahdara Flyover 4, , , MTDF New Projects Sub-total 266, , , ,713 35,000 PTPS New Projects 330 Bridge over Chenab at Riwaz Second Kohat Tunnel 6, , Panjub East-West Corridor-1 55, , ,203 17,071 35, Mianwali-Lakki Road 5, , Panjab East-West Corridor-2 60, , ,425 15,761 42, Panjab East-West Corridor-3 69, , ,083 20,826 46, Panjub North-South Corridor-1 70, ,518 59, Bahawalpur, Bahawal Nagar, Sulemanki Road 34, , ,736 12,153 20, Panjub North-South Corridor-2 11, , ,685 3,931 5, Sialkot, Wazirabad, Pindi Bhattian Road 24, , Sialkot, Gujranwala, Sheikhpura Road 14, , Faisalabad, Samundari, Kacha Khu Road 22, ,705 17, Lahore, Jaranwala, Faisalabad, Jhang Road 31, ,885 15, M11 29, , M12 8, , M13 12, ,060 2, M14 11, , M15&M19 51, M16 29, ,334 22, M17 20, M18 20, N55 (Dadu-Kotri) 4-Lane 10, , Garh Maharaja Bridge 1, , Chistian-Burewala Bridge Mohammadwala Bridge Jhelum, Gatalian Mirpur Bridge 1, , Samundari-Shahiwal Road 2, , Jaranwala-Okara Road 2, , Lahore Bridge Victoria Bridge 1, , Pind D. Khan-Jhelum Road 4, , Hyderabad-Bidin-Thata Road 11, , Mianwali-Shakardarra-Lachi Road 6, , N65 Dualization 23, , Lower Topa Mansehra Road 11, , ,323 9, Qasim Port Access 3, , , Karachi Port Access 15, , Bridge on River Indus (Khanote-Hala old) 2, , Bridge on River Indus (Daultpur-Shehwan) 2, , N55 Dualization (Kohat-D.I.Khan) 14, , N55 Dualization (D.I.Khan-D.G.Khan) 9, , N55 Dualization (Rajanpur-Ratodero) 11, ,815 5, Sindh Coastal Highway 20, , ,031 16,247 2, Urban Bypass 45, , ,188 10,929 31, Lahore Peripheral Road 24, , ,430 21,869 0 PTPS New Projects Sub-total 818, , , , ,816 Grand Total 1,322,731 89, ,745 20, , , ,755 Source: JICA Study Team - 6 -

16 Table-4 Master Plan Projects for Railway Sector Rs. Million PTPS Project Accumulated MTDF (2005/ /10) Medium Long Code Project Name Cost Expenditure PSDP Short-term 2010/ /16- Rs. M, June / /07-09/ / /25 Ongoing Project 1 Procurement/manufacture of 175 passenger 7,776 5,953 1,823 1, coaches 2 Procurement of 69 DE locos 11,151 4,188 6,963 2,234 4, Track rehabilitation and modernization of sleeper 11,192 5,686 5,506 2,000 3, factory 4 Recommissioning of 55 DE locos Replacement of breakdown cranes and procurement of relief train 6 1,300 high capacity wagons 5,870 1,727 4,143 1,500 2, Doubling of track Lodhran-Multan-Khanewal 3, , , Rehabilitation of 450 passenger coaches 2,145 1, Other projects Ongoing Projects Sub-total 42,865 19,927 22,938 9,049 13, MTDF New Projects 0 10 Conversion of Mirpur Khas - Khokhropar section to broad gauge 11 Dualization of track from Khanewal to Raiwind 5, , , Dualization of track from Shahdara Bagh to Lala 3, , ,288 2,312 0 Musa 13 Upgrading and improvement of track from Khampur 3, , , to Lala Musa 14 Doubling of track from Lahore to Faisalabad 3, , , section 15 Procurement/manufacture and assembling of 75 12, , , diesel locomotives 16 Procurement/manufacture and assembly of 1,000 4, , ,600 1,200 0 freight wagons 17 Procurement/manufacture and assembly of 150 5, , , passenger coaches 18 Railway yard and railway linkage from Gwadar Port 2, , , to container yard 19 Rail link to Gwadar Port 12, , ,500 5, Up-gradation Rohri - Quetta - Taftan 15, ,450 10, Feasibility study for rail link from Kundian to Peshawar 22 Feasibility study for rail link from Bostan to Peshawar 23 Provision of road over bridge at Chowrangi Chowk EPZ (50%) MTDF New Projects Sub-total 70, , ,587 14,362 10,550 PTPS New Projects 0 24 Improvement of signalling system Karachi - Lahore 15, , , Improvement of signalling system Lahore - 2, ,000 0 Rawalpindi 26 Improvement of signalling system Rawalpindi - 1, ,300 0 Peshawar 27 Improvement of signalling system Faisalabad - 1, , , Lahore 28 Improvement of signalling system Khanewal - 2, ,100 0 Wazirabad 29 Improvement of signalling system Rohri - Quetta 2, , Improvement/rehabilitation of telecommunication 5, , , system (1st phase) 31 Improvement/rehabilitation of telecommunication 3, ,000 0 system (2nd phase) 32 Improvement of signalling system Multan - Attock 2, ,500 0 City 33 Improvement of signalling system Kotri - Habib Kot 1, , Improvement of signalling system Jacobabad - Kot 2, ,100 0 Adu 35 Improvement of signalling system other lines 9, ,000 continued 36 Improvement/rehabilitation of telecommunication 2, ,000 system (3rd phase) 37 Urgent rehabilitation of signalling and 1, , , telecommunication systems 38 Doubling of track Lala Musa - Rawalpindi 7, , Doubling of track Lodhran - Khanewal (Via Chord) 2, ,100 0 Source: JICA Study Team - 7 -

17 cont. of Table-4 Rs. Million PTPS Project Accumulated MTDF (2005/ /10) Medium Long Code Project Name Cost Expenditure PSDP Short-term 2010/ /16- Rs. M, June / /07-09/ / /25 PR40 Rehabilitation of track Rawalpindi - Peshawar PR41 Rehabilitation of track Multan - Attock City 2, ,000 0 PR42 Rehabilitation of track Kotri - Habib Kot 1, ,400 0 PR43 Rehabilitation of track Jacobabad - Kot Adu 1, ,700 0 PR44 Rehabilitation of track other lines continued 6, ,000 PR45 Planning investigation and rehabilitation of structures PR46 Rehabilitation/replacement of structures Karachi - 5, , ,000 3,000 0 Lahore (1st phase) PR47 Rehabilitation/replacement of structures Karachi - 5, ,000 Lahore (2nd phase) PR48 Urgent rehabilitation of structures of other lines 2, , , PR49 Rehabilitation/replacement of structures of other 10, ,000 lines PR50 Improvement of passenger station and ticketing 3, , ,000 1,000 0 system PR51 Improvement of freight stations in Karachi for 3, , , container/bulk transport PR52 Expansion/improvement of container stations in upcountry 5, , , area PR53 Expansion of freight stations in Karachi for 5, ,000 container/bulk transport PR54 Expansion/improvement of container stations in upcountry 7, ,000 area (2) PR55 Procurement/manufacture/assembling of , , ,000 19,000 0 diesel locomotives (3000HP) PR56 Procurement/manufacture/assembling of , , ,000 24,000 0 diesel locomotives (2000HP) PR57 Procurement/manufacture/assembly of 150 electric 30, ,000 locomotives (Passenger) PR58 Procurement/manufacture/assembly of 180 electric 50, ,000 locomotives (Freight) PR59 Procurement/manufacture/assembly of , ,000 0 passenger coaches PR60 Heavy rehabilitation/modification of 530 passenger 11, , ,000 6,000 0 coaches PR61 Procurement/manufacture/assembly of 1,230 56, ,000 passenger coaches PR62 Procurement/manufacture/assembly of 1,050 5, ,800 0 freight wagons PR63 Procurement/manufacture/assembly of 7,600 25, ,000 freight wagons PR64 Expansion and modernisation of locomotives/rolling 15, ,000 stock repair shops PR65 Expansion and modernisation of locomotives/rolling 15, ,000 stock depot PR66 Feasibility study of electrification Karachi - Lahore PR67 Construction/rehabilitation of electrification Karachi - Lahore PR68 Increase of transport capacity Karachi - Lahore in addition to electrification PR69 New link Bostan - Zhob - D.I.Khan - Kohat - Peshawar 27, ,000 20,000 3, ,200 2,600 20, ,000 13,000 PTPS New Projects Sub-total 451, , , , ,600 Grand Total 564,514 20, ,475 9, , , ,150 Source: JICA Study Team - 8 -

18 Barenis Chitral Drosh Kalam Dasu Chilas Dir Madyan Kagan saidu Dadar Manasehra Peshawar Havelian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Talagang Kalabagh Jhelum Lakki Mianwali Sialkot Wana Khushab Tank Shakarga Kulachi Pidi Bhatt Qamr ud Dim Kerez Shahdara Lahore Zhob Kasur C haman Samundari Musa Khe l Bazar Qila Saifu lah Okara Pishin Ziarat Loralai Kot Addu Khanewal Quetta Pakpattan Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi F ort Abbas Dalbadin Dera Bugti C hac hran Kharan Surab Khanpur Jacobabad Qila Ladgashi Besima Shuikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Jamao head Turbat Hoshab Sanghar Uthal Tandu Adam Pasni JiwaniGwadar Ormara Hyderabad Pithoro Khokhropar Umarkot Karachi Thatta Mirpur Sakro Badin Mithi Diplo Jati Nagar Parkar Kati Bandar M-8 M-19 M-19 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-7 M-9 M-10 M-9 M-16 M-16 M-6 M-6 M-6 M-6 M-5 M-5 M-5 M-5 M-5 M-5 M-5 M-5-5 M-17 M-17 M-17 M-17 M-11 M-18 M-18M M-18 M-18 M-18 M-18 M-18 M-1 M-4 M-4 M-4 M-4 M-3 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-14 M-12 Figure-3 Proposed Motorway Network M-13 Kuh i Taftan Mand Jiwani Gwadar Nok Kundi Qila Ladgashi Turbat Pnajgur Parom Pas ni Hoshab Dalbadin Washuk Nag Ormara Awaran Kharan Besima Nushki Surab Chaman Pis hin Quetta PanjpaiSpezard Kalat Khuzdar Wad Chitral Drosh Manasehra Mardan Abbottabad Peshawar Parachinar Attock Cit Islamabad Kohat Jand Thal Lachi Gujar Khan Ka r a k Miran Shah Kalabagh Chakwar Jhelum Lakki Mianwali Gujrat Sialk ot Phalia Wana Jauharabad Tank Gujranwala Sargodha Pidi Bhatt Kulachi Der a Is mail Khan Chiniot Qamr ud Dim Kerez Bhakkar Lahore Faisalabad Zhob Jhang Kas ur Samundari Musa Khel Bazar Okara Qila Saifullah Shorkot Kot Addu Ziarat Loralai Khanewal Pak pattan Duki Multan Marnai Vihari Bahawalnagar Kohlu Mailsi Maw and Sibi Talh Kahan Bahawalpur Ahmadpur East Fort Abbas Dera Bugti Liaquatpur Khanpur Dera Murad Jamali Raimyar Khan Jacobabad Shuikarpur Sukkar larkana Khairpur Sarah Naushehro Firoz Dadu Bela Nawabshah Sanghar Uthal Tandu Adam Khokhropar Sonmiami Pithoro Hyderabad Umarkot Karachi Thatta Mithi Badin Mirpur Sakro Diplo Nagar Parkar Jati Kati Bandar Figure-4 Highway Improvement and Widening Dir Barenis Kalam Madyan saidu Dasu Kagan Dadar Chilas Shaka Barenis Chitral Drosh Kalam Dasu Chilas Dir Madyan Kagan saidu Dadar Manase hra Mardan Peshawar Havelian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Kalabagh Chakwar Jhelum Lakki Mianwali Gujrat Phalia Sialkot Wana Tank J auharabad Shakar Gujranwala Kulachi Sargodha Dera Ismail Khan Qamr ud Dim Kerez C hiniot Bhakkar Lahore Zhob F aisalabad Jhang Kasur Chaman Samundari Musa Khel Bazar Qila Saifu lah Okara Pishin Shorkot Ziarat Loralai Kot Addu Khanewal Quetta Pakpattan Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi F ort Abbas Dalbadin Kalat Dera Bugti Ahmadpur East Liaquatpur Kharan Surab Dera Murad J amali Khanpur Raimyar Khan Jacobabad Qila Ladgashi Besima Shuikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Turbat Hoshab Nawabshah Sanghar Uthal Tandu Adam Pasni JiwaniGwadar Ormara Hyde rabad Pithoro Khokhropar Sonmiami Umarkot Karac hi Thatta Mithi Badin Diplo Jati Nagar P arkar Kati Bandar Kuh-i-Taftan Gwadar Source: JICA Study Team Figure-5 Proposed Bridges : First Stage ( ) : Second Stage ( ) : Third Stage ( ) : Container Terminal Karachi Figure-7 Chaman Quetta Kolpur Kotri Sibi Hyderabad Peshawar Railway Plan Attok City Shorkot Cant Kot Addu Multan Khanewal D.G.Khan Bahawalnagar Lodhran Jacobabad Rohri Badin Khanpur Khokhropar Samasata Faisalabad Rawalpindi Lala Musa Lahore Barenis Chitral Drosh Kalam Dasu Chilas Dir Madyan Kagan saidu Dadar Manasehra Mardan Peshawar Have lian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Kalabagh Chakwar Jhelum Lakki Mianwali Gujrat Phalia Sialkot Wana Tank J auharabad Shaka Gujranwala Kulachi Sargodha Dera Ismail Khan Qamr uddim Kerez Chiniot Bhakkar Lahore Zhob Faisalabad Jhang Kasur Chaman Samundari Musa Khel Bazar Qila Saifu lah Shorkot Okara Pishin Ziarat Loralai Kot Addu Khanewal Pakpattan Quetta Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi Dalbadin Kalat Dera Bugti Ahmadpur East Fort Abbas L iaquatpur Kharan Surab Dera Murad J amali Khanpur Raimyar Khan J acobabad Qila Ladgashi Besima S huikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Turbat Hoshab Nawabshah Proposed by PTPS Sanghar Uthal Existing as of Dec Tandu Adam Pasni JiwaniGwadar Ormara Hyderabad Pithoro Khokhropar Sonmiami Umarkot Karachi Thatta Mithi Badin Diplo Jati Nagar Parkar Kati Bandar Figure-6 Proposed Bypasses Currently, 10 motorways (M1-M10) of 2,667 km are operated or planned already. In addition to these, nine motorways of 2,140 km were proposed by PTPS. As the highway network configuration has almost completed, main stream of road investment is widening and improvement rather than new construction. In connection with the highway development, 17 new bridges were proposed over the Indus river and its tributaries in addition to the existing 48 bridges. Urban bypasses are also proposed for 37 cities, additionally to the 65 existing bypasses. The railway networks were classified into three categories according to their importance and the period of improvement stages, together with the development of container terminals

19 5. Cost and Budget Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Based on the implementation schedule, the required investment over the next 20 years was calculated at Rs trillion in total, of which the road sector accounted for 1.13 trillion (54.7%) and the railway sector Rs. 537 billion (26.1%) / / / / / /25 Road Railway Port Airport Note: Purchase and lease of new aircrafts are excluded from projects in Airport Sector after 2010/11. Source: JICA Study Team Figure 8 Required Investment in Transport Sector over the next 20 years In addition to the project costs in the Master Plan, the private sector is expected to play an important role to make investments in transport services in Pakistan. For example, the total procurement cost for new motor vehicles over the next 20 years was estimated at approximately Rs. 5.5 billion. Including the private sector investments, about 2% of GDP should be allocated for the transport sector. In this case, the total investments will amount to Rs. 5.1 trillion over the next 20 years as shown in the table below. Table-3 Investment Allocation for Transport Sector Rs. Billion Road Railway Port & Airport Total Shipping , , , ,882.7 Total 3, ,105.7 Source: JICA Study Team

20 6. Recommendation (1) Private Sector Involvement The private sector involvement in transport development in Pakistan is an important mechanism for the Master Plan to implement the projects. Particularly, private financing is essential to the development of the Motorway Network. Private sector investments in airport and port development should be farther promoted. The railway system should be improved to the extent that private forwarders willingly choose the railway. Privatization of PR is a long-term target. It is necessary to evaluate any candidate project for BOT/PPP carefully, because the failure in private sector investment will significantly increase the burden of the public sector. Capacity building and transparent prioritization are important for the success of the private sector participants. (2) Establishment of Transport Coordination Mechanism Efficient transport sector development involves intra-sectoral coordination; however, the current system for project prioritization does not necessarily work adequately. In order to remedy the current status of transport system and create a sustainable planning and implementation of sector development programs a three-tiered coordination mechanisms consisting of (i) high level transport policy council, (ii) a working level transport coordination committee, and (iii) institute for transport policy studies should be established. (3) Improvement of Data Collection and Management for Transport Planning Reliable traffic data are the basis for formulating objectives of transport development and action plans. Particularly, road accident data should be systematically collected, managed and analyzed in order to set priorities for road traffic safety. Without reliable traffic accident data, it is difficult to establish policies to reduce traffic accidents. PTPS carried out a nation-wide O/D survey in 2005, and compiled O/D matrices and relevant traffic data that are useful for transport planning. The National Transport Research Centre should maintain and make full use of the database

21 PAKISTAN TRANSPORT PLAN STUDY IN THE ISLAMIC REPUBLIC OF PAKISTAN Final Report - Table of Contents Preface Letter of Transmitted Location Map Abbreviations/Acronyms Executive Summary Chapter 1. INTRODUCTION Outline of the Study Background of the Study Objectives of the Study Study Area Flow and Contents of the Study Output of the Study Reporting Seminars Organization and Participants of the Study Organization of the Study Member of Counterpart Study Team JICA Advisory Committee Steering Committee Components and Structure of this Report Chapter 2. PRESENT TRANSPORT SITUATION AND ISSUES Overview of Transport Sector Road Road Network Road Transport Administration of Road Sector Financial Situation Issues and Problems Railway Infrastructure Rolling Stock

22 2.3.3 Achievements of the Previous Master Plan, JICA Study Railway Transport Administration of Railway Sector Financial Situation Issues and Problems Port Ports Port Transport Administration of Port and Shipping Sector Financial Situation Issues and Problems Airport Airports and Air Traffic Control Air Transport Administration of Aviation Sector Financial Situation Issue and Problems Chapter 3. SOCIO-ECONOMIC FRAMEWORK Regional Structure and Transport Population and Labour Force Population Labour Force and Employment Economic Growth Past and Recent GDP Growth Projection of Economic Growth Freight Transport Demand Analysis of Major Commodities Suggested Growth of Freight Transport Demand up to Future Motorization Increase of Vehicles Investment in Truck Fleet and Bus Fleet Chapter 4. TRANSPORT DEMAND PROJECTION Demand Forecast Methodology Process of Demand Forecast Traffic Survey Zoning System Making the Present O/D Matrices

23 4.1.5 Comparison of O/D data Projection of Transport Volume Indicators Overall Land Transport Demand Inter-zonal Transport Volume Future O/D Table Trip Generation and Attraction Trip Distribution Modal Share between Road and Rail Summary of Demand Forecast for Land Transport Traffic Forecast in MTDF Traffic Assignment Model Chapter 5. OVERALL TRANSPORT POLICY Review of Existing Development Plan Overall Policy and Strategy of MTDF Policy and Strategy of Transport Sub-Sectors of MTDF Planning Goal Long-Term Policies of PTPS Policy A. Development of transport system to support economic and social activities Policy B. Development of transport network to support balanced growth of regional economy Policy C. Transport system to realize optimal modal share Development Strategy of PTPS Development of Financially Realizable Master Plan Transparent Prioritization Pursuit of Road Safety Inter-modal Facilities Development Cross-border Facilities Development Institutional Capacity Enhancement Environmental Consideration Chapter 6. DEVELOPMENT STRATEGY Development of Financially Realizable Master Plan Analysis of Financial Situation of Pakistan Possible Investment Budget for the Master Plan Financial Reform of Road and Rail Sectors Private Sector Involvement in Transport Sector Transparent Prioritization Administrative Framework

24 6.2.2 Decision-Making Regarding PSDP Decision Making Regarding Projects Issues for Decision-Making on Transport Sector Institutional Reform Pursuit of Road Safety Current Situation Policies for Road Safety Intermodal Facilities Development Current Situation Policies for Intermodal Facility Development Cross Border Facilities Development Current Situation Policies for Cross Border Facility Development Recommendations Institutional Capacity Enhancement Institutional Capacity of Road Administration Institutional Reform of Road Administration Railway Administration Environmental Consideration EIA Regulations EIA Procedure Environmental Management Plan JICA and Pakistan EPA Guidelines Current EIA Issues Chapter 7. ROAD PLAN Planning Approach Introduction Planning Process Ongoing and Committed Projects Demand- Supply Analysis Growth in Travel Demand Scenario Analysis Desired Route Analysis Corridor Analysis Detour Rate Analysis Implications of the Analyses on Road Planning Development Plan Pakistan Motorway Network

25 7.3.2 Highway Network Cross River Development Bypass Schemes Road Maintenance Cost Estimation Design Standard Cost Estimation Master Plan Projects Candidate Projects Project Evaluation Implementation Schedule Chapter 8. RAILWAY PLAN Planning Approach Role of Railway Transport at Present Profitable Market Target Market Improvement of Management Development of the Corridor and a High-Speed Freight Transport System On-going and Proposed Projects Demand- Supply Analysis Target Demand for Passenger Transport Target Demand for Freight Transport Development Plan General Short-term Plan (First Stage) Medium-term Plan (Second Stage) Long-term Plan (Third Stage) Curtailment of Light Traffic Lines Master Plan Projects Railway Infrastructure Rolling Stock Fleet Project Evaluation Schedule and Cost Reform of Pakistan Railways Overview Historical Perspective of PR Privatization Proposed Institutional Reform The Overall Effects of the Corporatization The Steps towards the Ultimate Privatization

26 Chapter 9. PORT PLAN Planning Approach Function Allotment of Port Activities between Karachi and Qasim Port Gwadar Port Demand - Supply Analysis Seaborne Throughput Required Scale of Port Facilities Development Plan Effective Utilization of the Existing Facilities Strengthening of the Container Terminal Modernization of the Dry Bulk Terminal Establishment of Additional Liquid Terminal Layout Plan Public and Private Partnership Master Plan Projects MTDF Projects Projects for the Master Plan Implementation Schedule Chapter 10. AIRPORT PLAN Planning Approach Introduction Planning Process Demand- Supply Analysis Analysis of the Past Trend Projection of Air Transport Demand in Pakistan Development Plan ASF (Airport Security Force) CAA (Civil Aviation Authority) PIA (Pakistan International Airline) Master Plan Projects Existing Projects Proposed Projects Chapter 11. IMPLEMENTATION PROGRAM Implementation Schedule Short-Term Plan Infrastructure Development Institutional & Financial Reform

27 PTPS Priority Projects Chapter 12. ROAD RESTORATION IN AJK AND NWFP Earthquake Damages on the Jhelum Valley Road Guideline for Restoration of the Jhelum Valley Road Related Recommendations for Road Network Development Restoration of Bridges on the Jhelum Valley Road as a Pilot Project Annex A. Annex B. Annex C. Annex D. Annex E. Annex F. Annex G. Traffic Survey Statistics of Railway Sector Review of Past Studies on Overloading Problem Calculation of Railway Capacity Environmental Criteria Preliminary Study of Environmental Assessment Process Vehicle Operating Cost and Time Value

28 List of Figures and Tables Figures Figure Overall Flow of the Study (Master Plan) Figure Organization of the Study Figure Structure of this Report Figure Length of Roads in Pakistan Figure National Highways and Motorways Figure Bypasses along N Figure Past Trend in Freight and Passenger Transport Figure Past Trend in the Number of Registered Vehicles Figure Vehicle Composition Figure Daily Traffic Volume of Motorway (July, 2004) Figure Top 10 Commodities Carried by Truck Figure Transport Distance of Perishable Goods Figure Number of Casualties Figure Numbers of Accidents reported in Newspapers Figure Organization of NHA Figure Flow of Funds for the NHA Figure Demand and Allocation of PSDP Figure Pakistan Railway Network Figure Change in Average Distance Travelled Figure Daily Operation of Passenger Trains Figure Flow of Funds for the PR Figure Example of Long Waiting Time of Freight Train Figure Example of Long Waiting Time on Single Track Line Figure Karachi and Qasim Ports Area Figure Port of Karachi Figure Port of Qasim Figure Cargo Handled at the Port of Karachi Figure Cargo Handled at the Port of Qasim Figure Number of Vessels Calling at the Port of Karachi Figure Number of Vessels Calling at the Port of Qasim Figure Vessel Waiting Time at the Port of Karachi (per ship) Figure Vessel Waiting Time at the Port of Qasim (per ship) Figure Organization Chart of KPT Figure Organization Chart of PQA Figure Airport Locations Figure CAA Radar Coverage Chart

29 Figure Domestic Flight Network and Number of Flight Figure PIA International Flight Route Figure Time Line of the Commercial Airline Activity Figure Air Passenger Traffic by Airline (Domestic) Figure Air Passenger Traffic in Pakistan Figure International Passengers by Airport Figure Domestic Passengers at Four Major Airports Figure International Passenger at Four Major Airports Figure Total Cargo at all Airports Figure Major Cities and Corridors Figure Transportation Flow in Pakistan, Figure Linear Regression on Annual Population Growth Rate Figure Future Population Growth Rate and Population, Figure Population Distributions and Density, Figure Future population Increase by Province and Traffic Zone Figure Employment Composition by Industrial Sectors in Figure Trend of GDP Growth by Sector Figure Economic Growth Scenario Figure Projection of GDP by Scenario Figure Consumption of oil products in Pakistan (tonnes/year) Figure Production of Cement in Pakistan Figure Correlation between Number of Vehicles and GDP Figure Future Increase of Vehicle Fleet in Pakistan Figure Process followed for the Demand Forecast Figure PTPS Zoning Figure Overall Steps for Creating O/D Matrices Figure Example for O/D Pair Calculation Figure Vehicle Trip Distribution (2005) Figure Vehicle Trips Figure Passenger Trips and Freight Trips (Road) Figure Increase in Land Transport Volume and GDP (1.0 in FY94-95) Figure Regression Analysis for Passenger-Kms Figure Regression Analysis for Ton-Kms Figure Desired Line of Road Transport (Projection) Figure Increase in Transport Volume by Rail (1.0 in ) Figure Comparison of Economic Cost between Truck and Railway Figure Comparison between truck tariff and railway tariff Figure Proportion of Freight Transport Volume by Road by Distance Figure Conversion Curve of Railway

30 Figure Regression Analysis of Passenger Demand for Railway Passenger Figure Daily Speed-Flow Relationships for Traffic Assignment Figure Long-term Policies and Strategies of PTPS Figure Correlation of actual monthly income and estimate Figure District-wise Social Indicators as Proxy Variables of Poverty Figure Breakeven Point of Transport Cost by Road and Railway Figure PTPS Procedure of Project Prioritization Figure Introduction of Road Development Account for the NHA Figure Flow of Funds for the NHA after the Financial Reform Figure Concept for New Accounting System Figure Business Structure of the Railway Sector after Privatization of Operators Figure Approval Process Regarding PSDP Figure Approval Process and Procedures of PTPS Projects Figure Approval Process Regarding Provincial Projects up to Rs. 5 billion Figure Approval Process Regarding Provincial Projects above Rs.5 billion Figure Transport Policy and Coordination Mechanisms Figure Traffic Accidents Death Rate in the World Figure Proposed Corridor Development of Cross Border Route Figure Procedure for Road Network Planning Figure Location of Ongoing/Committed Projects Figure Road Network after current projects Figure Traffic Assignment for Do-Minimum and MTDF Scenario (2010) Figure Traffic Assignment for MTDF Scenario (2015, 2025) Figure Traffic Assignment for Modal Shift Scenario Figure Assigned Traffic of 2025 Demand on Current Network Figure Demand and Supply Gap on Screen Lines Figure Geographical Distribution of High Detour Rates Figure Location of Proposed Motorway Network Figure Highway Improvement and Widening Plan Figure Existing and Proposed Bridges Figure Location of Existing and Proposed Bypasses Figure Karachi Access Road Figure Location Map of Lahore Strategic Peripheral Route Figure Overloading Vicious Circle Figure Typical Cross Sections Figure Location of New Projects in the MTDF Figure Location of Proposed Projects in PTPS Figure Traffic Assignment for PTPS Network Figure Vehicle Operating Cost (Economic) by Vehicle Type by Road Condition

31 Figure Criteria for Economic Evaluation Figure Accumulated Project Cost by Ranking Figure Possible Demand in Freight Transport by Rail (Tonnage) Figure Relationships between Management Reform and Investments Figure Development Plan of Railway System and Container Terminals Figure Effects of Project Figure Outline of Time Table for Pakistan Railways Privatization Figure Master Plan of the Gwadar Port Figure Correlation between GDP and Trade Volume Figure Logistic Curve for Estimation of Containerization Figure Layout Plan at Karachi Port (Master Plan) Figure Layout Plan at Qasim Port (Master Plan) Figure Roles Sharing of Public and Private Sector in PPP Port Projects (%) Figure Air Passenger Demand Analysis Tables Table Past Trend of Railway and Road Transport Shares Table Road Length and Density Table Administrative Classification of Roads Table Current Road Network Length in Four Provinces Table National Highways and Motorways Table Present Status of Motorways Table Traffic Volume Data from the PTPS Traffic Survey Table Accident Statistics Table Average ESAs of Trucks Table Trends in Surcharges on POL from Road Users Table Trends in Funding to the NHA Table Financial Status of NHA* Table Loans at the End of FY 2002/ Table Maintenance Fund and Expenditure Table NHA Financial Plan for Maintenance in Table Financing for Development and Maintenance of Provincial Roads in the NWFP Province Table Route and Track Length by Gauge Table Classification of the Lines in 2004/ Table Progress of Track Strengthening and Rehabilitation Work Table Structural Standard Table Existing Interlocking Systems Table Existing Block System

32 Table Number of Over-aged Locomotives over 20 years old Table Locomotives under 20 years old or Recently Rehabilitated Table Proposed railway project for the Master Plan in Table Railway Passenger Data Table Pakistan Railways: Classification of Passenger Services Table Passenger Fares Table Fare for the Class of Air-conditioned lower special class Table Pakistan Railways: Freight Data Table Commodity Volume Carried Table Change in Transport Volume for Main Commodities Table Pakistan Railways: Basic Rate Scale Table Revenue and Expenditure of the PR Table Problems with the Existing Signalling System Table Actual Delays Observed Table Tidal Levels Table Navigation Channels at the Port of Karachi Table Berth Facilities at the Port of Karachi Table Storage Facilities at the Port of Karachi Table Navigation Channels at the Port of Qasim Table Berth Facilities at the Port of Qasim Table Cargo Handling Volume at the Ports of Karachi and Qasim Table Cargo Handled at the Port of Karachi Table Cargo Handled at the Port of Qasim Table Container Traffic at the Port of Karachi Table Container Traffic at the Port of Qasim Table Containerized Ratio at Karachi Port (Million Tons/Year) Table Utilization of Berths at the Port of Karachi Table Utilization of Berths at the Port of Qasim Table Main Tariff of KPT and PQA Table Trend in the Financial Status of the KPT Table List of Investments of the KPT Table Budget of the KPT (2004/05) Table Trend in Financial Status of the PQA Table Trend in the Financial Status of the PNSC Table Airport Condition and Facilities in Pakistan Table Trend in the Financial Status of the CAA Table Navigation Charge for Over Flight in Pakistan Table Landing Charge Table Aircraft Housing Charge

33 Table Passenger Service Charge Table Trend in the Financial Status of the PIAC Table Details of Investment Financed by the PIAC Table Population and Rate of Birth, Death and Increase Table Change in population and Growth Rate in Pakistan Table MTDF Demographic Targets Table Projected Population of Pakistan, Table Population Projection by US Census Bureau Table Regional Population in Census Year Table Projection of Provincial Population, Table Future Population by Traffic zone Table Trends of Labour Force and Employment Table Future Labour Force and Employment Table Industry Classification in Pakistan Table Employment Composition by Province in Table Change in Employment Composition by Industrial Sector Table Employment by Industrial Sector and by Province Table Past Performance of Economic Growth Table Economic Growth Scenarios Table Projection of GDP and GDP per Capita by Scenario Table Production of Crops ( ) Table Production of Meat, Milk and Fish Table Export Trends for Major Industrial Products Table Growth of Production, Consumption and Export assumed for Selected Goods in MTDF, 2004/ / Table Freight Traffic Growth Assumed in MTDF Table Likely Growth of Land Freight Transport Demand Table Regression Equation of Number of Vehicles on GDP Table Future Vehicle Fleet in Pakistan Table Average Price of Truck and Bus Table Required Fleet and Investment in Trucks and Buses Table Traffic Analysis Zone and District Table Comparison of Vehicle OD Tables Table Projection of Land Transport Demand Table Share of Interzonal Traffic Table Projection of the Future Interzonal Transport Table Unit Costs of PR Table Unit Costs of Road Transport Table Calculation of Transport Cost per Kilometre by Rail

34 Table Target Railway Share of Freight Transport by Transport Distance Table The Model Parameters for the Modal Share Calucation Table Future Potential Demand of Railway (Interzonal) Table Projection of Railway Passenger Demand Table Projection of Passenger Transport Demand Table Projection of Freight Transport Demand (Million Ton-kms) Table Passenger Traffic Forecast in MTDF and PTPS Table Freight Traffic Forecast by MTDF and PTPS Table Overview of MTDF Policy and Strategy for Transport Sector Table Policy and Strategy of Transport Sub-Sectors of MTDF Table Regional Disparity in Pakistan, 1998/ Table Proportion of Deficit of GDP Table Trends in Public Debt Table Details of Budgetary Expenditures Table Details of Development Expenditures (2001/ /05) Table Investment Plans for Transport Sector (2005/ /10) Table Allocation of Funds of Government (2005/ /10) Table Trends of Foreign Investment Table Trends of FDI in Main Economic Groups Table List of Financial Assistance of World Bank Table List of Financial Assistance of ADB Table Case of 2.5% of GDP Investment (2005/ /25) Table Investment Level under MTDF (2005/ /25) Table Investment Level under MTDF (2005/ /25) Table Target Investment Level at 2.0% of GDP Table Relationship between GDP and Road Taxes Table Road Tax Estimation Table Comparison between Estimated Revenues and Financing from Budget Table Resource Allocation under Proposed Investment Level Table Estimation of Revenue Surplus Table Summary of Dry Port Traffic Survey Results Table No. of Vehicles Counted and Goods Tonnage Estimated Across Border Posts, Table Commodity trade between countries of the Region, Table Comparison of GDP and Trade Volume with Pakistan of Neighboring Countries Table Comparison of Cross-border Trade Table Mandatory List for EIA / IEE Table Comparisons of Requirements of JICA and Pak-EPA Environmental Guidelines Table List of Ongoing and Committed Projects Table Growth of Transport Demand (Interzonal Transport)

35 Table Distance and Detour Rate among Major Cities Table List of Proposed Motorway Network Table Lahore Strategic Peripheral Route Development Plan Table Worldwide Road Maintenance Cost Data ROCKS Table Overloading Vicious Circle Table Road Standards Table Category of Cumulative Standard Axles Table Comparison of Unit Rates Table Per Kilometer Construction Cost for New Roads Table Construction Cost per Kilometre for Road Improvement Table List of New Projects in MTDF Table List of Proposed Projects in PTPS Table Passenger Time Value Table Setting of With -Without Case Table List of Road Projects for Traffic Assignment Table Calculation of Economic Indicators Table Rating of Criteria for Project Evaluation Table Evaluation of MTDF New Road Projects Table Evaluation of PTPS Road Projects in Order of Total Score Table Implementation Schedule Table Unit Profits of PR by Business Units Table Calculation of Necessary Number of Passengers per Train Table Comparison of Basic Data of Passenger Services Table Current Investment Projects Table Target Demand for Railway Passenger Transport Table Estimated Passenger Traffic Density of Each Lime Table Target Demand for Railway Freight Transport Table Rolling Stock Procurement Plan Table Estimated Line Capacity of Double-track in Karachi - Lahore for Each Stage Table Estimated Transport Capacity of a Freight Train Table Estimated Line Capacity of Single track in Primary A Lines for Each Stage Table Estimated Line Capacity of Single-track in Other Lines on Each Stage Table Cost Allocation for Economic Evaluation Table Travel Time Saving and VOC Saving Table Schedule and Estimated Cost of the Project Table Development of Gwadar Port (Phase I and II) Table Trade Volume Forecast Model Table Forecast of Future Trade Volume Table Demand Forecast for Import/Export Cargo

36 Table Percentage of Containerization Table Ratio of Containerization Table Container Cargo Volume and Number of Containers Table Cargo Classification and Allocation at Each Port Table Required Number of General Cargo Berths Table Required Number of Dry Cargo Berths Table Required Number of Container Cargo Berths Table Required Number of Liquid Bulk Cargo Berths Table Required Number of General Cargo Berths Table Required Number of Dry Bulk Cargo Berths Table Required Number of Liquid Cargo Oil Berths Table Required Number of Container Cargo Berths Table Required Number of Iron Ore and Coal Berths Table Required Number of Crude Oil and Others Berths Table Required Number of Chemical Berths Table Berth Requirements at the Two Ports Table Development Plan for the Ports Table List of Port Projects (Master Plan) Table Stage Plan for Construction of the Master Plan Table Projection of Air Passenger Traffic by Trend Method Table Projection of Air Passenger Demand (Target) Table Current Aviation-Related Projects by ASF Table Current Aviation-Related Projects Table Current Aviation-Related Projects by PIA Table Proposed Projects of Airport Development Table Investment Requirement Table Proposed Cost Allocation of the Master Plan Projects (Road) Table Proposed Cost Allocation of the Master Plan Projects (Rail) Table List of Short-Term Projects (Road) Table List of Short-Term Projects (Railway) Table List of Short-Term Projects (Port) Table List of Short-Term Projects (Air) Table Road Damages

37 Chapter 1. INTRODUCTION 1.1 Outline of the Study Background of the Study The Islamic Republic of Pakistan is a large territory (land area of 796,000km 2 ) located north-east of the Arabian Sea and extending towards the Himalayas on the border of China. The country has four provinces (Punjab, Sindh, Balochistan, and North-West Frontier Province), two territories (Islamabad Capital Territory and Federally Administrated Tribal Area), and the Pakistan parts of Kashmir. The distance between Islamabad (the capital of Pakistan) and Karachi (the provincial capital of Sindh having two important international ports) is about 1,200km in a straight line. The transport system in Pakistan plays an important role in unification of these regions in terms of political and economic activities. In order to realize efficient and effective investment with limited resources, it is necessary to develop a comprehensive transport plan. At present, the Medium Term Development Framework covers projects up to the year However, the socio-economic situation in Pakistan has drastically changed due to globalization and political and economical changes in surrounding countries such as Afghanistan. An extensive review of the present development strategies for the transport sector is urgently required in order to reflect recent trends in the socio-economic conditions. The Government of the Islamic Republic of Pakistan has requested the Government of Japan to provide technical assistance in carrying out a comprehensive transport development study titled the Pakistan Transport Plan Study in the Islamic Republic of Pakistan (hereinafter referred to as the Study or PTPS ). In response to this request, the Government of Japan agreed to conduct the Study and has entrusted its execution to the Japan International Cooperation Agency (hereinafter referred to as JICA ), the official agency responsible for implementing technical cooperation programs for the Government of Japan. Northern Pakistan Earthquake, October 8, 2005 On October 8 in 2005, the M7.6 Earthquake hit the northern Pakistan and left the devastating damage on infrastructure in AJK and NWFP. The emergency repair works were required for the reconstruction of the area, and JICA decided to rearrange of the Study to investigate the urgent works of road sector in accordance with a request from the Government of Pakistan. In the beginning of the Study, AJK was excluded from the Study but a series of field surveys along Murry - Muzaffarabad Road and Jhelum Varry were carried out. The results of the field survey are described in Chapter 12 of this report Objectives of the Study The major objectives of the Study are: Study Area To formulate a short term plan (2005/6~2009/10) and a master plan (2005/6~2024/25) for the development strategy of the national transport system of Pakistan covering all transport modes. To identify priority projects and carry out feasibility studies (F/S) for selected projects. To promote the transfer of knowledge and technology so that the counterparts in the transport sector of the Pakistan authorities are able to modify, revise and update the master plan after the Study is completed. The study area is the entire territory of Pakistan. 1-1

38 International cargo traffic to and from neighbouring countries (i.e. Afghanistan, India and China) is included in the Study. The Study covers all transport modes, i.e. land transport (roads and railways), sea transport and civil aviation except inland water transport. As land transport is dominant in Pakistan, the Study paid special attention to this transport mode. The Study Team concentrated on the land transport sector, especially the road sector. Judging from the density of the transport network, the transport capacity and the size of investments, the importance of the road sector is apparent. With respect to the railway, the Study Team considered the role of railway from the viewpoint of the national economy. The private sector takes the initiative in business activities for the marine transport/port sector and aviation/airport sector in the PTPS and consequently studies are confined to the consideration of the validity of existing projects based on demand forecasts Flow and Contents of the Study The overall work flow is shown in Figure and the contents of each phase of PTPS were: (1) Preparatory Work The Study Team collected and analyzed relevant information and materials, and established a basic policy for the Study. Based on this information, the Study Team prepared the Inception Report. (2) First Stage Field Work The Study Team submitted and explained the policy and the contents of the Inception report to the Pakistani counterpart. After the consensus of both sides, the Study Team prepared the Progress Report based on the information and results obtained through following activites: analysis of present condition; review of previous studies on transport in Pakistan; identification of problems; and field reconnaissance. In addition, the Study Team commenced the following works for the formulation of the draft final report (Master Plan): Setting up socio-economic framework; Traffic survey and analysis; Forecast of traffic demand; Listing of priority projects and analysis of present situation (3) Second Stage Field Work The Study Team submitted and explained the contents of the Progress Report to the Pakistani side, and a consensus was reached between both sides. Based on the result of discussions on the Progress Report and the results of the First Stage, the Study Team formulated the Pakistan Transport Master Plan for the year 2025 as the draft final report. (4) Third Stage Field Work The Study Team held a seminar on the Study and explained the contents of the draft final report (Master Plan) to the Pakistani and Japanese sides. Based on the comments on the draft final report, the Study Team finalized the Master Plan and submitted it to Pakistani side. 1-2

39 Year/ Month Study Item and Flow Collection of relevant data Reports/ Seminar June Preparation Work Establishment of the basic policy of the Study Preparation of Inception Report July Submission and discussion of Inception Report IC/R S/C August September First Stage Field Work Analysis of present condition of the study area and problem identification Setting up socio-economic framework reflecting regional, international conditions surrounding Pakistan (year 2010, 2025) Traffic Survey and analysis Draft P/R Future traffic demand forecast October Submission and Discussion of Progress Report P/R S/C Establishment of Development Strategy November Second Stage Field Work Formation of Pakistan Transport Master Plan for the year 2025 December Preparation of implementation plan by transport mode. Selection of the Priority Development Projects. S/C January Preparation of Draft Final Report (Master Plan) February Third Stage Field Work Explanation of Draft Final Report (Master Plan) Draft F/R S/C Seminar Preparation of Final Report (Master Plan) March Submission of Final Report (Master Plan) F/R Figure Overall Flow of the Study (Master Plan) 1-3

40 1.2 Output of the Study Reporting Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) The Study team completed and submitted the following reports in English. Name of report Submission date Inception Report End of June 2005 Progress Report End of September 2005 Draft Final Report End of January 2005 Final Report End of March 2006 In addition to the reports above, an annex volume was submitted, reporting the results of analysis on present conditions of transport demand and future demand forecast, in the form of database. Those results were transferred to the Pakistani side through joint-works, seminars and workshops, in order to make effective utilization possible after the PTPS Seminars The Study Team held two seminars for NTRC and other stakeholders on the subjects of traffic study, demand forecast and the Master Plan as follows: 1 st Seminar 2 nd Seminar 3 rd Seminar Date August 17, 2005 December 22, 2005 February 16, 2006 Venue NTRC Auditorium NTRC Auditorium Marriott Hotel Subjects - Traffic Survey Contents - Methodology of Demand Forecast - Database - Traffic Survey Results - Transport Analysis - Demand Forecast - VOC and TTC - Master Plan Photo: 1 st Seminar Photo: 1 st Seminar, NTRC Auditorium Photo: 3 rd Seminar, Marriott Hotel Photo: 3 rd Seminar, Marriott Hotel 1-4

41 1.3 Organization and Participants of the Study Organization of the Study The organization is shown in Figure Government of Paksitan Government of Japan Steeriing Committee Ministry of Communication Japan International Cooperatin Agency JICA Advidory Committee Study Executing Body National Transport Reserch Centre JICA Study Team Figure Organization of the Study Member of Counterpart The Government of Pakistan nominated the National Transport Research Centre (NTRC) as the Pakistani counterpart for the Study. The Study Team collaborated closely with the NTRC personnel and conducted many works and investigations with the assistance of relating Ministries, agencies and entities of Pakistan. The members of the counterpart are as follows; Mr. Muhammad Kazim Idris Chief of NTRC Comprehensive transport planning Mr. Bashir Ahmed Deputy Chief of NTRC Roads, airports and aviation planning (1) Mr. Sajid Mansoor International trade and multi-modal transport (1)/ Transport statistics Mr. Muhammad Naeem Road planning / Transport design, evaluation and Appraisal (1) Mr. Masoud Bakht Economic, financial planning / Traffic surveys and analysis Mrs. Fouzia Sultana Demand forecast / Women mobility and gender issues Mr. Mumtaz Hussain Malik Highway safety and road transport planning Mr. Hameed Akhter Transport research and planning Mr. Tariq Aleem International trade and multi-modal transport (2) Mr. Khizer Javed Railway planning / Port / Shipping and IWT (1) Mr. Shahzad Ahmed Mirza Transport statistics (2) Study Team Mr. Tanseer Ahmed Khan Railway planning / Port/Shipping and IWT (2) Mr. Shahbaz Latif Mirza Environmental planning The members of the Study Team are as follows; Mr. Minoru Shibuya Mr. Tetsuo Wakui Mr. Koichi Tanuma Mr. Hiroshi Hotta Team Leader / Comprehensive transport planning Deputy team leader /Road planning (1) /Transport planning Deputy team leader /Road planning (2) /Road facility planning Social economic / Industrial development 1-5

42 Mr. Haruhiko Imai Mr. Osami Matsumoto Mr. Saneyuki Nishi Mr. Masayuki Fujiki Mr. Hiroshi Mizumasa Mr. Khushal Khan Mr. Shogo Uchida Mr. Daisuke Nagao Dr. Katsuhiko Takahashi Mr. Mazhal Iqbal Mr. Kazuharu Koishikawa Dr. Ahmed Morgan Mr. Masahito Homma Mr. David Gordon Lees Mr. Hironori Kuroki Mr. Takashi Shoyama Mr. Hisatoshi Naito Mr. Takeshi Yoshida Dr. Pucai Yang Mr. Masaru Homma Mr. Mineo Endo Mr. Yoshitaka Motomura JICA Advisory Committee Development strategy / Regional planning Railway planning / Railway business strategy Railway facility planning Port planning Airport planning Traffic survey / Traffic analysis Traffic demand analysis / Traffic demand forecast Financial resource planning Management and organization / Privatization Cargo transport policy / Cargo facility planning Road design / Natural condition survey Structural design / Natural condition survey Economic / Financial analysis Social environmental specialist Natural environmental specialist Border traffic analysis Road restoration plan Bridge design Disaster prevention Construction plan and cost estimation Preparation of tender documents Coordinator JICA organized the Advisory Committee to provide advice and guidance. The members are given below; Mr. Tetsuo Yai Mr. Keiji Hashida Chairperson Member Steering Committee The Pakistani side organized the Steering Committee to discuss the Study. The members of the Steering Committee are given below; 1 Ministry of Communications 2 Planning Commission 3 National Highway Authority 4 Planning & Development Department, Govt. of Punjab 5 Planning & Development Department, Govt. of NWFP 6 Planning & Development, Govt. of Sindh 7 Planning & Development, Govt. of Balochistan 8 Ministry of Local Government & Rural Development 9 Ministry of Defense Civil Aviation Authority 10 Ministry of Commerce 11 National Highways & Motorway Police, Islamabad 12 Ministry of Railways 13 Ministry of Petroleum & Natural Resources 14 Ministry of Environment 15 National Logistic Cell 16 Japanese International Cooperation Agency (JICA) 1-6

43 1.4 Components and Structure of this Report This report consists of 12 chapters and seven appendices. Chapter 2 describes the present situation and identifies problems and issues by each sub-sector. Chapter 3 sets up the socioeconomic framework such as population by region and economic growth rate. Chapter 4 estimates the future transport demand and analyzes the desirable modal share between road and rail. The result of the Traffic Survey underlies Chapter 4, and the survey itself is described in Annex A in detail. Based on Chapter 2 4, Chapter 5 establishes three transport policies and seven development strategies. Chapter 6 deeply analyzes and clarifies planning directions for the seven strategies. Sector plans are described in Chapter Chapter 11 summaries projects proposed in the sector plans, and formulates cost allocation program for the Master Plan period and short-term program. Chapter 12 is an independent chapter that describes recommendation for road restoration in AJK and NWFP where the earthquake caused devastating damage in October 8, Introduction 2. Present Transport Situation and Issues 3. Socio-economic Framework Road Railway Port Airport - Infrastructure - Transport - Administration - Financial Situation - Problem and Issues Annex-A. * Traffic Survey 4. Transport Demand Projection 5. Overall Transport Policy 6. Development Strategy 7. Road Plan 8. Railway Plan 9. Port Plan 10. Airport Plan 11 Implementation Program 12. Road Restoration in AJK and NWFP Appendices A. Traffic Survey * B. Statistics of Railway Sector C. Review of Past Studies on Overloading Problem D. Calculation of Railway Capacity E. Environmental Criteria F. Environmental Assessment G. Calculation of Vehicle Operating Cost Figure Structure of this Report 1-7

44 Chapter 2. PRESENT TRANSPORT SITUATION AND ISSUES 2.1 Overview of Transport Sector Pakistan has a population of approximately 160 million and is the sixth most populated country in the world. Real GDP is Rs. 6,548 billion (2004/05 est.), and per capita income was estimated at $736 in 2004/05 1, while per capita income in terms of PPP (Purchasing Power Parity) was estimated at $2,160 in Exports and imports in 2004/05 amounted to $13.7 billion and $16.7billion, respectively. With this economic scale, the total inland traffic by road and rail amounts to 246 billion passenger-km of passenger traffic and 119 billion ton-km of freight traffic (2004/05). Road is the dominant mode of inland traffic and carries 91% of passenger traffic and 96% of freight traffic. The total length of roads is approximately 258,000 km, which includes 7,967 km of National Highways, 711km of Motorways, and 207km of Strategic Roads. The National Highway Authority (NHA) operates and maintains the National Highway network. Photo: N-5 Photo: M-2 The Pakistan Railways (PR) has 11,515km of tracks and 7,791km of route network with 633 stations. Out of the total route-kilometres, 1,043km are double track. There is an electrified section between Lahore and Kanewal of 285km in length. PR operates passenger and freight services, and carried 5.46 billion ton-km of freight and 23.8 billion passenger-km in 2004/05. Photo: Karachi Cant. Station Photo: North bound train carrying oil at Pano Akil Station 1 Pakistan Economic Survey World Development Indicators database, World Bank, 15 July

45 Around 95% of imports and exports are handled through Karachi Port and Port Qasim. Another deep-sea port is now under construction in Gwadar. Karachi Port handles about 30 million tons of cargo, while Port Qasim handles about 11 million tons. Approximately 60% of the imported cargo is transported inland from the two ports by road and rail to the upcountry. There are 44 airports including five international airports located in Islamabad, Karachi, Lahore, Peshawar, and Gwadar. PIA (Pakistan International Airlines) is the national flag carrier, while Aero Asia, Shaheen Air International, Royal Airlines, and Airbule are private airlines in Pakistan. These Pakistani airlines carried 2.8 million domestic passengers in 2003/04. The Indus, Chenab, Jhelum, Ravi, and Sutlej rivers flow through the territory of Pakistan, but inland water transport is very limited. Table shows the transport volumes by road and rail from 1990/91 to present. Table Past Trend of Railway and Road Transport Shares Passenger Traffic Freight Traffic Fiscal Year Road (MPK) Rail (MPK) Total (MPK) Road (%) Rail (%) Road (MTK) Rail (MTK) Total (MTK) Road (%) Rail (%) 1990/91 128,000 19, , ,211 5,709 40, /92 131,352 18, , ,536 5,962 47, /93 135,000 17, , ,719 6,180 59, /94 137,037 16, , ,596 5,938 77, /95 146,132 17, , ,770 5,661 81, /96 154,566 18, , ,900 5,077 84, /97 163,751 19, , ,345 4,607 88, /98 173,857 18, , ,527 4,447 93, /99 185,236 18, , ,246 3,967 99, /00 196,692 18, , ,261 3, , /01 208,370 19, , ,085 4, , /02 209,381 20, , ,818 4, , /03 215,872 22, , ,172 4, , /04 222,779 23, , ,244 4, , (Jul.-Mar. figures for comparison between 2003/04 and 2004/05 ) 2003/04 166,761 16, , ,025 3,348 88, /05 171,749 18, , ,842 3,816 90, Source: Economic Survey,

46 2.2 Road Road Network (1) Roads in Pakistan The Pakistan road network is approximately 258,000 km in length. Approximately 60% of the network is paved. The length of roads has increased by 50,355km since 1994/95 however the increase since 1999/2000 has only been 9,660km. The recent trend is that high type roads are increasing while low type roads are decreasing as shown in Figure The figure implies that the strategy for road development has been shifted from expanding the road network to expanding the capacity of the existing network. '000 Km Low Type Road High Type Road Source: Economic Survey Figure Length of Roads in Pakistan The road density in Pakistan is 0.32 km per square km, but the Medium Term Development Framework (MTDF) proposes to enhance this to 0.42 km per square km through construction of 80,000 km of roads in the years ahead. The road density in Punjab and Sindh is relatively high at 0.51 and 0.57 km/km 2, while it is extremely low in Balochistan as shown in Table On the other hand, road length per population is highest in Balochistan, while it is the lowest in Punjab. Table Road Length and Density Pakistan Punjab Sindh NWFP Balochistan Total Road Length (km) 258, ,140 79,834 30,049 42,191 Percentage of Paved Road 63% 78% 69% 46% 13% Area (km2) 796, , , , ,190 Road Density (km/km2) Population (million) Road Length per Mil. People (km) 1,736 1,244 2,420 1,292 5,909 Number of Registered Vehicles 4,974,000 2,920,984 1,457, , ,264 Road Length per 1,000 Vehicles Source :NTRC, prepared in 2003/04 based on the information of Provincial C&W Department, NHA, Provincial Excise & Taxation Department and Economic Survey 2003/04 2-3

47 The administrative classification categorizes the roads according to the government agency responsible for the construction and maintenance of the road as summarized in Table Table Administrative Classification of Roads Classification Administration Length Function National Highway National Highway Authority 9,000km Representing the main Motorways (NHA), Ministry of transport corridors and Strategic Road Communications providing inter-provincial linkages and connections to the neighbouring countries Provincial Roads Communication and Works Department (C&WD), Works and Services Department (WSD), and Frontier Highway Authority (FHA) 101,000km Providing access to the economic and population centres in the four provinces District Roads District government 94,000km Providing access to villages Municipal and cantonment roads Source: JICA Study Team Municipal government and army 54,000km and remote areas Providing access to villages and remote areas Since the Study focuses on the inter-regional road network, the discussion hereinafter deals with National Highways, Motorways, Strategic Roads and Provincial Roads. The JICA Study Team reviewed the length of roads to identify Provincial Roads as shown in Table The provincial highways with a total length of 21,000 km are regarded as Provincial Roads in the Study. Table Current Road Network Length in Four Provinces (Unit: km) Federal Provincial Government District Government Municipal Cantonment Council NHA C&WD FHA C&WD C&WD BDA Province NH MW ST H H S A A Punjab 1, ,664-9,672 20,906-37,079 21,995 N/A Sindh 1, ,499-7, N/A N/A N/A NWFP 1, ,999 6,127 4,272-13, N/A Balochistan 3, ,388-8,800 3,940 N/A 19, N/A Northern N/A N/A N/A N/A N/A N/A N/A N/A Area Subtotal 8, ,949 1,999 32,711 38,966-20,948 Total 8,918 92,634 93,832 51,921 1,999 Note: 1. Abbreviation NH : National Highway/ MW: Motorway/ ST: Strategic Road/ H: Highway/ S: Secondary road/ A: Access road NHA : National Highway Authority/ C&WD: Communication and Works Department/ FHA: Frontier Highway Authority/ BDA : Balochistan Development Authority 2. MTDF indicates 101,000 km as provincial inter-city roads. However the study team confirmed that the actual provincial inter-city roads were different distances than expected in four provinces. Hence, 101,000 km in the MTDF seems to include all provincial roads such as provincial secondary roads and intra-district ones. Source: Prepared by NTRC based on the information of C&W Department, NHA, Provincial Excise & Taxation Department and Economic Survey 2003/04. Deducted by NTRC and the Study Team when the current road network was provided because overlapping was admitted for submitted listed networks. 2-4

48 (2) National Highways There are 14 National Highways (8,600km), five Motorways (767km), and two Strategic Roads (207km) in Pakistan as listed in Table and illustrated in Figure N-5 is the longest and the most important National Highway. Due to its high importance, dualization of N-5 has almost been completed except for Karachi to Hyderabad, Peshawr to Torhan and other small portions. The other National Highways are 2-lane roads and only Kohat-Peshawar section of N-55 has a dual carriageway. N-55, named the Indus Highway, is the second longest National Highway. N-25 is an important international and national highway connecting Karachi with Quetta and Chaman on the Afghanistan border. Recently, N-25 has been significantly improved with the assistance of the ADB, WB and JICA. Table National Highways and Motorways No. Route Length (km) National Highways (8,113 km) N-5 Karachi - Hydelabad - Multan - Lahore - RWP - Pashawar Torkham 1,819 N-10 (Makran Coastal Highway) Liari - Ormara - Pasni - Gwadar Gabd 653 N-15 Nansehra - Naran - Jalkhad - Chilas Road 240 N-25 Karachi - Nela - Khuzdar - Kalat - Quetta Chaman 813 N-35 *1 (KKH) Hassanabdal - Abbottabad - Thakot - Gilgit Khunjrab 806 N-40 Lakpss (near Quetta) - Dalbandin Taftan 610 N-45 *2 Nowshera - Dir Chitral 309 N-50 D.I. Khan - Zhob - Kuchlad (near Quetta) 531 N-55 (Indus Highway) Kotri - D.G. Khan - D.I. Khan - Kohat Peshawar 1,264 N-65 Sukkur - Sibi - Saryab (Quetta) 385 N-70 Multan D.G. Khan - Loralai - Qila Saifullah 447 N-75 Islamabad - Satra Mile - Lower Topa Kohala 90 N-80 *3 Turnol - Fatehjang Kohat 146 N-85 Hoshab Panjgur Nag Basima Surab 487 Motorways (711 km) M-1 Islamabad - Peshawar Motorway 155(35) M-2 Lahore - Islamabad including 32 km links & Lahore Bypass 367 M-3 Pindi Bhattian - Faisalabad Motorway 53 M-9 Karachi - Hyderabad Motorway 136 Strategic Roads (207 km) S-1 Gilgit - Skardu Road 167 S-2 Kohala - Muzafarabad Road 40 Total 9,518 Note : M-1 has the remaining portion of 120km at present. *1 : N35 is called as Karakoram Highway *2 : N45 was federalized in *3 : N80 was federalized in Source : NHA 2-5

49 Source: JICA Study Team Figure National Highways and Motorways M-1 (Islamabad Murhan) N-5 (Kabirwala Multan) 2-6

50 There are many topographical obstacles on the National Highways. For example, the Kohat Tunnel has only 2-lane despite the importance of N-55. N-70 has a very dangerous mountainous section between D.G.Khan and Fort Munro, where, on a winding section, rocks are sticking out over the narrow road, and the slopes are very steep. The Khushalgarh Bridge over the River Indus on N-80 is old and narrow. The bridge crosses its access roads at right angles, and container trucks can not pass over the bridge. The Lowari Rail Tunnel Project is underway to overcome topographical obstacles on N-45. The Malakand Tunnel (N-45) and the Lakpass Tunnel (N-25) are also planned to improve road transport. Many new bridges over the River Indus and other big rivers are proposed. There are lots of at-grade cross sections between the railway and the National Highways. N-70 (D.G.Khan Fort Munro) N-80 (Khushalgar Bridge over the River Indus) Tolls are collected at toll plazas on both the National Highways and the Motorways. Toll plazas were introduced by NHA in Toll Gate (N-5) Toll Gate (N-5) 2-7

51 (3) Motorways NHA plans to develop a network of full access controlled Motorways as a new economic corridor to provide fast transportation of goods and passengers. The total length of the planned Motorway network is 2,734 km as shown in Figure Of the ten planned Motorways, M-2 (Islamabad - Lahore Motorway, 6-lane, 367 km), M-3 (Pindi Bhattian - Faisalabad Motorway, 4-lane, 53 km) and 35 km long Islamabad - Burhan section of M-1 (Islamabad - Peshawar Motorway, 4-lane) are already opened to the traffic. M-2 bears a horizontal radius in excess of 1,500m in hilly terrain, but has a applied maximum gradient of 7%. M-9 (Karachi - Hyderabad Motorway, 136 km) is a 4-lane highway without access control at present. It will be expanded to a 6-lane access controlled Motorway in the future. In August 2005, the government approved the construction of a motorway between Faisalabad and Karachi with four sections named M-4, M-5, M-6 and M-7 respectively. Table Name Section Length (km) M-1 Islamabad - Peshawar Motorway M-2 Lahore - Islamabad including 32 km links & Lahore Bypass M-3 Pindi Bhattian - Faisalabad Motorway M-4 Faisalabad - Multan Motorway M-5 Multan - D.G. Khan Motorway M-6 D.G.Khan - Kakkar Motorway M-7 Kakkar - Karachi Motorway M-8 Gwadar - Khuzdar - Ratodero Motorway M-9 Karachi - Hyderabad Motorway (Super Highway) Present Status of Motorways Number of Lanes Status lane Islamabad - Burhan Section, 35 km long, was opened to traffic in September The remaining section is under construction with scheduled opening in January lane First Motorway of Pakistan, opened to traffic in lane Completed. Opened to traffic in lane Included in the Public/Private Sectors Programme of NHA 5-Year programme ( ) lane lane lane lane Gawadar - Turbat - Khuzdar and Shahdadkot Ratodero sections, 284 km in total length, are under construction, to be completed in lane At present 4-lane without access control. Expansion to access controlled 6-lane motorway is considered as a future BOT project. M-10 Karachi Northern Bypass 56 2-lane A 24 km long section was opened to traffic in The remaining section will be completed in December Mostly undivided 2-lane. ROW is secured to upgrade to divide 4-lane. Total 2,734 Source: NHA, JICA Study Team 2-8

52 (4) Provincial Roads Provincial roads are managed by different systems and structures enforced by the provincial governments. For instance, the government of Sindh has reinforced the road maintenance management system funded by the ADB in 2000/2001, using an adjusted HDM-4 programme with local conditions and ranked maintenance priorities to estimate the annual maintenance cost of its Road Maintenance Unit. The Communication & Works Department of the government of Balochistan is responsible for the construct and maintenance of six categorized roads, including provincial highways because the Road Management Unit (RMU) in the province was abolished in Therefore, the Balochistan Development Authority has suggested that the restoration of the defunct RMU is essential in order to develop road reference and classification, and to collect data on traffic volumes and road conditions, including roughness. Improvement of provincial roads is in progress, mostly with the active support of the ADB. Generally, it is to widen and rehabilitate the existing roads to 7.3 m carriageway paved with asphalt concrete, with 3.0 m wide shoulders. The applied design speed is 100 km/hr for flat terrain, 80 km/hr for rolling terrain and 60 km/hr for hilly terrain. (5) Road Condition and Maintenance A number of highway projects have been executed without a corresponding increase in the maintenance funds, and consequently a huge backlog of maintenance work has resulted in the loss of highway assets. This situation has increased the needs for major rehabilitation or new construction. The pavement condition survey in 2000 (NHA) indicated that: 50% of the NHA s existing network is in need of major rehabilitation of reconstruction. The remaining 50% will be lost in the near future if adequate maintenance and rehabilitation actions are not taken in a timely and effective manner. According to the results of the RAMD Study on pavement condition by NHA, 47% of the national highway network is classified Poor to Very Poor. Deterioration of provincial roads is relatively severe compared to national highways. With the assistance of the World Bank, the Road Asset Management Directorate was established in NHA in 2000, and the Road Asset Management System (RAMS) was created to streamline the annual maintenance business plan. RAMS includes the collection and analysis of data such as a road and bridge inventory, traffic data and pavement condition based on IRI and crack ratio, etc., prioritization of road sections for maintenance and preparation of the maintenance plan using HDM-IV. 2-9

53 (6) Bypass The major function of National Highways is to carry inter-provincial traffic or long distance traffic along important national corridors, connecting large cites where commercial and industrial activity is very high. National Highways cross the centre of those large cities, where local traffic mixes with long distance traffic, which disturbs traffic flow. Accordingly, National Highways have many congested cities as bottlenecks along their routes. Many bypasses have been constructed in major cities for National Highways to avoid congestion. Figure shows the cities that have bypasses along N-5. In addition to the cities in the figure, there are some bypasses under construction and many proposed bypasses along N-5. According to NHA, the number of cities with National Highway bypasses amounts to 61. Peshawar Rawalpind Jhelum Gujrat Wazirabad Gujranwala Lahore 13.8 km 9.2 km 15.5 km 16 km Bhai Pheru Pattoki Wah Radaram Renala Khurd Sahiwal Harappa Chichawatni Kasowal 7.2 km 6.8 km 1.4 km 5.2 km 13.5 km 3.8 km 6.8 km 6.2 km Iqbal Nagar Mian Channu Kacha Khu Qadir Pur Sadiqabad Dharki Mirpur Mathelo Ghotki 1.9 km 8.9 km 10.5 km 8.7 km Sangi Rohri Bhiria Moro Sakrand Hyderabad Karachi 5.3 km 16.0 km Source: NHA, JICA Study Team LEGEND Figure Bypasses along N-5 City having bypass There is a dilemma about bypass construction. Cities in Pakistan have been growing along arterial roads, including bypass roads. Soon after opening a bypass for a city, the city begins to grow along the bypass, and the growth will continue until the bypass can no longer function as a bypass. This may be attributed to the lack of available funds for urban road development local municipalities have to rely on national roads. Instead of constructing a bypass, another solution to aid traffic congestion is to control access within urban areas. NHA intends to mount the carriageway and provide service road to segregate local traffic from National Highways. 2-10

54 2.2.2 Road Transport (1) Passenger and Freight Transport Volumes During the 1990s, transport volumes by road grew at 5% per year for passengers and 12% per year for freight in terms of passenger-km and ton-km, respectively. The growth rate for freight transport was high in the early 1990 s as shown in Figure The figure clearly illustrates that road transport is the dominant mode of inland transport. Roads carry 89% of passenger transport and 96% of freight transport Billion Passenger Km Billion Ton Km Road Rail Road Rail Source: Economic Survey Figure Past Trend in Freight and Passenger Transport (2) Motor Vehicles The number of registered motor vehicles has been gradually increasing (recently at an annual rate of 4.3%), and is projected to reached 5.4 million in 2004/05 as shown in Figure Half of the registered motor vehicles are motorcycles and rickshaws, and their proportion has been slightly increasing. Million Vehicles Motor vehicles (excluding motorcycle and rickshaw) Motorcycle and Rickshaw Source: Economic Survey Figure Past Trend in the Number of Registered Vehicles 2-11

55 The share of cars has increased from 21% in 1995/96 to 37%, while the percentage of trucks has decreased from 48% to 37% as shown in Figure NTRC Survey, 1995/96 Others 1.6% Car Articulated Truck PTPS Survey, 2005 Agriculture Tractor 4.9% 1.9% 21.1% 3 or more Axle Rigid Truck 7.6% Car Truck 47.6% 12.4% Minibus 2-Axle Rigid Truck 15.2% 37.0% 12.2% Pickup Truck 9.1% 15.0% 5.1% Large Bus Pickup Truck Large Bus Minibus Note: 1) Car includes Car/Jeep/Taxi/Pickup (passenger)/ 4WD. 2) Wagon is renamed as Minibus Source: NTRC, JICA Study Team Figure Vehicle Composition Meanwhile, trucks still obstruct the smooth passage of cars on many National Highways, due to the slow speeds of trucks. Typical trucks run at speeds of only 40 50km/hr under free traffic flow situations. (3) Traffic Volume by Road Section The road section between Rawalpind and Lahore along N-5 has the heaviest traffic in Pakistan as far as inter-city transport is concerned. According to the PTPS Traffic Survey, the traffic volume between Lahore and Gujranwala was the highest at 22,760 vehicles a day, followed by the Gujranwala to Gujrat section at 19,900. As a whole, traffic volumes on N-5 rage from 7,000 to 20,000 vehicles, while other national highways have smaller traffic volumes ranging from 1,000 to 4,000, except for some sections as shown in Table The table indicates the ratio of traffic volume in the PTPS Traffic Survey (2005) to that of the NTRC Survey (1995/96). The ratio of about means that the annual growth rate was %, which is similar to the change in other transport indicators. Traffic volumes decrease at several sections because of the opening of bypasses and alternative routes. Traffic volumes on provincial roads were very small at the survey sites of the PTPS Traffic Survey. Note that this analysis is for inter-city transport. Traffic volumes are much higher within large cities; and where bypasses are not provided, such cities are the bottlenecks of the national transport system. 9.3% 2-12

56 Table Traffic Volume Data from the PTPS Traffic Survey National Highway Code PTPS Traffic Inrease Composition (%) Road Section #site volume 2005/1995 Car Bus Truck N-5 Peshawar-Rawalpindi , Rawalpindi-Lahore , Lahore-Multan 272 8, Multan-Sukkur 315 6, Sukkur-Hyderabad 345 7,332 N.A N-25 Hub-Khuzdar 486 1, Khuzdar-Quetta 436 3, N-35 Hassanabdal-Abbotabad 103 8, N-40 Lakpass-Noshki N-50 D.I.Khan-Zhob N-65 Jacobabad-Sibi 412 2, N-70 D.G.Khan-Loralai 411 1, N-55 Peshawar-D.G.Khan 197 7, D.G.Khan-Jacobabad 313 1, Jacobabad-Hyderabad 343 1, Source: PTPS Traffic Survey The volume of traffic on motorways is relatively small except for the bypass sections in Lahore and Faisalabad as shown in Figure The average traffic volume is less than 1,000 vehicles along most sections. vehicles/day 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Islamabad-Chakri Chakri-Balkasar Balkasar-Kallarkahar Kallarkahar-Lilla Lilla-Bhera Bhera-Salam Chowk Salam Chowk-Kot Monim Koto Monim-Pindi Phattan Pindi Bhattan-Sehikhu Pura Seikhu Pura-Lahore Pindi Bhattian-Sahiwala Sahiwala-Faisalabad Note: Traffic volume recorded at computerized toll gate only Source: NHA Figure Daily Traffic Volume of Motorway (July, 2004) 2-13

57 (4) Freight Transport According to PTPS Traffic Survey, the major commodities in terms of tons carried by trucks are: 1) ballast, gravel, stone; 2) cement; 3) fruit; 4) fertilizer; and 5) wheat as shown Figure In ton-km, the transport volume of fruits was the highest among all commodities. Ballast, gravel, stone Cement Fruit Fertilizer Wheat Bricks/firebricks Diesel Genaral merchandise Flour/biscuit Sand Fruit Cement Fertilizer Wheat Ballast, gravel, stone General merchandise Diesel Paddy and Rice Potatoes and Onion Flour '000 Tons In Order of Tons Note: The volumes in ton-km were calculated by a distance matrix. Source: PTPS Traffic Survey Million Ton-Kms In Order of Ton-km Figure Top 10 Commodities Carried by Truck Fruits are perishable goods and are desirable not to be carried for a long distance without temperature control. Figure illustrates the transport distance of perishable goods such as vegetables, fruit, meat, eggs, fishes, milk, etc. As can be seen in the figure, not a few perishable goods are transported for a long distance. However, the number of refrigerated vehicles is small in Pakistan. As the temperature control transport system is not established in the domestic market, the country looses opportunities to export or import fresh foods Average=423km % <50 <100 <150 <200 <250 <300 <350 <400 <450 <500 <550 <600 <650 <700 <750 <800 <850 <900 <950 <1,000 <1,050 <1,100 <1,150 <1,200 <1,250 <1,300 <1,350 <1,400 <1,450 <1,500 <1,550 Transport Distance (km) Figure Transport Distance of Perishable Goods Note: The commodity codes of perishable goods are 155, 165, 180, and 185 (Refer Annex-A). Source: PTPS Traffic Survey, JICA Study Team 2-14

58 (5) Road Safety Table below summarizes the reported accidents obtained by the NTRC. The reported accident data for 2001 shows 4,527 fatal accidents and 6,060 non-fatal accidents resulting in 5,421 fatalities and 12,942 injuries. Table Accident Statistics Year Fatal Non-Fatal Others Total Killed Injured Total ,383 5,369 2,938 12,690 5,301 11,697 16, ,407 5,249 2,737 12,393 5,141 11,229 16, ,620 4, ,355 4,196 9,817 14, ,637 5, ,721 5,371 11,797 17, ,629 6, ,152 5,627 13,479 19, ,527 6, ,925 5,421 12,942 18,363 Source: Accident Statistics ( ), NTRC While the road safety study conducted by the NHA in estimated 7,000 fatalities, 140,000 injuries and 1,400,000 property damages based on sample surveys carried out in four provinces, a recent study by the ADB indicated that the road traffic accidents involve over 10,000 fatalities per year (over 30 per 10,000 vehicles) and 150,000 injuries. There are high levels compared with Southeast Asia, although better than those in India and Bangladesh. Traffic accidents are also recorded by the Federal Bureau of Statistics and they maintain records going back over 20 years. Despite a doubling of vehicle numbers, the number of fatal accidents and the number of fatalities remains the same over a 20-year period. This implies that the traffic accident statistics are not reliable in Pakistan. Regardless of this, according to the statistics, about 5,000 people are killed annually on the roads compared with 3,500 in the UK, however the number of vehicles in the UK is six times more than in Pakistan. 25,000 20,000 Injured Killed Number of Casualties 15,000 10,000 5, Year Figure Number of Casualties Traffic accidents are reported in the newspapers based on police reports. These are shown below for the previous 5 years. The location of the various reported accidents is shown on the map. There was a total of 133 incidents reported between 23rd October 2000 and 6th 2-15

59 August Some of these were single vehicles while others involved two or more vehicles. 120 Accidents Reported In Newspapers 60 Accidents Accidents Reported in Press Years Number of accidents bus wagon coach pickup truck jeep car van motorcycle Fatalities Fatalities Average Fatalities/Accident Fatalities / Accident 0 bus wagon coach pickup truck jeep Vehicles car van motorcycle 0 bus wagon coach pickup truck jeep Vehicles car van motorcycle Source: JICA Study Team Figure Numbers of Accidents reported in Newspapers The figure cannot be taken as absolute, as not all accidents are reported, however they do give an indication of the severity and incidence of accidents. Passenger buses are involved in far more accidents than other vehicles. The level of fatalities in heavier vehicles, such as buses, trucks and wagons tends to be the same, presumably as it is the passengers in the front part of the vehicle who are most at risk. There are far more passengers injured in bus accidents than in other vehicles. Most reported motorcycle accidents are fatalities, probably because injuries are not reported. The conclusion is that the passenger groups most at risk of death or injury are bus passengers. Certain individual accidents stand out in their severity. In 2005 a leased passenger bus carrying a school outing crashed on the M-2 near the salt range causing 19 fatalities and 35 injured. No other vehicle was involved. The incident was attributed to poor vehicle maintenance and driver incompetence. Also in 2005 a passenger bus ran into the rear of a stationary gasoline tanker, resulting in 31 deaths and 12 injured. 2-16

60 (6) Overloading Overloading by trucks is one of the most typical phenomena in the transport sector in Pakistan. It is commonly observed that 2-axle trucks, having a high vertical limit on the rear carry hundreds of heavy bags (40-100kg per bag) to the extents of the dimensional limit (not tonnage limit). An Axle Load Study of the National Highways by the NTRC in 1995 has shown that 43% of rear axle loads exceed the 12 tonnes (the legal axle-load limit mandated by the Road Safety Act 2000). Two-axle trucks contribute the most to overloading, which is increasing at about 2.6% annually. Although the proportion of two-axle trucks in the fleet is declining, they still account for over 50% of truck traffic. NHA calculated an average value of Equivalent Standard Axles (ESAs) for the various axle configurations of commercial vehicles in accordance with the AASHTO Pavement Design Guide 86, and these are compared with the axle load controlled trucks in the USA as shown in Table This shows that in the case of a 2-axle truck, a Pakistan truck is equivalent to 22 USA trucks in terms of the effect on pavement structure. It is noted that the values shown below are for the average 2-axle truck. The maximum for 2-axle trucks was 13.09, 2.8 times the average. Table Average ESAs of Trucks Truck Truck Factor Truck Factor Axle Configuration Type Pakistan USA 2-Axle Both Single Axles Axle One Single & One Tandem Axle Axle All Single Axles Axle Two Single & One Tandem Axle Axle One Single & Two Tandem Axles Axle One Single, One Tandem & One Tridem Axle Source: Axle Load Study on National Highway, NTRC, 1995 and NHA Overloaded Truck The local truck manufacturers produce wider and more elevated truck bodies to enable truck owners to overload and reduce haulage costs. The tyres of overloaded trucks are also over-inflated resulting in a reduction in the contact areas between the tyre and the road surface. The excessive wheel loads combined with the reduced tyre contact area exert pressures far in excess of the bearing capacity of the pavement. 2-17

61 Allowable Axle Loads The National Highways Safety Ordinance 2000 stipulates maximum axle loads and tyre pressures: Front axle 5 tones Single axle - 12 tones Tandem axle 22 tones Tridem axle 33 tones Tyre pressure rear axle 120 psi Tyre pressure front axle 100 psi These regulations were passed in 2000 but an agreement was reached between NHA and the transport industry to allow some concessions on National Highways but not on motorways. The current situation for the various configurations is shown below. Truck Type Allowed on National Highways Concession Granted by NHA in 2002 Allowed on Motor Ways 2 AX SINGLE (BEDFORD) AX SINGLE (HINO / NISSAN) AX TANDEM AX SINGLE AX SINGLE TANDEM AX TANDEM SINGLE AX SINGLE AX SINGLE TRIDEM AX TANDEM TANDEM AX SINGLE SINGLE TANDEM AX TANDEM SINGLE SINGLE AX TANDEM TRIDEM AX TANDEM SINGLE TANDEM National Highway Safety Ordinance 2000 is being now amended after the steering committee held in Karachi in August 2005 to provide for the greater punishment of the originator of the overloading. Weigh Stations NHA has 54 weigh stations to enforce the axle load limit mentioned above. Currently, the fine for overloading is about Rs. 100 per ton but it occasionally a driver can not pay a fine of Rs when overloads exceed tons and the weigh station operator will just overlook the fine. It is also reported that the fine may be set by negotiation between operators and drivers. It is observed that weigh stations do not have unloading space for overloads or parking space for overloaded trucks. Weigh Station on the N

62 2.2.3 Administration of Road Sector (1) National Highway Authority (NHA) NHA was established by the National Highway Act of 1991 as a semi-autonomous organization to plan, promote, organize and implement programmes for construction, development, operation, repair and maintenance of national highways and strategic roads especially entrusted by the Federal Government, or by Provincial Governments or other authorities. NHA s organizational set up comprises six core-wings: Motorway, Construction Planning, Operation, Finance and Administration. The organization chart of NHA is shown in Figure NHA is administered by the NHA Executive Board. Members of the Executive Board are: Executive Officer/ Chairman of NHA (Chairman), Member (Finance), Member (Planning) and other the six other members are government official ex officio. National Highway Council National Highway Executive Board Chairman Member (Motorway) Member (Finance) Member (Operations) Member (Planning) Secretary (NHA) Dir. General (Administration) Budget & Accounts Finance Planning Design Procurement & Contract GM (NHIP) GM Construction Operations & Maintenance NHA Regional Offices Personnel Establishment General) Director (Inspection) Monitoring) General Manager (Internal Audit) Public Relations Officer Director Legal Source: NHA Figure Organization of NHA The 2001 amendment removed the Boards power to approve projects more than Rs.50 million. For projects over Rs.100 million the NHA Executive Board is required to make recommendations to the Central Development Working Party (CDWP) and the Executive Committee of the National Economic Council (ECNEC). (2) National Highway Council (NHC) The National Highway Act also established the National Highway Council (NHC) as a decision-making group. The NHC comprises seven members and is responsible for appointing the Chief Executive/Chairman of the NHA who will also become a member of the NHC and act its secretary. The Minister of Communications is the President of the NHC and the remaining members are: the Secretary Finance Division, the Secretary Planning and Development, Secretary MOC, a professional in the field of highway construction and management, a professional in the field of finance and accounting and Chairman of NHA, three departmental secretaries, one highway professional and one finance/accounting professional. The NHC meets once a year. On the recommendation of the NHA Board, the 2-19

63 Minister of Communication can approve any matter falling under the NHC s jurisdiction. The NHC has the power to control, direct and regulate the NHA, to sets policies and guidelines to review projects and approve five-year plans and the annual budget. (3) Communications and Works Departments The organization of the provincial government is similar for the four provinces. The Communications and Works Departments of the Provincial Government (PCWDs) are responsible for construction and maintenance of the provincial roads within their respective provinces. Routine maintenance works for improvement and reparation are executed by contractors through bidding procedures. PCWD is divided into Provincial Circles headed by a Superintendent Engineer and the circles are subdivided into Divisions headed by an Executive engineer. The Divisions are further subdivided into Subdivisions headed by a Subdivision Officer. With the devolution programme, portions of local roads have been transferred from the PCWDs to the newly established district governments. The Works and Services Department (WSD) is one of several departments under the Chief Secretary of the provincial government. Under the Secretary of WSD, there are two sections, one responsible for roads and the other responsible for water supply and buildings. The provincial highway department is responsible for the construction and maintenance of the Provincial Roads. In the NWFP Province, the department is named as the Frontier Highway Authority (FHA). The Managing Director of FHA coordinates with the District Coordination Officer of each district government for the construction of District Roads. After devolution, part of the Provincial Road network will be transferred to the City/District Governments, while the provincial highway departments will still be providing the employees and funds. (4) Transport Authorities The road transport services are regulated by the provincial governments through the Provincial Transport Departments. The Provincial Transport Authorities(PTAs) and Regional Transport Authorities(RTAs) plan, allocate routes, regulate, enforce and collect revenues and assert day-to-day control over inter- and intra- city passenger transport services, which are dominated by the private sector. Road related public revenue collection is about Rs.32.5 billion per year (52% of these are from a surcharge on POL products). Total public expenditure on roads is over Rs.20 billion per year, with 65% on national roads. The road sector has been the main recipient of public sector funding and about 69% of the total PSDP allocation for the transport sector is earmarked for the road sector. However, road maintenance expenditure over the year has only been about 20% to 30% of the required expenditure. (5) National Highway and Motorway Police (NH&MP) The Motorway Police were established in 1997 as the traffic police for enforcement of traffic rule and traffic safety on the M-2. The GOP enacted in 2000 the National highway Safety Ordinance which provided the legal basis for establishing the National Highway and Motorway Police (NH & MP) Force under the MOC. One of the important tasks of the NH&MP is to enforce axle load control. The National Highway Safety Ordinance 2000 established the legal framework for overload control as follows: The National Highway and Motorway Police are empowered to enforce axle overload control. The driver of an overloaded vehicle is directed to convey the vehicle to the nearest place where facilities exist for the storage of goods, and not to remove the vehicle or trailer from that place until the laden weight or axle weight has been reduced. 2-20

64 Whoever drives a transport vehicle or causes or allows a transport vehicle to be driven on a National highway carrying in excess of 15 % of the permissible load for a goods vehicle shall be punished with imprisonment. A police officer shall direct the unloading of the excessive goods before allowing the vehicle to proceed. It is noted that the NH&MP does not have retention powers and tends to avoid involvement in enforcement matters in which retention and/or legal proceedings are likely to be involved. The enforcement is therefore limited to implementation of a fine regime only and the quick disposal of violators Financial Situation (1) Financial Resources for Roads The agency for the road sector is the NHA, which is funded in the following manner. Road Taxes Consultation regarding Finance Donor Agencies Funding from Donor Agencies Road Users Tolls etc. Ministry of Finance Funds for Development Economic Affairs Division (EAD) Funds for Development National Highway Authority (NHA) Sources: Interview with NHA Figure Flow of Funds for the NHA Until 1991, the national highway network was in the hands of the government department known as the National Highway Board. The Board work was funded by a grant from the Pakistan Government. In 1991, the Board became a semi-autonomous body, the National Highway Authority (NHA). The NHA collects tolls from the road users and borrows money or issues bonds after consultation with the Ministry of Communication (MOC). However, in 1991, the government decided for the development of roads should be switched from grants to loans, even though the NHA did not have the revenues to repay these loans. The biggest components of the Road Taxes (refer Figure ) are the surcharges on Petroleum, Oil and Lubricants (POL) from road users. Table shows the trend in the surcharges on POL. Table Trends in Surcharges on POL from Road Users (Unit: Rs. Million) 1990/ / / / / /96 9,670 9,138 8,007 12,956 9,576 12, / / / /2000 Total Average 15,861 17,661 26,128 32, ,458 15,346 Sources: Prepared by JICA Study Team with Data from World Bank From the fiscal year 1990/01 to 1999/2000, the total amount of the surcharges on POL from road users was Rs. 153 billion and the annual road tax revenues amounts to Rs. 15 billion on average. On the other hand, the average annual funding to the NHA from 1990/91 to 1999/2000 amounted to Rs. 9.2 billion, which was 60% of the total road tax. The road taxes 2-21

65 were absorbed in the government s consolidated budget, and the most of the road tax revenues was used for other sectors. Table shows the trend in funding to the NHA. Table Trends in Funding to the NHA (Unit: Rs. Million) Type of Funding 1990/ / / / /95 Loan 250 5,152 9,498 8,084 7,406 Grants for Maintenance for Administration for Others Total 537 5,537 9,924 8,530 7,874 Type of Funding 1995/ / / / /2000 Loan 6,100 7,183 9,952 17,325 16,364 Grants for Maintenance for Administration for Others Total 6,471 7,715 10,572 17,950 17,045 Type of Funding Average 1990/ / / / /04 Loan 8,731 10,312 10,900 15,263 16,243 Grants for Maintenance for Administration for Others Total 9,215 10,816 11,683 16,096 17,103 Source: NHA In order to prevent the road tax from being used for other sectors, segregating the road tax revenue from the general consolidated budget of the government by creating an independent account for road tax should be considered. This segregation would enable the road tax revenue to only be used in the development of the transport sector. It may be controversial to only use all the road tax revenue for the development of the road sector because (1) the road taxes are sometimes levied for the reduction of traffic congestion and environmental protection and (2) the Surcharges on POL may be generated from the petroleum consumption in other sectors. With regards to reason (1), the funds from road taxes may have to be allocated to the development of the railway network for the reduction of traffic congestion and environmental protection. Therefore, it is necessary for the government to clarify its policy of how to use the road tax revenue for the development of the entire transport sector. With regards to reason (2), the petroleum tax revenue can be separated into that received from the transport sector and the received from the non-transport sector. Therefore, only the revenue from the transport sector will be used for the development of the transport sector. According to Table , the Pakistan government funds the NHA mainly with loans. However, as mentioned later, as the revenue collected from the tolls is not sufficient for the loan repayments and interest payments, the NHA has accumulated a massive debt, which amounts to Rs. 103 billion. 2-22

66 (2) Financial Outlook of the NHA The NHA has engaged in commercial activities since 2001 and is now preparing the commercial based financial statements. Based on the draft financial statements (un-audited), the JICA study team has prepared Table showing the financial status of the NHA. Table Financial Status of NHA* (Unit: Million Rs.) FY 1998/ / / / /03 Data Sources (1) Revenues Grants in Aid from Government T Maintenance Grant Establishment Grants Data from Other Grants NHA Grants from Foreign Donors Toll Income** 184 1,022 2,186 2,220 2,570 Financial Others*** Statement (Draft) Total 933 2,061 2,933 3,374 3,996 (2) Expenditures Maintenance & Restoration ,051 2,355 1,406 Financial and Other Charges 28 1, Others 748 2,874 1,913 1, Total 1,397 5,153 3,332 3,929 2,785 (3) Surplus before Depreciation (1)-(2) , ,211 Financial Statement (Draft) (4) Depreciation Charges 771 1,305 1,342 1, Financial Statement (Draft) Surplus (3)-(4) -1,235-4,397-1,740-1, * Since the accounting data of the NHA is premature, the table only shows the trend in the financial status and does NOT show exact figures. ** Costs of operational & mobile workshops are deducted from the gross toll incomes. *** Recovery of disposal of assets is included. Source: Prepared by JICA Study Team with NHA Financial Statement (Draft) and Other Documents from the NHA As the financial statements of the NHA are currently under preparation, Table was prepared from various data sources. According to Table , the NHA continued to run at a loss until the fiscal year 2001/02. Even though the surplus shows a positive figure in the fiscal year 2002/03, this is due to the financial support received from the government. Accordingly, since the NHA does not have enough financial resources for the loan repayments and interest payments, the NHA owed the following loans amounting to Rs. 103 billion at the end of the fiscal year 2002/

67 Table Loans at the End of FY 2002/03 (Unit: Million Rs.) Lenders Details Amounts Government of Pakistan Cash Development Loans from the Government 68,082 Foreign Re-lent Loans IBRD 6,274 OECF 13,688 International Development Association 78 Asian Development Bank 232 Islamic Development Bank 324 Foreign Direct Loans Turk Exim Bank (for work on the M1) 934 Dawwoo (for work on the M2) 13,447 Total 103,061 Source: NHA Financial Statement (Draft) (3) Fund and Expenditure for Development For the construction and improvement of national highways, NHA has received funding from the Government through the Public Sector Development Program (PSDP). However, it is sunderstood that the allocations made available to the NHA always fell short of demand, as illustrated in Figure Demand Allocation Rs. Billion / / / / / / / / / / / / / /05 Source: NHA Figure Demand and Allocation of PSDP (4) Road Maintenance Account (RMA) Toll revenue is the major fund for maintenance of the national highway network. In addition, the Federal Government provides an annual Maintenance Grant to the NHA. The Maintenance Grant amounted to Rs. 825 Million in 2003/04. In 2003/04, the total fund raised for maintenance was Rs. 3,774 million, 78% of which was the revenue generated, the remainder being the maintenance grant from the Federal Government, as shown in Table However, the total fund for maintenance was insufficient to meet the increasing expenditure. 2-24

68 Table Maintenance Fund and Expenditure Fund (Rs. in Million) Source 2001/ / / /05 Total Maintenance Grant , Net Revenue Generated 2, , , , , Total Fund 2, , , , , Expenditure (Rs. in Million) Province 2001/ / / /05 Total Punjab 1, , N.A. 5, Sindh N.A. 1, NWFP , N.A. 1, Balochistan , N.A. 1, Total Expenditure 2, , , N.A. 10, Source: NHA RAMD(Road Asset Management Directorate) In the financial plan for maintenance in 2005/06 (refer to Table ), the required fund is estimated at Rs. 8.9 billion. The estimated fundraising can cover only 66% of the requirement even though there will be an increase in toll revenue due to an increase in the toll rates. The financing for the gap is to be secured from another account, which will be carried over to the next year as a liability. Table NHA Financial Plan for Maintenance in (Rs. in Million) Total Fund Required (based on HDM-IV Analysis) 8,900 Estimated Financial Resources Maintenance Grant 1,200 Revenue to be Generated 4,640 Net Toll Revenue 2,960 Net Revenue from Police Fine (NHA Share) 200 Net Revenue from Weigh Station (NHA Share) 100 Revenue from Regularization of Filling/CNG Stations 150 BOT Concessions for Bus Bays on GT Road 30 Reduction in percentage of Management Contractor like FWO, NLC, etc. 200 Expected Revenue from Increase in Toll Rates to Approved Limit (to be implemented from July 1, 2005) 1,000 Total 5,840 Source: NHA 2-25

69 Road Maintenance Accounts The Road Maintenance Account (RMA) is an NHA fund for road maintenance, established in 2003 based on National Highway Authority Roads Maintenance Account Rules, According to the rules, the revenue of the NHA and the maintenance grants from the government shall be accumulated in the RMA and the funds in the RMA shall be used for maintenance of the roads. The mission of the RMA is to promote efficient road network maintenance, to a standard that road users want and are willing to pay for, by collecting the road tariff and allocating funds to road administrators for sound planning and execution of the works. The RMA can ensure that road users funds are efficiently and effectively spent by the road administrators undertaking the implementation. The revenues that should be transferred into the RMA are: From Road Users Tolls on roads and bridges; road use related fines (e.g., overloading, traffic offence); axle load charges; supplementary heavy vehicle fees; international transit fees; and border fees. From Other Sources Charges for commercial use of right of way; profits on bank deposits and income on investment of moneys in the RMA; annual maintenance grant from the Federal Government; maintenance funds provided by international donor agencies; loans secured to finance any maintenance work shortfall; and endowments and donations for maintenance and road safety from any organization, group or person. The activities eligible expenditure from the Road Maintenance Account are: Maintenance plan (routine and periodic maintenance); Rehabilitation of existing network assets of the National Highway Authority which have acceptable net present value and economic rates of return; geometric improvements of the existing network assets of the National Highway Authority; highway safety improvements; establishment of new toll plazas with automated electronic toll and traffic management systems, access control, and weigh stations; and expenditure related to corridor management. 2-26

70 (5) Financing of Provincial Roads The financial system for the development and maintenance of the Provincial Roads is similar to that of the National Highways. For development works, the provincial highway departments receive an allocation as the PSDP of the provincial governments. For maintenance works, a maintenance grant is provided by the provincial governments. The provincial governments intend to introduce a revenue generation system including toll collection similar to the NHA, to secure a fund for road maintenance. The status of revenue appears to be different for the four provinces. Internal revenue generation for maintenance is minor in the Punjab Province, while, the FHA of the NWFP Province has substantial revenue generation, as shown in Table In , the FHA generated Rs million, which is more than the grant provided by the provincial government. Of the total revenue, toll revenue provided 33%, with the other revenue coming from the contractor s registration fee, the sale of application forms, rental charges for Right of Way, and income from machinery rental charges. Table Financing for Development and Maintenance of Provincial Roads in the NWFP Province For Development (Rs. in million) Year Allocation Expenditure For Maintenance (Rs. in million) Year Maintenance Grant FHA Own Receipt (Toll Revenue) Total (13.443) (45.225) (48.749) (19.270) Source: NWFP Provincial Government 2-27

71 2.2.5 Issues and Problems (1) Incomplete Hierarchy of Road Network Motorways are tolled national highways with controlled access and highspeed free flowing traffic lanes 1. Although the access control policy and the designed speed are different between Motorways and National Highways, the functional difference is not so clear at present because of the role of National Highways. It is expected that Motorways carry interprovincial traffic between major cites at high-speed. On the other hand, National Highways carry a large volume of long-distance traffic because inter-provincial connection is the major role of National Highways. M-2 is a Motorway connecting Rawalpindi and Lahore at a distance of 367km, but traffic demand for M-2 is small and most drivers between the two cities prefer N-5 that connects the two cities at a shorter distance of 275km. The recent dualization and improvement are levelling up National Highway close to Motorway in terms of road network hierarchy. Meanwhile, development of feeder road network systems that connect National Highways is so insufficient due to lack of adequate investment that the hierarchy system has a gap between National Highway Network and the lower network systems. (2) Insufficient Investment on Provincial Roads and Other Local Roads National Highways form inter-provincial network together with Motorways, and the network connects four provinces along major national transport corridors. However, the National Highway network does not necessarily serve all the territory of Pakistan, because the area of provinces are very large in Pakistan, and the large area in each province, especially in Panjab, are covered by provincial road networks. Provincial roads are the primary feeder roads for National Highway network and the lower system in terms of road hierarchy. Accordingly, priority of investment on provincial roads is lower than that on National Highways. Provincial roads suffer from increasing traffic than National Roads, because of insufficient investment on capacity expansion and lack of maintenance works. (3) Congestion in Urban Area The National Highway Network has many congested sections in cities and towns along the roads, which reduce travel speeds and increase traffic accidents. As a cities and towns grow along arterial roads, a new bypass become an urban road soon after it is opened to the public. Therefore, construction of bypasses tends to be only a short-term countermeasure for congestion. The lack of local funds for urban roads and the absence of road network plans in local municipalities may contribute to this effect. Access control along National Highways is one of the solutions but it tends to divide local communities. Photo: Pedestrians try to cross N-5. 1 Performance Report, NHA 2-28

72 (4) Mix of Traffic (Freight and Passenger) on the National Highway The mix traffic of freight and passenger traffic is another problems, Naturally, trucks need to use National Highways because one of the basic roles of National Highways is to serve as inter-provincial and long-distance routes for freight transportation. However, it is observed that passenger cars cannot travel at the desired speeds even if the volume if the traffic is low due to the presence of slow trucks. (5) Overloading Photos: Cars can not overtake trucks (N-5) This is the aforementioned problem in the transport sector in Pakistan. Vehicle overloading is a major cause of premature pavement deterioration and an impediment to the sustainable development of the highway network. Overloading reduces the economic benefits of road projects and increases maintenance costs. The main adverse effects of overloading are: Excessive axle loads and high tyre pressures lead to premature and rapid deterioration of existing and new roads in the form of cracking, rutting and potholes; Premature damage accelerates and increases the road maintenance budget; Public transport, such as overloaded buses may not be a source of damage to roads, but, together with overloaded commercial vehicles, they are the major safety road hazard and are involved in most accidents; Transport time is lost by trucks being off road for repairs due to overloading. Revenue is lost to the owner from down time and repair costs are borne by them; Marginalization of profitability of the trucking industry due to the overloading fines. (6) Increase in Road Maintenance Work The maintenance burden of the NHA has continued to increase because: A number of highway projects have been carried out without a corresponding increase in the maintenance budget; Several new routes have been federalized. NHA inherited the road network in a dilapidated condition from the provincial governments; Many sections of national highways have been dualized, which has virtually increased the length of the national highway network; Uncontrolled overloading, causing early damage on pavements; Increase in traffic volumes. The NHA receives a maintenance grant from the Federal government, while the provincial highway department receives a maintenance grant from the provincial government. They are supplemented by their own revenue, including toll revenue. However, the secured fund is not sufficient to ensure a stable and secure source of maintenance funding. From an interview with the NHA, it was estimated that the revenues (without grants from the government) 2-29

73 would be able to surpass the maintenance costs in the future. (7) Road Safety Problem It is estimated that approximately 7,000 to 10,000 people die every year as a result of road accidents. The number of fatalities might be even higher because of an unsatisfactory system of reporting and follow-up. Although intensive studies for road safety in Pakistan have been carried out, reliable statistics about traffic accidents is not available. It can be said that there are lots of traffic accidents that are not reported in Pakistan. (8) Summary of Issues The issues, which can be immediately identified from the problems mentioned above, are summarized as follows: To eliminate the bottlenecks in traffic flow along National Highways; To develop the urban road network to avoid unexpected urban growth along bypasses so that National Highways can function in their original role; To replace old truck fleets with new ones that can travel faster; To divert truck routes from National Highways to Motorways; To reduce the number of overloaded trucks; To improve or rehabilitate deteriorated roads to reduce maintenance cost; To check the under-reporting of accidents and ensure a rational and scientific approach is adopted to investigate accidents and take corrective actions accordingly. Other issues are identified through more detailed analysis such as demand-supply analysis, administrative and institutional analysis and financial analysis as explained in the followings Chapters. 2-30

74 2.3 Railway Infrastructure (1) Railway Network The first railway of Pakistan, between Karachi City and Kotri, was opened in At the time of independence, most of the existing network had been constructed. The Pakistan Railways network is comprised of 7,791 route-kilometres; 7,346 km of broad gauge and 445 km of metre gauge. There are 625 stations in the network, 1,043 km of double-track sections (in total) and 285 km of electrified sections. The Main Line (official route name) is connects the following major stations; Karachi, Multan, Lahore, Rawalpindi and Peshawar. The term the main corridor used in this study means the lines including the Main Line and its bypass lines. The existing Pakistan Railways network is shown in Figure Peshawar Attock City Rawalpindi Lala Musa Faisalabad Lahore Kuh-i Taftan Quetta Chaman Kolpur Sibi Shorkot Cant Kot Addu Multan D.G.Khan Khanewal Bahawalnagar Lodhran Samasata Jacobabad Khanpur Rohri Khokhropar Legend Main Line Other Lines Karachi Kotri Hyderabad Badin Source: JICA Study Team Figure Pakistan Railway Network 2-31

75 (2) Railway Tracks The railway network in Pakistan is comprised of 7,791 route-kilometres; 7,346 km of broad gauge and 445 km of metre gauge (See Table 2.3.1). Out of the 7,791 km railway network, double track sections account for 1,043 km in total, and electrified sections for 285 km. The Pakistan Railways have not constructed any new routes since 1982, and have instead abolished light-traffic branch lines since the 1980 s. Year Table Route and Track Length by Gauge Route Kilometers Broad Meter Gauge Gauge Total Track Kilometers Broad Meter Gauge Gauge Total average 7, , , , average 7, , , , /05 7, , , , Source: Pakistan Railways Year Book 2004/05 The network is ranked into six classifications of lines based on their role and level of importance, as shown in Table Table Classification of the Lines in 2004/05 Classification Route-kilometres Remarks Primary A 2,124 km Primary B 2,622 km Secondary 1,185 km Tertiary 1,416 km Metre Gauge 439 km Narrow Gauge --- At present abolished Source : Pakistan Railways The Main Line of Karachi Lahore Rawalpindi Peshawar (1,685km) and its bypass lines through Faisalabad mostly corresponds to Primary A. Of the 439 km of metre gauge lines, 126 km is being converted into broad gauge to connect to the line in India which has already been converted into broad gauge. No narrow gauge lines are currently in service, but tracks for these lines remain. In the Karachi - Peshawar section and the bypass lines through Faisalabad and some other sections, the allowable maximum axle load is ton, which is the standard for the largest 3,000 HP locomotives and new high performance freight wagons with full loading. The allowable axle load for other lines is ton or less. The gradient of each line is not steep except for a few sections. Along the main corridor, the maximum gradient is less than 6.7/1000 except for the 10/1000 gradient between Rawalpindi and Peshawar, which is suitable for massive freight transport. There is an exceptionally steep gradient of 40/1000 between Sibi and Chaman. In the section of Karachi Lala Musa and the bypass lines through Faisalabad, the maximum permissible speed is actually 95 to 105 km/hr. In other lines, it is lower: generally from 50 to 75 km/hr. Track strengthening and rehabilitation works are underway based on the plan for Rehabilitation and Improvement of Tracks ( ). The works are currently half finished. The progress of the track strengthening and rehabilitation work is shown in Table

76 Table Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Progress of Track Strengthening and Rehabilitation Work Rail Sleepers Ballast thickness Section Track km Not Not Improved Improved Improved Not Improved Improved Improved Primary - A 3,031 km 2,634 (87%) 397 (13%) 2,625 (87%) 406 (13%) 657 (22%) 2,374 (78%) Primary - B 2,674 km 1,365 (51%) 1,309 (49%) 758 (28%) 1,916 (72%) 79 (3%) 2,595 (97%) Secondary 1,185 km 690 (58%) 495 (42%) 87 (7%) 1,098 (93%) 12 (1%) 1,173 (99%) Tertiary 1,500 km 1,239 (83%) 261 (17%) 783 (52%) 717 (48%) 106 (7%) 1,394 (93%) Karachi-Lahore 2,264 km 2,191 (97%) 73 (3%) 2,196 (97%) 68 (3%) 522 (23%) 1,742 (77%) Source: Pakistan Railways The purpose of track strengthening and rehabilitation work is to enhance operational speeds and minimize maintenance costs. The structural standard for track strengthening of Primary-A and Primary-B sections is shown below (Table 2.3.4). Table Structural Standard Classifications Primary-A Primary-B Rail UIC54/100RE 100RE/90R Sleepers 1,640 sleepers/km 1,562 sleepers/km Ballast thickness 30cm 25cm Speed 120km/hr 100km/hr Source: Pakistan Railways (3) Signalling System The existing interlocking systems on the Pakistan Railways are classified into four types: one relay interlocking system and three mechanical interlocking systems. The existing interlocking systems are listed in Table Table Existing Interlocking Systems Type Speed Locking Stations Year of Installation Mechanical Signalling Non-interlocked 15 km/hr Standard-I 50 km/hr Indirect (key)locking Standard-II 70 km/hr Indirect (key)locking Standard-III 120 km/hr Indirect (key)locking Electrical Signalling All Relay Interlocking Source : Pakistan Railways The existing block systems are broadly classified into the following: Absolute block system (seven types) Automatic block system Automatic block system with CTC (Centralized Traffic Control) Classified block systems are listed in Table

77 Table Existing Block System System Stations Year of Installation Morse Telegraphy (Paper Line Clear) Neal s Token Insts (Single Line) Siemen s Tokenless (Single Line) /93 Style U Tokenless (Single Line) Style N Tokenless (Single Line) Tyre s Block Insts (Double Line) Carson Block Insts (Double Line) Automatic Block km 1970/97 Automatic Block with CTC 9 34km 1962/84 Source : Pakistan Railways The automatic block system is only installed in a limited section of the 188km between Karachi and Hyderabad. Most of the signals, other than the automatic block system, are semaphores. (4) Telecommunication System At present, the Pakistan Railways are equipped with a telecommunication systems at present. The train radio system on the main corridor is operational, but the technology is obsolete, as is that of the signalling system. (5) Double Tracks Double track sections are only 1,043 km out of a total out of 7,791 route-kilometres. Most of the double track sections are located in the most critical section (Karachi City - Lahore, 1,218 km). The double-tracking works between Lodhran and Khanewal via Multan are under construction, and due for completion in 2005/06. Photo: Double tracking work between Multan and Khanewal (6) Structure Photo: Single track section remained between Karachi and land for double track between Khanewal and Raiwind Most of tracks along the Pakistan Railways are laid on embankment. There are a total of 14,570 bridges of which 22 bridges are recognized as large scale bridges. Almost all of these bridges were constructed more than 100 years ago. They require rehabilitation or replacement work. (7) Electrification The electrified section is limited to between Kanewal and Lahore (285 km) and some branches. These were electrified 35 years ago, and no extensions have been carried out since that time. Presently, the electrification facilities are aging and require rehabilitation. 2-34

78 2.3.2 Rolling Stock (1) Locomotives The Pakistan Railways has 520 diesel locomotives, 23 electric locomotives and 14 steam locomotives including those for metre gauge. The steam locomotives are mostly out of daily services. The locomotives are mainly of 3000 HP class. The number of locomotives classified by performance is; 115 of 3,000 HP, 276 of 2,000 HP (including 2,400 HP). Most of the locomotives are aging and decrepit, and some of them are out of services. Table shows the number of over-aged locomotives over 20 years old. The reliable locomotives under 20 years old or ones recently rehabilitated are listed in Table CLASS Table Performance Year Built Number of Over-aged Locomotives over 20 years old Number on Books GMU-30 3,000 HP ARU ARPW GEU ,000 HP HAU-20R HPU ALU-20R GEU GMCU-15 1,500 HP GMU ALU-12 1,200 HP HAU-10 1,000 HP ALU HP Total Source : Pakistan Railways Number to be Remark Condemned 36 Locos have been planned for rehabilitation 32 Locos have been planned fir recommissioning 23 Locos have been planned for recommissioning Table Locomotives under 20 years old or Recently Rehabilitated Name Performance Number on Book Remarks HGMU-30 3,000 HP 28 HBU-20 2,000 HP 60 PHA-20 2,000 HP 23 AGE-30 3,000 HP 30 GRU-30 3,000 HP 48 Rehabilitated recently RGE-20 2,000 HP 27 Rehabilitated recently RGE-24 2,400 HP 21 Rehabilitated recently DPU-30 3,000 HP 17 DPU-20 2,000 HP 7 Total 261 Source : Pakistan Railways Electric locomotives were introduced 35 years ago when the electrification works were completed, however they are already aging. The number of electric locomotives has not increased since their introduction in 1970 because there has been no extension of the electrified section of the railway. Due to the lack of sound electric locomotives, most trains are hauled by diesel locomotives even in the electrified section today. 2-35

79 Photo: DHL running under wire new and powerful GM-made 3,000 HP-DHL, purchased with Japanese ODA between Lahore and Khanewal Photo: Lahore DEL Depot GM-made 3,000 HP-DHL (2) Passenger Coaches The total number of passenger coaches on the Pakistan Railways was 1,865 at the end of 2004/05. This number includes 1,604 vehicles for conveyance of passengers and 214 vehicles for conveyance of luggage, parcels, mail, automobiles and horses, etc. This does not include departmental vehicles and 273 coach brake-vans. (3) Freight wagons The number of freight wagons on the Pakistan Railways was 21,556 at the end of 2004/05 comprising 10,491 covered wagons, 5,526 opens wagons and 5,216 special type wagons (for carriage of liquids, explosives, machinery, live-stock, timber and rails, etc.). This does not include 629 departmental wagons and 328 brake-vans. A total of 17,863 of those wagons are 4-wheelers, and the rest are mostly 8-wheelers. Most of the wagons are out of date and of low performance. They are only equipped with vacuum brake systems. Some wagons, mainly the 4-wheelers, are restrained to operation speeds less than 55 km/hr because of their low stability. The only high performance wagons that are currently useful are 130 flat wagons that were purchased from China and are used for container transport. The Pakistan Railways have a project to introduce 1,300 high performance wagons including 80 brake vans between 2002/03 to 2005/06. The introduction of the 130 flat wagons enabled the Pakistan Railways to start high speed container transport services between Karachi/Qasim ports and Lahore/ Faisalabad dry ports with six pairs of trains per week. The actual transport time from Karachi to Lahore for the new high performance wagons is 26 hours, whereas that of conventional wagons is about 60 hours because of not only a long running time but also a long waiting time. Thus the existing conventional wagons take 2.5 times longer than locomotives. (4) Manufacturing and Services The Pakistan Railways undertake various non-core activities such as manufacturer, contractor, consultant as well as hospital and school services and other services. These activities are a relic of the past when the railway was the largest and most advanced enterprise and the primary land transport means. These activities are managed together with the railway under the unified regulations, even though they are not directly related to daily management, operation and maintenance of the railway. Their customer base is narrow and almost exclusively Pakistan Railways. 2-36

80 2.3.3 Achievements of the Previous Master Plan, JICA Study 1995 The previous JICA study, The Study on National Transport Plan in the Islamic Republic of Pakistan, February 1995, predicted that the traffic demand for the railway would be 36,089 million passenger-km and 21,131 million ton-km in 2005/06, surmising the passenger traffic would keep its share and freight traffic would satisfy its share of an economically desirable modal split. However, the actual traffic demand in 2004/05 was 24,237 million passenger-kilometres and 5,013 million ton-kilometres, which is contrary to the predictions in the study. The proposed railway project in the Master Plan consists of 17 projects of a total estimated cost of Rs. 146 billion. Each item and its proposed achievements are summarized in Table As shown the table, there has been little progress on projects between 1995/96 and 2004/05. In particular, the improvement of the signalling system has been neglected, even though serious accidents were caused by problems in signalling system at Sangi in 1990 and at Ghotki in As for rolling stock, not only locomotives but also passenger coaches and freight wagons have not been procured to the required scale. Above all, the lack of wagons required to meet the current customer needs has caused the catastrophic fall in its share of the land transport market Double-tracking works for the remaining single track section on the corridor between Karachi and Lahore was executed only partially, and a section of 245 km (Khanewal - Raiwind) remains to be completed. Since the 1970s, the road sector has been made a priority for investment in the transport sector and investment in the railway sector has been restrained. Therefore, the railway infrastructure and rolling stock has become aged and decrepit. In response, the government adopted the policy to increase investment in the railway sector in the eighth Five Year Plan (1993/ /98) and allocated a budget. However, the government could not execute the budget for the railway due to the fragile national economic situation. The largest project implemented in this period was the purchase of thirty 3,000 HP diesel locomotives. This project was funded by OECF (in present, JBIC: Japan Bank for International Cooperation). In July of 1997, in order to implement a radical reform of the Pakistan Railways, which were in a critical situation, the government decided to privatise the Pakistan Railways with the assistance of the World Bank. The Pakistan Railways considered themselves to be self-sufficient without the government support and attempted to reduce the government support in advance. Therefore, a backlog of investment in replacement, rehabilitation and daily maintenance were further amplified. In the beginning of the year 2000, the government decided to postpone the privatisation. At the same time, the government approved to the execution of the Emergency Repair Plan (ERP) to the scale of Rs billion thereby promoting the rehabilitation and improvement of infrastructure and rolling stock. Consequently, the Pakistan Railways commenced work on backlogged projects such as the purchase of diesel locomotives, coaches and high-performance wagons, track strengthening and rehabilitation work on main lines and double-tracking work in the section of Lodhran - Multan - Kahnewal. However, the project for the improvement of the signalling system has been postponed so far. The above investment projects for the railways were listed in the Ten Year Plan (2001/ /11) and are taken over in the Medium Term Development Framework (MTDF)

81 No. Table Proposed railway project for the Master Plan in 1995 Projects 1 Automatic block signalling Karachi - Lahore Lahore - Rawalpindi 2 Electric/Relay interlocking Karachi - Lahore 3 Tokenless block signalling and colour light signals Jacobabad - Quetta Kotri - Habib Kot Chak Jhumra - Lala Musa Attock City - Sher Shah Wazirabad - Sialkot Estimated Cost Achievement until 2004/05 (Rs. Million) 2,220 No progress 1, ,340 No progress 1, No progress 4 Centralised traffic control system 1,100 No progress 5 Track renewal Rail Sleeper 7,120 6, Partial progress 6 Electrification Samasata - Khanewal Kiamari - Samasata 17,420 1,170 16,250 No progress 7 Double tracking Lodhran - Sher Shah Multan - Khanewal - Raiwind Shahdara Bagh - Rawalpindi Shahdara Bagh - Faisalabad 7, ,950 2,820 1,270 Partial progress Under construction Under construction No progress No progress No progress 8 Upgrading KYC - LLM section 5,500 Partial progress No progress 9 Electric locomotives Procurement Revamping 10 Diesel locomotives Procurement (3,000HP, 2000HP) Rehabilitation Traction motor renewal 4,350 3,300 1,050 43,800 40,300 3, Partial progress 30xAGE-30, 12xDPU-30, 7xDPU x2,000HPClass Progress 11 Procurement of wagon movers 4, Procurement of Wagons 13,000 Partial progress 130 flat wagons out of 1,300 projected 13 Replacement of coaches 13,700 Partial progress 108 new coaches out of 175 projected 14 Improvement of rolling stock Air brake Roller bearing Air conditioner 15 Improvement of container traffic Karachi Dry Port Lahore Dry Port Other dry ports 16 Information system and communi- cation system Management information system Seat reservation system Communication system 3,000 1,000 1,000 1,000 2, , , ,500 Progress Partial progress Partial progress 17 Miscellaneous and minor projects 13,330 Total 145,600 Source: The Study on National Transport Plan in the Islamic Republic of Pakistan, February

82 2.3.4 Railway Transport (1) Passenger Transport a) Past and Present Situation As shown in the Table , the number of railway passengers began to decrease due to motorization at the end of the 1970s and reached its lowest level in 1998/99. Since hten the number of passengers has increased and is on track to recover. The number of passengers was 67.5 million in 1999/2000 and 78.1 million in 2004/05, an increase of 16% over the last five years. Passenger-km was 18.5 billion in 1999/2000 and 24.2 billion in 2004/05, an increase of 31% over the last five years. The Pakistan Railways specialize in express services for middle/long distance intercity passenger transport. Year Table No. of Passengers (million) Railway Passenger Data Total Passenger Kilometres (million) Average No. of Kilometres Travelled per Passenger Average Revenue per Passenger (Rs.) Average Rate Charged per Passenger per Kilometre (in Paisa) average , average , average , average , average , average , average , average , / , / , / , / , / , / , / , / , / , / , / , / , / , / , / , , Note : Excludes differential on government traffic and Public Service Obligation Source : P.R. Yearbook The average distance travelled has been increasing, and at present exceeds 300 km as shown in Figure This indicates that short distance travel has shifted from railway to road transport, and the role of railway is specialized in middle/long distance travel. In current years, the degree of change tends to be slow. 2-39

83 km Source: PR, JICA Study Team Figure Change in Average Distance Travelled In 2004/05, the overall average transport density was 8,500 passengers per day. In the sections where passenger trains are running everyday, the average transport density increases to 10,600 passengers per day. In the most congested section, Karachi - Lodhran, 18 to 21 pairs of passenger trains are operated in one day. These trains consist of 10 to 20 coaches. The daily operation volume of passenger trains/coaches is shown in Figure (1) Number of Trains (2) Number of Coaches Peshawar Rawalpindi Peshawar Rawalpindi Mianwali Lala Musa Sialkot Sargodha Gujranwala Mianwali Lala Musa Sialkot Sargodha Gujranwala Faisalabad Lahore Faisalabad Lahore Quetta Sibi Multan Samasata Quetta Sibi Multan Samasata Jacobabad Jacobabad Larkana Rohri Larkana Rohri Karachi Hyderabad trains/day (Total of both direction) Karachi Source: Elaborated by JICA Study Team based on Operation Time Table Figure Hyderabad Daily Operation of Passenger Trains coaches/day (Total of both direction) b) Rate Structure Currently, passenger services are classified into seven classes according to the quality of service and coaching vehicles. Air-conditioned Sleeper Air-conditioned Sitter 2-40

84 Air-conditioned Lower Special Air-conditioned Lower First Class Economy Class Second Class Table shows the distribution of passengers by the classes. For a long time, 96% to 97% of passengers have used the lower classes (economy class and second class). The air-conditioned lower class was started in 2004/05 with the aim of the improving passenger services. Now second class is only offered only for local trains. Table Pakistan Railways: Classification of Passenger Services (Thousand) Air-Conditioned Air- Class First Class Economy Second Class Conditioned Total Sleeper Class Class Sleeper Sitter Lower Year No. % No. % No. % No. % No. % No. % No. 1995/ , , / , , , , / , , , , / , , , , / , , , , / , , , , / , , , , / , , , , / , , , , / , ,179 Source: Pakistan.Railways. Yearbook Table shows the passenger fares for the Pakistan Railways. Passenger fares are classified by the classes and distance zones. The air-conditioned lower special class is only provided in the section between Karachi and Lahore. The fare for this class is set according to the section. Table shows the fare of air-conditioned lower special in comparison to other classes. Table Passenger Fares Class Fare (Rs.) Minimum 100 km 500 km Air-conditioned Sleeper ,160 Air-conditioned Sitter Air-conditioned Lower First Class Sleeper Economy Class Second class Source: Pakistan Railways Table Fare for the Class of Air-conditioned lower special class Unit: Rs. Section Air-conditioned Air-conditioned Lower Special Sleeper Economy Lahore - Karachi 1,280 1, Lahore - Hyderabad 1,090 1, Lahore - Multan Source: Pakistan Railways 2-41

85 (2) Freight Transport a) Past Trend The change in freight traffic is shown in Table The total number of tons carried and ton-km have been on a downward trend since and respectively, and in these years, are slightly in uptrend. Table Pakistan Railways: Freight Data Year Tons carried Ton-kilometres Average Kilometres (Thousand) (Million) Carried by a Ton average 9,244 4, average 11,703 5, average 14,156 7, average 14,619 7, average 12,715 7, average 13,367 8, average 11,185 7, average 10,960 7, /91 7,717 5, /92 7,560 5, /93 7,769 6, /94 8,036 5, /95 7,356 5, /96 6,854 5, /97 6,380 4, /98 5,977 4, /99 5,448 3, /00 4,770 3, /01 5,894 4,519, /02 5,866 4, /03 6,180 4, /04 6,140 4, /05 6,410 5, Source: P.R. Yearbook. b) Commodities Major commodities handled by the Pakistan Railways are: 1) petroleum and other non-dangerous hydrocarbon oils (18.1%), 2) chemical manures (9.9%) and 3) railway material and stores (17.4%). The volume of each commodity carried in the fiscal year 2003/04 is shown in Table Change of transport volume of main commodities in recent 5 years is shown Table

86 Name of commodities Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Table Commodity Volume Carried Freight Carried (Tonnes) Tonne Kilometres Kilometres of (km) (Tonnes-km) Iron and Steel Division "A" includes angle, axles, 8 sheets, girders etc., 6, Sugar 72 56, Paddy and Rice 41 32, Cement 51 39, Oil Division "D" includes vacuum refined edible oil 40 31, Gypsum 23 17, Oil Seeds , Petroleum and other hydrocarbon oils non-dangerous 1,111 i.e., having flashing point at above 76 Fahr. 867, Coal and Coke for the Public , Chemical manures (Fertilizers) , Fire wood 64 49, Ballast and Stone 25 19, Machinery, other than electrical 4 2, Other grains and pulses 4 2, Sugarcane 2 1, Timber Live-stock Salt , Miscellaneous 2,069 1,686, Total 4,820 3,767, Departmental Commodities Coal, Coke and Patent fuel for Railways (including 253 H.S.D. and furnace oil) 195, Railway Material and Stores 1, , Total 1,320 1,029, G-Total 6,140 4,796, Source: PR Table Change in Transport Volume for Main Commodities Ton-Km of Commodity (Thousand) Name of commodity Ratio of 2000/ / / / /2000 Sugar 10,530 2, , Paddy and Rice 13,204 16,977 37,098 32, Ballast and Stone 4,334 3,901 8,235 19, Coal and Coke for the Public 104, , , , Salt 30,321 33,353 32,802 36, Iron and Steel 10,930 2,186 6,558 6, Petroleum and other hydrocarbon oils non-dangerous 1,990,675 2,064,518 1,755, , Cement 138,280 66,374 68,586 39, Gypsum 75,157 71, , Wheat 71, , , Source: Pakistan Railways 2-43

87 c) Rate Structure Table shows the basic rate scale for freight transport on the Pakistan Railways. The freight fare is determined on a commercial basis for each commodity, taking account of the following factors; volume, weight, form (type of packing), method of loading, susceptibility to transport losses. Table Pakistan Railways: Basic Rate Scale Distance (km) Rate (Paisa per tonne per km) km km km km and Above Note: Basis of Rate Scale 100 Source: PR d) Freight Operation There is not currently a fixed operation diagram for freight trains. Freight trains are operated in intervals between the running of passenger trains and are frequently are forced to stop and wait for the passing and exchanging of passenger trains. The Pakistan Railways offers container transport services between Karachi/Qasim ports and dry ports in Lahore, Faisalabad, Rawalpindi, Peshawar and Quetta. Most of the containers transported by railway are handled in the Lahore dry port, which was established in 1973 as the first dry port in Pakistan. The high speed container transport service commenced in 2003/04 with six pairs of trains per week Administration of Railway Sector (1) Pakistan Railways (PR) Pakistan Railways (PR) is a department of the MOR and is governed by the Railway Act of The Railway Board is the decision making organ and the Secretary of the MOR serves as its Chairman. The PR comprises two functional units: the Operation Unit and the Manufacturing and Service Unit each headed by a General Manger who is accountable to the Railway Chairman for the performance of the unit. The Operation Unit overseas train operations and all related functions, i.e. business units for passengers, freight and infrastructure. The Manufacturing and Service Unit is responsible for the management of the Concrete Sleeper Factories, Locomotive and Carriage Factories, Workshops, Hospitals and medical services, Schools and two consulting firms namely Pakistan Railway Advisory and Consultancy Services Ltd, (PRACS) and Railway Constructions Pakistan Ltd. (RAILCOP). PR has seven territorial divisions, at Peshawar, Rawalpindi, Lahore, Multan, Sukker, Karachi and Quetta, and a Mechanical Division, Workshop Division at Moghalpura, and Administrative Division at the Headquarters in Lahore. The territorial and work divisions are each headed by a Divisional Superintendent, reporting to the General Manager (Operations). The Divisional Superintendent is assisted by the Divisional and Assistant Officers of their respective departments, i.e. engineering department (civil, mechanical, electrical, signal and telecommunications), Mechanical, Transportation, Commercial, Accounts and Railway Police. The number of employees of PR is 90,000. An allocation of Rs.62.5 billion has been made for the railway under the PSDP. This includes Rs.21.5 billion for on-going works and Rs.41.0 billion for new projects. The Pakistan Railway network has 625 stations in its system connecting of the major cities in four provinces from North to South and East to West. The section of network Karachi-Lodhran (843 km) and 193 km of other short sections are double tracks, and 286 km from Lahore to Khanewal is electrified. The railway network is also connected to three neighbouring countries, Iran at Kohi Taftan, India at Wagha and Afghanistan at Chaman and 2-44

88 Landi Kotai on the north-western border. (2) Institutional Reform of the Pakistan Railways The PR was organized as a subordinate department of the Ministry of Railways. This form of organization proved increasingly ineffective in coping with competition, as PR s pre-eminent position was increasingly challenged in the post deregulation era. In 1995, the JICA Study on the National Transport Plan in the Islamic Republic of Pakistan recommended the creation of a Pakistan Railway Corporation, similar to PIA, with a Ministerial presentation in the board. The ownership and overall direction of the railway would remain in the public sector, but day-to-day running of the railway would be passed on to commercially oriented managers with clearly defined targets and responsibilities. The study concluded that, ultimately, given the expectation of increased productivity and profitability in the railway sector, such a structure would be suitable for the privatization of the railways, if that was politically desirable. In 1997, the GOP announced its strategy for the privatization of the Pakistan Railways. The strategy is to restructure the PR into three core businesses namely Passengers, Freight and Infrastructure. A new public entity (the Railway Resettlement Agency) will be created to retain all surplus assets and liabilities, including labour, real estate, debts and environmental clean up obligations. In addition, a new Railway Regulatory Authority will be established under a new regulatory framework for regulating the largely private sector rail industry. This plan was failed and caused a negative impact on the moral of the PR employees. In 2004, after 10 years of JICA recommendations and the unsuccessful attempts at the PR. privatization in 1997, the GOP has decided to create a Pakistan Railways Corporation. The objectives are: To promote the railway as the preferred mode of transport in the country; To grant the Pakistan Railways Corporation sufficient autonomy to operate and to enable it to effectively compete with other modes of transport; To allow the Corporation to procure finances directly from banks/market under suitable terms. The new Board consists of a Chairman, CEO, and nine directors: three from the GOP, three from the Corporation and three from the private sector. The CEO will be recruited from the private sector. The GOP provides the Board with more autonomy and power for its governance. (3) Reorganization of Management The institutional reform calls for: Transferral from the strong social service aspects of the management structure to a commercially oriented railway Increasing performance by creating a business management structure to enhance management responsibilities and accountabilities and enable profit centre accounting The curtailment of surplus employees is one of the top priorities Creating a financially sustainable structure. The financial structure of the PR has been an ad hoc and unsustainable and there have been no tests, or monitoring to underpin budgetary support. During the 1990 s there was no investments in the railway infrastructure except for the procurement of locomotives. In the absence of a clear long-term plan or short-term goals and the Shock Treatment of 1998, the railway has failed to organize itself to receive PSDP allocations to cover maintenance of the rolling stock and rail structure. As a result the infrastructure and rolling stock are out of date and require a substantial amount of investment in order to function as one of the key transport systems in the country. 2-45

89 2.3.6 Financial Situation (1) Financial Resources for Railways The implementing agency of the railway sector is the Pakistan Railways (PR), which is funded in the following manner. Railway Users Ministry of Finance Tariff Revenues Compensation for Losses Funds for Construction Bank Accounts for PR (Pakistan Railways Department under Ministry of Railways) Expenditures for Operation Expenditures for Construction Sources: Interview with Pakistan Railways Figure Flow of Funds for the PR The Joint Secretary of the Ministry of Railways is also the Chairman of the Railway Board. In a different manner to railway companies, the tariff revenues and expenditures are managed through the bank account controlled by the State Bank of Pakistan. One of the biggest income streams for the PR is the tariff revenue. However, based on the financial statements, the tariff revenue does not are not recover the entire costs, and the PR continues to run at a loss. This loss is compensated for by the MOF. In addition, the development of the facilities and equipments is also funded by the MOF. Therefore, under the current situation where most of the financing relies on the National Budget, there is a risk that the financing for developments and ordinary operations of the PR is influenced by other sectors (like the defence sector), which may be a threat to the sustainable development and operation of the PR. (2) Financial Outlook of PR The financial status of the PR is described in Table According to Table , (1) Gross Revenues have slightly exceeded (2) Ordinary Working Expenses from the fiscal year 1999/2000 to the fiscal year 2003/04. However, the Gross Revenues are considerably insufficient to recover (3) Other Costs for Employees, (4) Appropriation to Depreciation Reserve Fund and (6) Interests on Debt. Consequently, the PR must rely on (8) Grants from Government to compensate for the losses. In addition, the value of the grants have significantly increased in recent years. The largest item in Other Costs for Employees is the Pension Payments to pensioners. According to the interview with the PR, the current number of pensioners amounts to around 90,000. At present, it is not possible to generate sufficient funds from the tariff revenue for the Pension Payments. In the accounting system of the PR, the exact depreciation costs are not calculated according to the book value and economic life of the facilities, because the existing accounting system is based on the single entry accounting system. Therefore, instead of calculating the exact amount of depreciation costs, the Depreciation Reserve Fund is appropriated based on rough estimations. The Depreciation Reserve Fund is expected to become a financial resource for the replacement of the existing facilities in the future. Therefore, under the current 2-46

90 circumstances where the revenue is insufficient to recover the amount appropriated in the Depreciation Reserve Funds, the financial resources for the replacement of the existing facilities are not adequately accumulated for the PR. Table Revenue and Expenditure of the PR (Unit: Million Rs.) FY 1999/ / / / /04 (1) Gross Revenues Passenger 4,889 5,802 6,569 7,430 8,218 Freight 3,969 4,715 4,790 5,071 4,566 Parcel & Other Coaching Earning Others , Total 9,889 11,939 13,046 14,810 14,635 (2) Ordinary Working Expenses Administration 1,439 1,526 1,527 1,618 1,999 Repair & Maintenance 4,099 4,220 4,744 5,294 5,344 Operational Staff Costs 1,216 1,205 1,248 1,383 1,498 Operational Fuel Costs 1,870 2,581 2,710 3,290 3,652 Others 1,193 1,339 1,086 1, Total 9,817 10,871 11,315 12,682 13,377 (3) Other Costs for Employees Pension Payments 2,278 2,724 2,922 2,882 2,955 Others Total 2,478 2,920 3,094 3,190 3,324 (4) Appropriation to Depreciation Reserve Fund ,200 1,200 (5) Operational Surplus ((1) (2) (3) (4)) -3,399-2,847-2,356-2,262-3,266 (6) Interest on Debt etc* 3,142 2,513 2,399 3,394 2,096 (7) Net Profit ((5)-(6)) -6,541-5,360-4,755-5,656-5,361 (8) Grants from Government 3,767 4,400 6,000 8,100 8,001 Surplus ((7)-(8)) -2, ,246 2,446 2,641 *Small amounts of miscellaneous Receipts are deducted. Source: Year Book 2003/04 (Ministry of Railways) and PR Financial Statement In addition, the Gross Revenue is insufficient to recover the Interest Payments on Debt. According to the financial statements of the PR, the liability amounted to Rs. 35 billion at the end of the fiscal year 2003/04. The annual interest payments on these liabilities amounted to between Rs. 2 billion and Rs. 3 billion. Therefore, under the current situation, it is difficult for the PR alone to create new financial resources for development. The reason why the PR has continued to incur losses lies in the following facts. (i) A railway business requires enormous investment to develop infrastructure such as Land, Structural & Engineering Works and Equipment. (ii) The current Operation & Maintenance (O&M) and investments of the PR need to be reviewed and improved. With regards to (i), considering the nature of a railway business, large investments are inevitably required to develop infrastructure, and the financial support of the government is also indispensable. On the contrary, there could be some losses caused by possible inefficiencies (Fact (ii)), which should be eliminated. However, there is no accounting and management system in place to distinguish the losses caused by the possible inefficiencies from the ones caused by the investments. In addition, as the exact depreciation costs are not able to be calculated, it is difficult to grasp the influence of each investment on the profit and losses of the business. 2-47

91 2.3.7 Issues and Problems (1) Infrastructure a) Insufficient Signalling System A tragic accident occurred at Sharhad on 19th of July This accident could have been avoided with a proper signalling system. Various types of interlocking systems are applied, but some stations on miner lines are excluded from the interlocking system. In addition, the ATP has so far been installed even though the operation speed is 120km/hr. An automatic block system has only been installed over a section of 188 km out of 7,791 km, and is not been installed even in the double track sections. Most of the signals, other than the sections with the automatic block system are semaphores which are dim, difficult to be recognized in night time, and require frequent maintenance work. Improvement of the signalling systems, including the installation of automatic train protection devices (ATP), is postponed. The existing signalling system is insufficient for the current operation and safety requirements due to because of the following problems; No back-up system, Many staff required to switch signals, No spare parts due to quite old types of signals, Quite small line capacity regardless the double track, Low night visibility of semaphores at night and higher danger of oversight, Restricted train speed at 15 km/hr in large station yards b) Unsatisfactory Telecommunication System Item No back up System Many staff required to switch signals The telecommunication system aids the sales systems and smoothes train operation smooth leading to a credible high-quality service and raising safety levels. The current telecommunication system is not satisfactory for a sustainable railway network. Table Problems with the Existing Signalling System Remark A backup system is important because the scale of damage caused by an accident on the railway is very large. There are many trains running on the Main Line, and the ratio of accidents such as oversight of signals is likely to be high. In addition, since the Pakistan Railways operate high-speed trains at the speed of km/hr, an accident may result in quite large damages. However, currently, no automatic train protection system (ATP) has been installed to provide a back-up system and protect against human errors such as oversight of red signal. At each stations, it is necessary to allocate a group of five staff for each of three shifts at a station a station master (or their alternative), one signalman for signal cabins in each direction, and one sub-signalman for the turnouts in each direction. (The reason for the allocation of sub-signalmen is that a turnout sometimes does not function by remote control from a signal cabin.). Taking account of backup staff for holidays and staff for management, it is necessary to allocate at least 25 staff at each station. Since only one train is allowed to run between an adjoining two stations, stations are laid out at every km in the section between Karachi and Lahore on the Main Line, where the train operation density is high. The group of staff is allocated at each station. 2-48

92 cont. of Table Item No spare parts due to quite out-dated type of signals Quite small line capacity regardless of the double tracks Long waiting time required to overtake a train running at a different speed Low night visibility of semaphores and higher danger of oversight Restricted train speed at 15 km/hr in large station yards Remark No suppliers can provide spare parts as the signals in use are quite out-dated. Currently, the Pakistan Railways makes do with some spare parts from abolished stations. However, in case additional spare parts are required more in the future, the Pakistan Railways has no choice but to purchase specially manufactured expensive parts. By the abolishing some stations, the Pakistan Railways curtailed the number of staff required, however the spacing between some stations became longer causing new bottlenecks. Only one train is allowed to run in one direction between adjacent stations. It takes a long time to communicate and switch signal levers in order for a follow-on train to depart from the preceding station. The long handling time of the current signalling systems disturbs the smooth train operation and amplifies delays. During the site investigation, it was often observed that trains were forced to slow down or make a long stop for changing handling levers. Therefore, despite the double track section, the line capacity is quite low, and other facilities are not utilized efficiently. Note: JICA Study Team When a slow freight train or local passenger train is overtaken by an express train, the slow train is forced to wait until the express train passes, because only one train at a time is allowed to run between stations. In this case, the waiting time for those trains is the total of the following 1) and 2): 1) running time of an express train for two station-to-station distances and signal sighting distance; and 2) time for switching signal levers twice. Depending on the station-to-station distance, a train will be required to wait for minutes. There is not only the long waiting time, the number of times a train needs to stop also increases, because the next train will catch up with the waiting train. Therefore, the travelling time for slow trains becomes quite long. In the time zone when express passenger trains are in operation at intervals of minutes, once caught up with, slow trains may not be able to run forward for quite some time. This causes a serious drop in the average train speed for freight trains. Taking economic efficiency into account, it is not realistic to operate heavy freight trains at high-speeds like passenger trains. Although high performance wagons are to be introduced in the future, the problem of long waiting times will remain to some extent. With regarding to local passenger trains, delays further amplify the long unexpected waiting times. In order for an express train to avoid overtaking a local train at a middle station, the express train sometimes follows the local train until a large station is reached, where the standing time will be long. A semaphore is an obscure lamplight through coloured glass, and it is too dim to recognize during the night time. An oversight of a signal sighting sign may cause a driver to be late in the sighting the signal. In fact, a driver will sometimes turns off the headlights to confirm the signals. Train speed is regulated at 15 km/hr in the following large station yards; Karachi City, Karachi Cant., Kotri, Hyderabad, Rohri, Samasata, Lodhran, Sher shah, Multan Cant., Khanewal, Raiwaind and Lahore. This train speed significantly influences travel times. The signalling system, track alignment in station yards and inadequate maintenance of turnouts, creates th need for this speed restriction. It is necessary to improve the train speed by the improvement of the signalling system and track strengthening work including turnouts on the main tracks. Note: JICA Study Team c) Delay in Track Strengthening/Rehabilitation Works along the Main Corridor Currently, the actual maximum speed is 95 to 105 km/hr on the main corridor. The actual speed meets the present requirement for transport services, but it is not sufficient for sustainable railway management. d) Remaining Single Track Section on the Main Corridor A single track section of 245 km (Khanewal - Raiwind) is still remaining on the main 2-49

93 corridor. The traffic is heavy in this section as well as the other double track sections. However, the scheduled speed is forced to be reduced in this section because trains must wait to exchange, and delays are amplified by unexpected waiting. This means that the single track section disturbs effective train operation. e) Aging of Bridges and Poor Repainting Work for Steel Bridges Most of the bridges have problems due to aging. In particular, five bridges are recognized as Bridges requiring attention, and rehabilitation or reinforcement works are required according to the level of aging. In addition, repainting work for the maintenance of steel bridges has not been adequately due to the lack of funds and skilled work force. f) Inadequate Priority for Electrification The Pakistan Railways has planned to extend the electrified section to Samasata together with the rehabilitation of the existing electrified facilities that are aging. They also plan to electrify the second track to meet the double tracking plan just within the electrified section. (The existing electrified section is 285 km and the proposed is 404 km in total.) There is a low priority for the extension and rehabilitation of the electrified section, because partial electrification is inefficient. Partial electrification requires the frequent changing of, and only short runs for locomotives. In addition, the power supply in Pakistan is not stable enough to extend the electrification. The double-tracking plan has a higher priority than electrification. It is not possible to electrify only one track of a double track. Therefore, in carrying out double tracking, due consideration should be given to the choice of electrification. (2) Rolling Stock a) Shortage of Reliable and High Performance Locomotives Currently, the Pakistan Railways owns 557 locomotives, but the age of more than half of these is beyond their expected lifetime, which increases maintenance works. b) Shortage of Suitable and Attractive Passenger Coaches The existing fleet of passenger coaches is insufficient to carry out the required services. Express trains are always crowded, and people are forced to purchase tickets far in advance to reserve their seats. Commencement of new train services and additional coaches resulted in an increase of passengers in recent years. Out of new 175 coaches, New 108 have been imported from China. These commenced operation in 2003/04. Out of the 450 coaches in a rehabilitation plan, 317 are sent from the Carriage Factory, Islamabad. Some of them are converted to allow for the new service of air-conditioned lower (special). The maximum permissible operation speed of these new and rehabilitated coaches is 140 km/hr, if all other conditions are satisfied. They have the much potential to improve the services and competitiveness in the future, however, at present the quantity and service level of passenger coaches is too low. c) Shortage of High Performance Freight Wagons The operation speed of freight trains is relatively the low due to low performance of the existing freight wagons. PR has only 130 flat wagons (purchased from China) for container transport which can be regarded as high performance wagons. Almost all freight trains operate at less than 55 km/hr. Such low speed operation requires not only a long operating time but also a long waiting time. Thus, the average speed is extremely low, and the current system of railway freight 2-50

94 transport is not able to meet the market demand. In addition, low speed operation interrupts the effective use of valuable locomotives. Most of the existing 4-wheelers will be useless in the near future because they are unsuitable for the current transport system. (3) Transport a) Severe Competition The passenger transport on the Pakistan Railways is steady with express services for middle to long distance intercity transport. However, competition from road transport is predicted to be further intensified in the future with the progress of road construction projects and the development of the automobile industry. Moreover, as the Pakistan economy develops, customers of the upper class railway services who pay high fares will become wealthier. Consequently, those customers will shift to air transport or begin to use private cars. The Pakistan Railways operate in a severely competitive environment. Therefore, continuous to keep up with the changing environment are required for the railway to survive. b) Low Fares One of the key problems in passenger transport is that the economy class fare is too low to cover the costs despite the fact that earnings from the economy class are the main earnings. The revenue from economy class and second class amounts to 77% of the total revenue from passenger transport. Considering the highly competitive situation, it is necessary to raise fares and offer higher quality services that can attract passengers and attract higher fares, for example the introduction of the Air-conditioned Lower (Special). c) Serious Delays Long distance trains have considerable delays, and the length of the delay accumulates towards the end of the journey. This is a serious problem that degrades the value of the railway service. For example, the service of 7up Tezgam from Lahore to Rawalpindi appears to be convenient on the time table, but actual operation times are not given on the time table. For example, the actual delays observed by the study team during the site investigation were as follows (Table ). Table Actual Delays Observed Date Train # Station Delay 20 July DN Khanewal Jn. 1 hr. 13 min. a Rohri Jn. 4 hr. 36 min. a Karachi Cantt. 4 hr. 55 min. 28 July UP Dabheji 15 min. Ran Pethani 47 min. (increasing 32min.in 18.4 km) Rohri Jn. 1 hr. 6 min. Lodhran 1 hr. 48 min. Multan 1 hr. 55 min. 29 July UP Multan (Start) 41min. Lahore 1 hr. 40 min. 30 July UP Rawalpindi 26 min. Source: JICA Study Team On 28 July 2005, the 29UP train took 42 minutes from Dabheji to Ran Pethani (18.4km) accumulating a delay of 32 minutes This delay was caused by speed restriction attributed to the track strengthening work over a long section. Construction/maintenance work should be limited to an appropriate length to minimize delay to train in service. To decide this length, both the economic efficiency of the construction/maintenance work and the effect of the works on the quality of services should be taken into consideration. 2-51

95 Figure and Figure illustrate examples of long waiting time of trains, which express the level of service of the existing train operation. KARACHI CITY 3H 4H 5H 0-20min 20-40m in 40-60m in 0-20min 20-40min 40-60m in 0-20min 20-40m in 40-60m in Landhi Jn. Jum m a G oth Bin Qasim G a ddar Dabheji Ran Pethani Passenger Jungshahi Braudabad Jhim pir Meting Freight Bholari KOTRI Source: JICA Study Team Figure Example of Long Waiting Time of Freight Train Multan Cantt Multan City Piran Ghaib 3H 4H 5H 0-20min 20-40min 40-60min 0-20min 20-40min 40-60min 0-20min 20-40min 40-60min Tatipur Riazabad Kot Abbas Shaheed Sham kote KHANEWAL Source: JICA Study Team Figure Example of Long Waiting Time on Single Track Line 2-52

96 d) Insufficient Capacity The carrying capacity of the passenger transport is insufficient. The express trains, which are the main services on the Pakistan Railways, are always overcrowded and it is difficult to offer immediate seat reservations. Travelling without a seat is unfavourable for long distance express services. This situation results in customers in choosing other means of travel. e) Less Attention to Freight Transport Currently freight transport is not treated on an equal terms with passenger transport. For example, there is a higher priority for locomotives to be used for passenger transport. Freight trains have no fixed operation diagram and no precedence in the actual operation adjustment. In order to prosper, it is essential that the freight business, such as high speed container transport, obtains equal status with passenger transport. (4) Administration a) Obscure Responsibilities for Each Business Unit The responsibilities of the three business units under the operation unit; the infrastructure business unit, passenger business unit and freight business unit, are not clearly divided. b) Non-core Business Activities under the Direct Management of PR The non-core activities under the Manufacturing and Services Unit are managed together with the railway under the unified regulation, and their customers are limited to the Pakistan Railways. This situation prevents the activities from prospering by broad and free business and forces the Pakistan Railway to bear a considerable burden. The non-core businesses are to be separated from the railway as stand alone businesses so that each business can be well managed. They can then expand their customer bases and business categories, make the most of their property and human resources and raise efficiency by applying suitable management principles without any restraints from the railway management. For example, the carriage factory is able to manufacture not only carriages but also steel bridges, large automobile chassis/bodies and containers for customers other than the Pakistan Railways. Concrete sleeper factories are able to manufacture various concrete products such as piles, poles, U-shaped gutters as well as sleepers. They can sell those products to a broad range of customers. As for hospitals and schools, a comprehensive reform must be carried out whereas the facilities can be useful as property. 2-53

97 (5) Summary of Issues The Pakistan Railways has many issues. They are mainly due to a backlog caused by a shortage of funds in the 1990s. Other issues are the result of overlooking the demand in the transport market. The issues are summarized below: Completion of track strengthening of the main corridor, in which the maximum speed of 120km/hr is applied for the highest standard section; To set maintenance schedule and to make outfit and equipment satisfactory with track maintenance work because not only track strengthening, but also maintenance work such as tamping and re-alignment is indispensable to keep tracks in good condition.; To improve telecommunication system improvement of signalling systems inevitably accompanies enhancement of telecommunication systems; To double tracked the single track section between Khanewal and Raiwind as early as possible, considering that improvement of bypass routes as an alternative is expected to be much more expensive than the double tracking; To increase the number of high performance locomotives in order to provide more reliable and sustainable services and to expand railway transport;. To secure high performance wagons and locomotives to realize high speed freight transport service ; To increase the number of coaches to improve quality of services; To introduce suitable high performance wagons as much as possible for railway freight transport to survive. 2-54

98 2.4 Port Ports (1) Introduction Pakistan's coastline faces the Arabian Sea and is approximately 1,100 km in length, of which 330 km is in the Sind Province and 770 km is in the Baluchistan Province. The ports of Karachi and Qasim are located in the Sind Province and are the only deep sea ports in Pakistan as shown in Figure Along the coastline there are several ports including two international ports; the ports of Karachi and Qasim. Other ports are mostly small ports such as Jiwani, Gwadar, Pasni, Kalmat, Ormara, Sonmiani, Nargar Parkar and Keti Bunder. Since 1950 Pakistan has expanded its port facilities. Karachi port was originally Pakistan's only port. A second port was built at the port of Qasim and became operative in the early 1980's. Government policy in recent years has been to promote privatization, and both ports have been developed with the assistance of private funds. The total cargo volume through the two ports in 2003/04 was 43.4 million tons, about 1.6 times the volume in 1991/92. Therefore, this study considers the two ports of Karachi and Qasim as part of the study for the national transport plan. (2) Natural Conditions a) Geography The Port of Karachi is located to the west of the mouth of the Indus River. The port is situated between the Western and Eastern Backwater. The Western Backwater (behind the West Wharf) is an area of approximately 35 km 2, and the Eastern Backwater (behind the East Wharf) is an area of about 6 km 2 and some of the area is covered with mangroves. The harbour entrance is protected by Manora Breakwater (480 m) and Keamari Groyne. The surface is mostly covered with mud and many creeks running through a shallow area. The port of Qasim is located between Phitti, Kadiro and Gharo Creeks. The whole channel is divided into outer and inner channels with a total length of 43.7 km. The outer channel is open to waves approaching from the southwest during the monsoon season, while the other is in the protected creek. b) Tides The major tidal levels are as shown in Table Table Tidal Levels unit: m Tidal Level Karachi Qasim Highest Astronomic Tide H.A.T Mean Higher High Water M.H.H.W Mean Lower High Water M.L.H.W Mean Sea Level M.S.L Mean Higher Low Water M.H.L.W Mean Lower Low Water M.L.L.W Chart Datum Lowest Astronomic Tide L.A.T Source: Pakistan Tide Tables 2-55

99 Source: JICA Study Team Figure Karachi and Qasim Ports Area 2-56

100 c) Currents Observations of the maximum velocity and direction of the currents at the port of Karachi were carried out at points near the top of the Manora Breakwater in July and August, According to the observations, the direction of the flood currents is eastward at both points. The velocity of the flood currents is approximately 0.3 m/sec. The direction of the ebb currents is south westward and the velocity is between 1 m/sec and 1.25 m/sec. These velocities are relatively low and can be considered not to affect the navigation of vessels. The maximum velocity and direction of the currents at the outer channel of the port of Qasim during spring tide were assumed based on the two observation points. The direction of the current inside the Phitti creek was determined by the tides. Discharges of the rivers flowing into the creek are small, so their contributions are negligible. According to the Pakistani Chart (PAK-20), the maximum current velocity in the channel (near Buddo Island) during spring tide is 1.5 m/sec for flood current and 2.5 m/sec for ebb current. Velocities in Phitti creek are 1.25 m/sec for flood current and 1.5 m/sec for ebb current. It is understood that the current speed is generally not strong, however, during the spring tide period the maximum current could affect the navigation of ships in the narrow channel. d) Earthquakes Pakistan lies in the active seismic region which runs through Indonesia to the Himalayas. However, in the Karachi region, no earthquakes of any considerable magnitude are reported. According to a map of the seismic zone prepared by the Department of Meteorology and Geophysics of West Pakistan, the seismic factor in the Karachi region ranges from 0.05 to According to the "Soil Investigation Report for Marginal Wharf Project in Port of Qasim in 1976", the port area lies in a minor seismic zone, with acceleration ranging from 0.05 to (3) Berthing Facilities a) Karachi Port The Port has five water areas: the Approach Channel, Channel Bend, Lower Harbour, Upper Harbour and Juna Bunder. The berth facilities are comprised of the East Wharf, West Wharf, Juna Bunder Wharf, Barge Wharf and Oil Piers, which have transit sheds or plinth. The entrance of the port is protected from open sea waves by the Keamari Groyne and Manora Breakwater as shown in Figure There are a total of 30 berths, 17 on the East Wharf, 7 berths on the West Wharf and 6 berths on the Juna Bunder Wharf. Three Oil Piers including Oil Pier II which is under construction are located in the lower harbour. In addition, there are two international container terminals such as Karachi International Container Terminal (KICT) and Pakistan International Container Terminal (PICT) as described below. KICT is situated at berth Nos. 28 to 30 on the West Wharf with a total quay length of 600 m. The major shipping lines using the KICT terminal are: APL, Cosco, Evergreen, Hanjin HMM, Lloyd Triestino, OOCL, PONL, Seacon, TSK, Wan Hai and Yang Ming. PICT is situated at berth Nos. 6 to 9 on the East Wharf with a total terminal area of some 22 hectares, a quay length of 600 m and a water depth in front of the quay of 10.5 m. Lists of the channels, berths and storage facilities are presented in Table 2.4.2, Table and Table

101 Table Navigation Channels at the Port of Karachi Sectors Length (m) Width (m) Sanctioned Depth (m) Approach Channel 2, Entrance Channel Bend 1, Lower Harbour 3, Upper Harbour 2, Juna Bubdar 1, PIDC Channel Source: KPT Table Berth Facilities at the Port of Karachi Wharf Berth Length Sanctioned Depth Design Depth No. (m) (m) (m) Remarks East Wharf PICT Total 17 2,655 Juna Bunder Total West Wharf KICT Total 7 1,269 Oil Berth OP-I Max. 35,000 DWT OP-II Under construction OP-III Max. 75,000 DWT Total 3 - Source: KPT 2-58

102 R.L.2 DAWOOD ENTRANCE CHANNEL G.L.2 MANORA BREAKWATER Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) m R.L.4 R.L.3 KE AMARI GROYNE G.L.5 G.L.4 G.L.3 LOWER HARBOUR MANORA R.L.5 OP-I N ESSO P.B.S P.R.L P.N.O ESSO P.B.S P.B.S OP-III OP-II BUNKER ISLAND BITH ISLAND Figure Port of Karachi 10 5 P.I.C.T 7 6 CHINNA CREEK BACKWATER BABA ISLAND NEW N.M.ROAD BRIDGE N.M. BERTHS JUNA BUNDER BERTHS EAST WHARVES BERTHS WEST WHARVES BERTHS K.I.C.T NEW CHANNEL Source: KPT 2-59

103 Table Storage Facilities at the Port of Karachi unit: m 2 Location Covered Area Open Area Total East Wharf 69, , ,130 West Wharf 64, , ,712 M.I Yard/Juna Bunder 15,812 57,321 73,133 K.G.C.C. 11,151 63,187 74,338 T.P.X 147, , ,892 New T.P.X. - 26,357 26,357 Total 308, , ,562 Source: KPT b) Qasim Port The Port is located about 60 km south-east of the port of Karachi, and became fully operational in It has an entrance navigation channel of about 44 km in length, which allows the passage of 50,000 DWT ships at high tide and 25,000 DWT ships in all weather conditions as shown in Figure Lists of the channels and berths are presented in Table and Table Table Navigation Channels at the Port of Qasim Sectors Length (m) Width (m) Sanctioned Depth (m) Approach Channel Inner Reach Source: PQA Table Berth Facilities at the Port of Qasim Wharf/Terminal Berth Length Depth Apron Width Remarks No. (m) (m) (m) Marginal Wharf sub-total Qasim International QICT Container Terminal (QICT) Sub-total Total 7 1,400.0 Iron Ore and Coal Berth (IOCB) FOTCO Oil Terminal ENGO Vopak Terminal Source : PQA 2-60

104 Figure Port of Qasim Source: PQA The "Marginal Wharf" is comprised of seven berths with a total length of 1,400 m. Berth Nos. 1 to 4 are used as multi-purpose terminals and handle edible oil, liquid bulk, chemicals and LPG (berth No. 1), wheat, fertilizer, rice and cement (berth Nos. 3 to 4) and can take fully laden ships up to 25,000 DWT. Berth Nos. 5 to7 are used for container handling by 2-61

105 QICT and can accommodate ships up to 35,000 DWT. There are four private terminals as follows. Iron Ore and Coal Berth (IOCB) The berth is exclusively used by Pakistan Steel Mills and designed to accommodate ships of 75,000 DWT, however, due to channel constraints, the cargo parcel size is limited to about 55,000 tons. The permissible LOA is 225 m and beam is 40 m. Current depth alongside is 12.8 m. The berth is connected to a stockyard by a 4.5 km conveyor belt system and has two unloaders (grab gantry cranes) with a rated capacity of 600 tons/hour per unloader (total is 1,200 tons/hour). Qasim International Container Terminal (QICT) The berth is situated at Nos. 5 to 7 of the marginal wharf including a 400 m back up space. Total berth length is 600 m with a width of 32.8 m and a water depth of 12.0 m. Therefore, the permissible dimensions of vessels are 245 m LOA, m beam and 11.0m draft. The total terminal area is about 240,000 m 2, with a stacking area of about 195,000 m 2. Cargo handling operations within the terminal are performed by the terminal s own staff. The major shipping lines using the QICT terminal are: Maersk Sealand, NSCSA, PONL and TSK. FOTCO Oil Terminal The berth is designed to accommodate vessels up to 75,000 DWT but due to the limited channel depth, the maximum draft of vessels is 11.0 m. Vessel size of up to 245 m LOA and 40 m beam are permitted. Current depth alongside is 12.0 m. The cargo loading/unloading facilities consist of two 16-inch marine loading arms. The cargo pipeline supplies the onshore terminal point about 4 km from the berth. Engro Vopak Terminal The berth was constructed in 1997 and is 11.0 m in depth. Cargo handling is carried out by loading arms or hoses depending on the cargo. The berth is connected to the storage area by a causeway of 2 km, with pipelines for various chemicals and LPG running along the trestle Port Transport (1) Cargo Handling Volume Table summarizes the total cargo volume and annual increase rate from 1991/92 to 2003/04 at the ports of Karachi and Qasim. Exports and imports of general cargo have been increasing at high growth rates. The annual growth rate of exports is higher than that of imports. Table Cargo Handling Volume at the Ports of Karachi and Qasim Handling Volume (000 tons) Annual Growth Rate (%) 1991/ / / / Import General Cargo 3,821 4,111 5,884 11, Dry Bulk Cargo 7,090 6,810 7,129 6, Liquid Bulk Cargo 10,706 13,455 17,642 15, Total Import 21, ,655 33, Export General Cargo 2,872 2,736 3,233 6, Dry Bulk Cargo 1, , Liquid Bulk Cargo 1,648 2,102 2,512 2, Total Export 5,993 5,633 7,935 10, Total (Imp+Exp) 27,611 30,009 38,590 43, Source: JICA Study Team 2-62

106 a) Karachi Port Figure shows the cargo tonnage handled by type of cargo at Karachi port for 1991/92 through to 2003/04. During this period the total port traffic increased from 20.5 million tons in 1991/92 to 27.8 million tons in 2003/04. Traffic at the port has been predominately imports with 21.7 million tons of imports in 2003/04 accounting for 78.1% of total traffic. '000 tonnes 25,000 General Cargo (Export) Liquid Bulk (Export) Dry Bulk (Export) Total (Export) '000 tonnes 25,000 General Cargo (Import) Liquid Bulk (Import) Dry Bulk (Import) Total (Import) 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5, Figure Cargo Handled at the Port of Karachi Imported Cargoes There has been a significant difference in the growth of general cargo, dry bulk, and liquid bulk within imports. As can be seen from Table 2.4.8, imported general cargo reached 7.1 million tons in 2003/04 up from 3.8 million tons in 1991/92 and 4.5 million tons in 1998/99. This represents annual increase rates of 5.3%, 5.6% and 9.3% from 1991/92 to 2003/04, 1993/94 to 2003/04 and 1998/99 to 2003/04 periods, respectively. Dry bulk dropped from 1.9 million tons in 1991/92 to 1.8 million tons in 1998/9, however it then rapidly increased to 2.9 million in 2003/04 on the strength of an annual average increase rate of 10.7%. Liquid bulk steadily increased from 9.6 million tons in 1991/92 to 12.0 million tons in 1998/99, however, fell to 11.7 million tons in 2003/04. Diesel and other oils rapidly increased to 3.6 million tons in 2003/04 from 0.7 million tons in 1991/92. However, crude oil and fuel oil decreased from 8.4 million tons in 1991/92 to 7.5 million tons in 2003/04 and from 1.1 million tons in 1991/92 to 265 thousand tons in 2003/04. Exported Cargo The total exported cargo at Karachi port marginally increased from 5.2 million tons in 1991/92 to 6.4 million tons in 2001/02, however, exports were down slightly in 2003/04 at 6.1 million tons. Exported general cargo registered 2.9 million tons in 2003/04 or 48.1% of total export, which is basically unchanged from the approximately 3.0 million tons recorded in 1991/92. The handling volume of rice reached 761 thousand tons in 2003/04 and accounted for 81.2% of dry bulk exports. Molasses exports reached 1.5 million tons in 2003/04, accounting for 68.7% of total liquid bulk exports. Naphtha and petroleum products registered 695 thousand tons in 2003/04, accounting for 31.3% of liquid bulk exports. 2-63

107 b) Qasim Port Figure shows the cargo tonnage handled by type of cargo at Qasim port for 1991/92 through to 2003/04. During this period, total port traffic rapidly increased from 7.2 million tons in 1991/92 to 15.6 million tons in 2003/04 with an annual increase rate of 6.7%. Traffic at the port has been predominately imports, with 2003/04 imports of 11.7 million tons accounting for 74.7% of total traffic. '000 tonnes General Cargo (Export) Dr y Bulk ( Expor t) Liquid Bulk (Export) Total (Export) '000 tonnes General Cargo (Import) Liquid Bulk (Import) Dry Bulk (Import) Total (Import) 14,000 14,000 12,000 12,000 10,000 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,000 2, Figure Cargo Handled at the Port of Qasim Imported Cargoes As can be seen from Table 2.4.9, total imports rapidly increased from 6.4 million tons in 1991/92 to 13.4 million tons in 1999/00, however, decreased to 11.7 million tons in 2003/04. This represents an annual increase rate of 5.2%, 5.6% and -1.1% from 1991/92 to 2003/04, 1993/94 to 2003/04 and 1998/99 to 2003/04 periods. Dry bulk cargo steadily increased from 5.2 million tons in 1991/92 to 8.4 million tons in 1997/98, however, decreased to 7.6 million tons in 2003/04. General cargo makes up 35.4% of the total imported cargo and has rapidly increased from 16 thousand tons in 1991/92 to 4.1 million tons in 2003/04 with an annual increase rate of 58.8%. Liquid bulk rapidly increased from 1.1 million tons in 1991/92 to 7.1 million tons in 1999/00, however, decreased to 4.1 million tons in 2003/04. Edible oils rapidly increased from 19 thousand tons in 1992/93 to 1.4 million tons in 2003/04. Exported Cargo Total exports at Qasim port in 2003/04 reached 4.0 million tons with an annual growth rate of 14.2% from 1991/92 through 2003/04. Of this total 3.7 million tons or 94.2% were general cargo. 2-64

108 Table Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Cargo Handled at the Port of Karachi Unit:000'ton 1991/ / / / / / / / / / / / /04 IMPORTBULKCARGO Cement Fertilizer 832 1,154 1, ,291 1,738 1,073 1,563 1, ,060 1,278 1,281 RockPhosphate IronScrap Sugar Sulphar Repseeds Wheat Coal&Coke ,126 SoyaBean Bitumen Total 1,889 1,930 1,926 1,146 1,693 2,536 1,352 1,764 1,559 2,255 1,841 2,178 2,939 IMPORTGENERALCARGO Bamboos Dyes&Chemicals Jute NewsPrin OtherPaper Timber Logs Tea Iron&Steel MotorVehicles Tractors RubberScrap DangerousCargo AfghanCargo OtherCargo 3,057 3,352 3,285 3,090 3,389 3,544 3,597 3,723 4,044 4,180 4,832 4,937 5,841 Total 3,805 4,187 4,101 4,181 4,475 4,357 4,215 4,520 4,952 5,241 5,875 6,063 7,064 IMPORTLIQUIDBULKCARGO CrudeOil *1 8,378 *1 9,454 *1 10,384 4,022 4,252 3,841 4,233 4,499 4,584 6,860 7,528 7,174 7,519 Diesel&OtherOil *2 67 *2 154 * ,263 5,859 5,650 5,509 5,852 5,949 4,651 3,683 3,215 3,616 FuelOil *3 1,127 *3 1,531 *3 1,081 1,559 1,448 1,240 1,205 1, PalmOil 1, Soyabeanoil Tallow Total 9,572 11,139 11,585 12,200 12,552 11,470 11,547 12,034 11,639 12,567 12,614 11,395 11,730 TotalImports 15,266 17,255 17,611 17,526 18,719 18,362 17,114 18,318 18,149 20,063 20,330 19,637 21,732 EXPORTBULKCARGO Fertilizer Rice ,088 1,202 1,607 1,469 1,769 1, Steel Wheat ChoromeOre Sugar Cement *4 65 * Clinker Slag Total , ,196 1,317 1,932 1,574 1,861 1,306 1, EXPORTGENERALCARGO Cotton CottonYarn Cowdung FoodGrain GuwerMeal/OilCake Leather(hide&skin) RiceBran SportsGoods Textiles OtherCargo 1,952 2,213 1,948 1,966 2,087 2,193 2,415 1,450 1,601 2,031 2,189 2,680 2,606 Total 2,866 2,978 2,736 2,677 2,930 2,802 2,659 1,678 2,162 2,559 2,709 3,101 2,924 EXPORTLIQUIDBULKCARGO Molasses 1,081 1,013 1,614 1,701 1,027 1,049 1,517 2,070 1,718 1,128 1,734 1,292 1,525 PeroliumProduct Naptha *5 350 * Oil(ForBunkers) Total 1,648 1,406 1,764 1,857 1,126 1,115 1,594 2,125 1,876 1,499 2,346 2,004 2,221 TotalExports 5,186 4,914 4,959 5,572 4,862 5,113 5,570 5,735 5,612 5,918 6,362 6,273 6,081 Total(Imp+Exp) 20,452 22,170 22,570 23,098 23,581 23,476 22,685 24,053 23,761 25,982 26,692 25,909 Note;*1:Crudeoil,diesel,fueloil,etc*2:LPG,kerosene,etc.*3:Edibleoils*4:Cementandclinker*5:Crudeoil 27,813 Source: KPT 2-65

109 Table Cargo Handled at the Port of Qasim Unit:000'ton 1991/ / / / / / / / / / / / /04 DRYIMPORTS Wheat 2,215 2,866 1,686 2,526 2,031 2,541 4,243 3,228 2, Phosphate Urea Sugar Pulses Cement Jute PigIron Live-stock(Innumber MobileUnits(Innumb IronOre 1,623 1,701 2,032 1,653 1,793 1,322 1,776 1,196 1,623 1,763 1,604 1,543 1,770 Coal 985 1,044 1,007 1,114 1, , , ,032 1,139 Mang.Ore GeneralCargo ,124 1,364 1,659 1,532 1,917 2,878 4,127 Sub-Total 5,218 6,109 4,894 5,431 5,180 5,352 8,350 6,729 6,352 4,969 4,849 6,058 7,565 LIQUIDIMPORTS FurnaceOil 1,103 1,345 1,704 2,280 3,256 3,802 4,665 4,115 5,502 4,664 3,611 3, Chemicals EdibleOil , ,075 1,040 1,101 1,355 CarbonOil LPG HSD , Sub-Total 1,134 1,390 1,871 2,575 3,662 4,615 5,602 5,608 7,056 7,004 6,233 6,197 4,094 DRYEXPORTS Wheat(Re-exp) Wheat PigIron Coke Rice Cotton Sugar SteelBillets HRSCoils/SteelPipes Fertilizer(Urea) Cowdung Cement GeneralCargo ,164 1,555 1,603 1,548 1,649 2,602 3,723 Sub-total ,265 1,813 1,839 1,748 2,375 3,590 3,763 LIQUIDEXPORTS CrudeOil Molasses FurnaceOil(Re-Exp) Sub-Total GRANDTOTAL 7,159 8,061 7,440 9,197 9,649 10,614 15,438 14,537 15,553 14,173 13,952 16,146 Source: PQA 15,

110 (2) Container Traffic Table and Table show the annual container movements at the ports of Karachi and Qasim for 1997/98 through to 2003/04. In 2003/04, there were 1.2 million TEUs movements at the two ports, of which 1.0 million TEUs, or nearly 80.9% of the total were full container movements,. a) Karachi Port Container traffic has been a growing component of port traffic between 1997/98 and 2003/04. In 2003/04 824,753 TEUs were handled which is more than 1.6 times the 505,287 TEUs handled in 1997/98. During the 1997/98 to 2003/04 period, container traffic has increased at an annual average rate of 8.5%. Container traffic has been roughly balanced between import and export movements. The share of empty containers for imports and exports in 2003/04 was 6.5% and 37.2%, respectively. The cargo volume for a loaded import and export container in 2003/04 was 14.5 ton/teu and 13.8 ton/teu respectively. Table Container Traffic at the Port of Karachi 1997/ / / / / / /04 Import Empty Container 20 ft. 16,719 17,618 13,959 17,618 18,163 14,403 12, ft. 10,827 7,702 16,700 21,045 15,340 10,221 8,105 TEU 38,373 33,022 47,359 59,708 48,843 34,845 28,285 Loaded Container 20 ft. 118, , , , , , , ft. 50,960 56,744 62,537 65,456 83,911 92, ,418 TEU 220, , , , , , ,186 Cargo volume (ton) 3,259,497 3,680,440 4,031,331 4,250,090 4,942,097 5,125,277 5,943,115 Total (TEU) 259, , , , , , ,471 Export Empty Container 20 ft. 27,695 28,034 33,164 34,821 38,228 38,039 65, It. 10,125 17,477 20,480 10,856 22,083 28,040 39,451 TEU 47,945 62,988 74,124 56,533 82,394 94, ,913 Loaded Container 20 ft. 101, , , , , , , ft. 48,384 39,738 55,714 68,698 68,296 67,877 63,327 TEU 198, , , , , , ,369 Cargo volume (ton) 2,625,490 2,642,251 2,989,347 3,329,883 3,523,639 3,652,708 3,359,051 Total (TEU) 246, , , , , , ,282 Grand Total (TEU) 505, , , , , , ,753 Source: KPT b) Qasim Port Container traffic has rapidly increased since 1997/98, when the operation of QICT commenced. During the period from 1997/98 to 2003/04, container traffic increased from 132,743 TEUs in 1997/98 to 421,369 TEUs in 2003/04 at an annual average increase rate of 21.2%. In a similar manner to the Karachi port, container traffic has been roughly balanced between import and export movements. The percentage of empty import and export containers in 2003/04 was 16.6% and 14.7%, respectively. Qasim port has prepared the annual container movements, however the cargo volume of loaded container has not been recorded. 2-67

111 Table Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Container Traffic at the Port of Qasim 1997/ / / / / / /04 Import EmptyContainer 20ft. 9,625 12,654 9,621 6,172 4,518 13,009 7,036 40ft. 11,629 11,828 12,989 11,992 11,702 14,227 13,126 TEU 32,883 36,310 35,599 30,156 27,922 41,463 33,288 LoadedContainer 20ft. 12,540 12,261 11,523 13,258 17,506 39,500 65,299 40ft. 9,416 12,214 11,524 10,881 15,688 28,440 51,225 TEU 31,372 36,689 34,571 35,020 48,882 96, ,749 Total(TEU) 64,255 72,999 70,170 65,176 76, , ,037 Export EmptyContainer 20ft , ,733 11,079 40It ,111 2, ,432 2,859 10,692 TEU 2,699 5,102 5,488 2,596 3,487 11,451 32,463 LoadedContainer 20ft. 25,157 34,521 31,444 29,580 29,600 51,156 65,769 40ft. 20,316 25,994 28,964 28,743 31,802 45,659 61,050 TEU 65,789 86,509 89,372 87,066 93, , ,869 Total(TEU) 68,488 91,611 94,860 89,662 96, , ,332 GrandTotal(TEU) 132, , , , , , ,369 Source:QPA c) Containerized Ratio at Karachi Port Table shows the containerized ratio at Karachi port. 9.3 million tons of cargo was handled in containers in 2003/04, accounting for 84.9% of the port's total general cargo traffic and other cargo. Table Containerized Ratio at Karachi Port (Million Tons/Year) 1997/ / / / / / /04 Import Containerizable Cargo Containerized Cargo Containerization (%) Export Containerizable Cargo Containerized Cargo Containerization (%) Total Containerizable Cargo Containerized Cargo Containerization (%) Source:KPT 2-68

112 (3) Vessels Calling at the Ports a) Karachi Port According to the KPT's classification, vessels calling at the port of Karachi are divided into four types; general cargo vessels, oil tankers, dry bulk carriers, and container vessels as shown in Figure According to the actual records in 2003/04 around 1,500 vessels called at the port. Almost half (50.7%) or 783 of the vessels that called the port were container vessels. Oil tankers and general cargo vessels followed, accounting for 27.1% (418 vessels) and 11.9% (184 vessels), respectively. In terms of the volume of cargoes handled at the port, the oil tankers accounted for 50.2% of the total volume, and container vessels, dry bulk carriers and general cargo vessels accounted for 33.4%, 13.9% and 2.5% respectively. No. of Ships / / / / /04 Year General Cargo Dry Bulk Carrier Oil Tanker Container Source: KPT Figure Number of Vessels Calling at the Port of Karachi b) Qasim Port The vessels calling at the port of Qasim are classified by the terminal in the port statistics as Marginal Wharf (general cargo and others), IOCB (dry bulk carrier), FOTOCO Terminal (oil tanker), ENGRO Terminal (dry and liquid bulk carrier) and QICT (container) as shown in Figure There were 806 vessels calling at the port in 2003/04. Vessels of QICT (container vessels) accounted for 47.9% (386 vessels) of the total number. In terms of the volume of cargoes handled at port, the container carriers and liquid bulk accounted for 45.6% and 27.4% respectively. Iron and coal carriers accounted for 18.6%. No. of Ships / / / / /04 Year Marginal Wharf IOCB (Dry Bulk Carrier) FOTCO (Oil Tanker) Engro (Dry and Liquid Bulk Carrier) QICT (Container) Source: PQA Figure Number of Vessels Calling at the Port of Qasim 2-69

113 (4) Waiting Time for Berthing a) Karachi Port According to the KPT's records in 2003/04 the average waiting time for general cargo vessels, fertilizer and rice carriers reached 21.6 hours per ship, 20.2 hours per ship and 37.2 hours per ship. While crude oil, HSD oil and Naphtha carriers reached 34.7 hours per ship, 30.3 hours per ship and 56.4 hours per ship respectively. Container vessels had an average waiting time of 18.1 hours per ship. Remaining vessels, except Palm Oil and Molasses carriers, kept within 40.0 hours per ship as shown in Figure hours/ship General Cargo Container Fertilizer Rice Rock Phosphat Soya Bean Crude Oil Gas Oil HSD Oil Molasses Naphtha Palm Oil Soyabean Oil Tallow Oil Source: KPT Figure Vessel Waiting Time at the Port of Karachi (per ship) b) Qasim Port According to records, in 2003/04 the average waiting time for the iron ore carriers reached hours per ship, which is the longest waiting time at the Qasim port. Wheat carriers (Marginal Wharf), HSD oil carriers (FOTOCO Terminal) and general cargo vessels (Marginal Wharf) followed the iron ore carriers, accounting for 69.8, 48.3 and 33.4 hours per ship respectively. Container vessels had an average waiting time of 12.4 hours per ship, which was shorter than at Karachi port despite the long navigation channel as shown in Figure hours/ship General Cargo (M. Wharf) Chemicals (M. Wharf) Carbon Oil (M. Wharf) Edible Oil (M. Wharf) Wheat (M. Wharf) Container (QICT) Coal (IOCB) Iron Ore (IOCB) IOCB Crude Oil (FOTCO) HSD Oil (FOTCO) LPG (ENGRO) Chemicals (ENGRO) Source: PQA Figure Vessel Waiting Time at the Port of Qasim (per ship) 2-70

114 (5) Utilization of Berths a) Karachi Port The utilization of berths at the port of Karachi is classified according to vessel type, namely, general cargo vessels, container vessels, dry bulk carriers and tankers as shown in table Berth Table Berth No. Total Length (m) Utilization of Berths at the Port of Karachi Actual No. of Berths No. of Vessels Actual Berthing Time (hours/ship) Actual Berthing Time (hours) Berth Occupancy Rate (%) East Berth , , PICT , , Juna Bunder , Berth , , West Berth , , KICT Oil Berth OP , OP Under construction OP , Note: This table was made based on the information of KPT Source: JICA Study Team There are 27 berths used for loading and unloading dry and liquid cargoes and three oil berths. According to the several kinds of records of the cargo-handling operation in 2003/04, 25 of the 27 berths and the two oil berths were operational. The total number of ships which moored at the 25 berths and two oil berths was 1,292 and 294 respectively. The average berthing/operation time per ship is hours for rock phosphate carriers, hours for fertilizer carriers and hours for rice carriers. The average volume of cargoes handled per vessels is 67,739 tons per oil tanker, 61,288 tons per HSD oil tanker, 1,040 TEU per container vessel and 6,604 tons per general cargo vessel. The berth occupancy rate at the port of Karachi maintained normal values in 2003/04 except for the East Berth Nos. 1 to 5, West Berth Nos. 24 to 27 and the oil berths, because OP-II is under construction and the Berth No. 1 is being utilized for oil handling on a temporary basis. b) Qasim Port The utilization of berths at the port of Qasim is classified according to vessel type, namely, general cargo vessels including various kinds of vessels, dry bulk carriers laden with wheat, dry bulk carriers laden with iron ore and coal, and tankers as shown in Table The "Marginal Wharf" is comprised of seven berths with a total length of 1,400 m. Berth Nos. 1 to 4 are used as multi-purpose terminals, while berth Nos. 5 to 7 are used for container handling by QICT. There are four private terminals. 2-71

115 Terminal Table Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Berth No. Utilization of Berths at the Port of Qasim Total Length (m) Actual No. of Berths No. of Vessels Actual Berthing Time (hours/ship) Actual Berthing Time (hours) Berth Occupancy Rate (%) Marginal Wharf , , QICT FOTCO Oil , ENGRO , IOCB , Note: This table was made based on the information of PQA Source: JICA Study Team According to the record of cargo-handling operations, in 2003/04 the total number of ships which moored at the four berths and four private berths was 189 and 602, respectively. The average mooring time per ship for wheat carriers and general cargo vessels at marginal wharf, iron ore and coal carriers at IOCB, crude oil tanker at FOTOCO, LPG carriers at ENGRO and container vessels was hours, hours, 88.3 hours, 69.6 hours, 21.4 hours and 25.3 hours, respectively. The average volume of cargo handled per vessels is 55,667 tons per crude oil tanker, 47,458 tons per coal carrier, 9,565 tons per general cargo vesswl and 16,500 tons per wheat carrier. The berth occupancy rate at the port of Qasim was 36.3% at berth Nos. 1 to 4 and 66.5% (slightly high) at the iron ore and coal berth in 2003/04. (6) Cargo Handling Productivity a) Karachi Port According to KPT, the cargo-handling productivity of the general cargo vessels laden with various kinds of cargo was less than 75.1 tons per hour on average and was higher than the 62.9 tons per hour on PQA's records. The average cargo-handling productivity in 2003/04 was: General cargo: 75.1 ton/hour Container: 30.3 TEU/hour Crude oil: 1,326.8 ton/hour HSD oil: 1,435.5 ton/hour At present, oil berth OP-II is under construction. After completion of berth OP-II, the average handling productivity is anticipated to be around 2,800 tons per hour. b) Qasim Port According to PQA, the average cargo-handling productivity in 2003/04 was: General cargo: 62.9 ton/hour Container : 43.8 TEU/hour Crude oil : ton/hour HSD oil : ton/hour Wheat : 97.5 ton/hour Iron ore and coal: ton/hour Considering the capacity of the existing unloaders (nominal capacity is 1,200 tons per hour two unit), the actual productivity seems to be very low. 2-72

116 (7) Port Tariff The present main tariff at both ports is shown in Table The tariff of PQA is about 12% lower than that of KPT excluding wharfage. Table Main Tariff of KPT and PQA Unit KPT Revised in Sept PQA Revised in May 2005 Pilotage US$/GRT Over 5000GRT Haulage and Towage US$/tug/act Mooring Fee US$ per GRT Berthage Fee US$ per GRT For first 24 hrs Port Dues US$ per GRT Wharfage Import Export Import Export Break Bulk Rs./ton Dry Bulk Cargo Rs./ton Wheat Rs./ton Coal Rs./ton Crude, Diesel, Kerosene oil, Fuel Rs./1000 Litre Edible Oil Rs./1000 kg Molasses Rs./1000 kg Tractor, Tracked vehicle, etc. Rs./CBM Motor vehicle Rs./CBM Tyre, Tyre scrap, Accessories Rs./ton Food grain, fertilizer. Etc Rs./ton Food grain, flour and seed Rs./ton Fertilizer, rock phosphates ecl. Cow dung Rs./ton Container LCL Container (s) Rs./ton x 2 Size 20 ft Rs FCL Container (s) Rs./ft Size 40 ft Rs Empty Container (s) Rs./ft Over Size 40 ft Rs./ft Source: The Gazette of Pakistan, KPT Tariff 2-73

117 2.4.3 Administration of Port and Shipping Sector (1) General The Ministry of Ports and Shipping controls the administration of ports and shipping in Pakistan. The Director General of Ports and Shipping of MOPS is in charge of the overall administration of the various organizations related to ports and shipping. All practical works are conducted by organizations which are autonomous bodies under the control of the Director General of Ports and Shipping. (2) The Karachi Port Trust (KPT) KTP is based on the Karachi Port Trust Act of The highest decision-making organ is the Board of Trustees which consists of 11 members including the Chairman who is appointed by the Federal Government and other trustees are representatives of ship owners, shippers, port labours and the Government. Important matters such as the lease, sale and transfer of property, the general budget, major investments and the revision of port fees require prior approval by the Government. There are about 5,500 employees. Figure shows the organization chart of KPT. Chaiman Pub. Relations Officer Coordination Manager Law Officer Chief Secretary Manager Port Intelligence Auditor (O&M) Officer Gen. Manager Gen. Manager Gen. Manager Administration Operations Finance Gen. Manager Gen. Manager Gen. Manager Engineering Pl. & Develpmt. Civ. W. & Est. Source: KPT Figure Organization Chart of KPT At present, KPT is promoting privatization according to government policy, and the following privately operated terminals have been established: Karachi International Container Terminal (KICT) The terminal has been in operation since 1998 and it was originally leased out by KPT to APL, Pakistan on a BOT basis for 20 years. However, Hutchison Port Holdings have now taken over and are operating the terminal. Pakistan International Container Terminal (PICT). The terminal was operated by Premier Mercantile Services and was the first private terminal to be owned and operated by a Pakistani company. However, it was leased to Trustees of the Port of Karachi for 21 years commencing in June

118 (3) The Port Qasim Authority (PQA) PQA is based on the Port Authority Act of PQA controls the land, water area and various facilities inside the port area as prescribed by the Act. The highest decision-making organ is the Board consisting of not less than three and not more than seven members including the Chairman, who is appointed by the Government. As at the port of Karachi, PQA must obtain the prior approval of the Government concerning important matters at the Port of Qasim. PQA has approximately 1,600 employees. Figure shows the organization chart of PQA. Secretary Chairman Deputy G.M Internal Audit Director General (P&D) Director General Director General Director General Director General Director General (Technical) (Finance) (Administration) (Operations) Co-ordination Director General Manager (I.M) General Manager General Manager General Manager General Manager Dy. General Manager (Engineer) (Finance) (Administration) (Operations) (Establishment) Director General Manager (I.S) Chief Deputy General Dep. Gen. Manager Deputy General Deputy General Hydrographer Manager (M. Accts) (Transp. & Security) Manager (Mar. Ops) Manager (Store) Director General Manager (P&D) Deputy General Deputy General Deputy General Deputy General Deputy General Manager (Maint Ops) Manager (F. Accts) Manager (I.R &W) Manager (Cargo Ops) Manager (Coordination) Deputy G. Manager (P.S Project) Deputy General Deputy General Port Facilitation Deputy General Manager (B.W.S.S) Manager (E&S) Officer Manager (Training) Deputy G. Manager (Marketing & Deputy General Manager (Mech. Maint) Deputy General Manager (Civil Maint) Deputy General Manager (Elect. Maint) Source: PQA Deputy General Manager (M. P) Figure Organization Chart of PQA At present, PQA is promoting privatization for the port development, and the following privately operated terminals have been established: Iron Ore and Coal Berth (IOCB) This berth was built by PQA and has been leased to Pakistan Steel; PQA is responsible for maintenance. IOCB commenced operation in 1980 and the equipment for unloading and transferring the ore and coal to Pakistan Steel has been installed and is maintained by Pakistan Steel. The berth has been leased to Pakistan Steel. Qasim International Container Terminal (QICT) The agreement was signed in 1995 between PQA and a group of companies led by P&O Ports-Australia, and QICT commenced operation in Berth Nos. 5 to 7 of the marginal wharf including a 400 m back up space has been leased to the owners of QICT on a BOO basis. FOTCO Oil Terminal The agreement was signed between PQA and FOTCO in The terminal was constructed on a BOO basis and the charges for a minimum of four million tons of heavy furnace oil per year have been guaranteed by the Government of Pakistan. 2-75

119 Engro Vopak Terminal The agreement was signed between PQA and Engoro Chemicals, Pakistan and VOPAC Holland in The terminal was constructed on a BOO basis. Therefore, only Marginal Wharf berths Nos. 1 to 4 are under direct management of PQA. Berth No.1 is being used for liquid bulk handling and berths Nos. 2 to 4 for dry bulk. (4) Pakistan National Shipping Corporation (PNSC) PNSC is a shipping company, whose shares are mainly held by the Federal government. At the end of the fiscal year 2003/04, the Federal government held approximately a 90% share of the PNSC Financial Situation In the MTDF, from the fiscal year 2005/06 to the fiscal year 2009/10, an allocation of Rs.117 billion (Rs.13 billion under the public sector development programme and Rs. 104 billion under the self-financing and private sector financing programme) is envisaged for the development works of the Ports and Shipping sector. Most of the development works depend on the financial capacity of the implementing agencies and private financing. (1) Financial Status of KPT Table shows the trend in the financial status of the KPT. According to Table , the KPT consistently generates a surplus every year and the financial status of the KPT is stable. In particular, the revenues generated from investment activities sustain the financial stability of the KPT. In the fiscal year 2002/03, the investment revenue was equal to 76% of the operational revenue. The operational revenue amounted to Rs. 860 million and the investment revenue amounted to Rs. 3,623 million, which accounts for approximately 84% of the total surplus. Table Trend in the Financial Status of the KPT (Unit: Million Rs.) % per FY 1998/ / / / /03 Revenues (2002/03) (1) Revenues Cargo Handling 1,487 1,608 1,709 1,847 1,854 Cargo Storage 1, Ship Movement & Services 1,845 1,779 2,283 2,448 2,154 Property management Total 5,147 4,178 4,665 5,139 4, % (2) Expenses Labor 2,748 2,673 2,521 2,496 2,584 Repairs and Maintenance Other Operational expenses Depreciation Costs Total 4,388 4,309 4,321 4,007 3, % (3) Operational Profits (1)-(2) , % (4) Investment Revenues etc 1,791 2,090 2,499 2,925 3, % (5) Interest Payments % (6) Others* 1, % Total Surplus (3)+(4)-(5)-(6) 4,128 1,749 2,721 4,059 4, % * In the fiscal year 1998/99, items of prior year adjustment are included. Source: Karachi Port Trust Financial Statements 2-76

120 The KPT has enormous financial resources based on the surplus accumulated so far (Rs million at the end of the fiscal year 2002/03). This is invested in bonds issued by the Pakistan government. Table shows a list of the investments at the end of the fiscal year 2002/03. Table List of Investments of the KPT Type of Investments Amounts (Unit: Rs. Million) Rate of Profits Federal Investment Bonds 4,234 15% per year Pakistan Investment Bonds 6, % per year Defence Saving Certificate 5, % per year Others 1 - Total 16,780 - Source: Karachi Port Trust Financial Statements Table shows the revenue and expenditure budget of the KPT for the fiscal year 2004/05. As shown in the table, the investment revenue is estimated to be nearly Rs. 4 billion, which equates to 77% of the ordinary revenues. Table Budget of the KPT (2004/05) Items Rs. Millions % per Revenues (1) Revenues Cargo Handling 2, % Ship Movement and Services 1, % Cargo Storage % Property Management % Total 5, % 100.0% (2) Expenditures Labor 2, % Outsourcing of Repairs and Maintenance % Others 1, % Total 4, % 95.0% (3) Operating Surplus (1)-(2) % (4) Investment Revenues 3, % (5) Total Surplus (3)+(4) 4, % Sources: Prepared by JICA Study Team with Data from World Bank Based on the financial resources of the KPT, it is envisaged that there may not be any financial hazards in the development of Karachi Port. (2) Financial Status of the PQA In the MTDF, from the fiscal year 2005/06 to 2009/10, more than Rs.23 billions in investments is envisaged for Qasim Port, which includes Rs.13.5 of investments to be procured by private financing. In order to attract private investors, the profitability of the business in Qasim Port business is important. Table shows the trend in the financial status of the PQA. 2-77

121 Table Trend in Financial Status of the PQA (Unit: Million Rs.) FY 1999/ / / / /04 (1) Revenues Operational Income 1,509 1,570 1,768 1,730 1,924 Other Income Total 1,730 1,751 1,964 1,981 2,175 (2) Costs Salaries etc Administration Costs Maintenance Costs Depreciation Costs Others Total 891 1,387 1,491 1,529 1,274 (3) Operating Surplus (1)-(2) (4) Other Revenues (5) Other Charges (6) Net Surplus (3)+(4)-(5) ,089 Source: Qasim Port Authority Financial Statements The operational surplus of the PQA is stable, and the business related to the operation of Qasim Port seems profitable. According to Table , the PQA have continuously created a surplus in recent years. The PQA accumulated a financial surplus amounting to nearly Rs. 5 billion at the end of the fiscal year 2003/04. Consequently, the profitability of the Qasim Port business is likely to attract investors, and it is envisaged that there may not be any financial hazards in the development of the Qasim Port. (3) Financial Status of PNSC In the MTDF, from the fiscal year 2005/06 to 2009/10, an allocation of Rs.12 billion for development works is assumed to be funded by the PNSC. Therefore, the financial status of the PNSC is extremely important for the development of the shipping sector. Table shows the trend in the financial status of the Pakistan National Shipping Corporation (PNSC). Table Trend in the Financial Status of the PNSC (Unit: Million Rs.) FY 1999/ / / / /04 Operational Revenues 3,540 5,459 4,625 3,631 2,736 Operational Expenses 3,839 5,014 4,012 2,785 2,041 Operational Profits Other Income ,424 Other Expenses Profit before Taxation ,866 Taxation Profit after Taxation ,634 Source: Pakistan National Shipping Corporation Annual Report 2004 Up until the fiscal year 2000/01, the PNSC continually suffered from losses. However, in the fiscal year 2001/02, the PNSC reformed its business. One of the biggest changes was to discard unprofitable routes and concentrate its business resources on the profitable routes. With this reform, the PNSC began to make a profit from 2001/02. Subsequently, in the fiscal year 2003/04, the PNSC recorded a profit of Rs. 1.6 billion. Therefore, it is envisaged that there may not be any financial hazards in the development of the shipping sector under the current financial situation in the PNSC. 2-78

122 2.4.5 Issues and Problems In this section, the problem areas in the existing handling systems at the ports are identified together with a preliminary assessment of overall performance. (1) Karachi Port According to the KPT's records in 2003/04 the berth occupancy ratio maintained normal values. However, two berths, Nos. 22 and 23, were not used for cargo handling, despite the limited available space within the existing port area. Effective utilization of the existing facilities is required. At Karachi port, various kinds of cargo are being handled at conventional berth (except at berths Nos. 6 to 9 (PICT) and 28 to 30 (KICT)). This includes general cargo, fertilizer, rice, phosphate and scrap. The dry bulk carriers are being forced to moor for a long time at the berths due to the low cargo-handling productivity. Therefore, it is necessary to provide specialized dry bulk handling facilities. (2) Qasim Port Berth Nos. 2, 3 and 4 handle dry bulk cargo such as wheat, coal, sugar, and fertilizer. The major import is wheat, of which 1.1 million tons was handled in 2002/03. However, Qasim port does not yet have a specialized terminal for the handling of wheat and this fact is one of the main reasons for the long period of waiting and mooring times. Therefore, it is necessary to provide specialized dry bulk handling facilities. There is a restriction on night navigation at the Qasim port due to navigation facilities. Currently, vessels of LOA 202 m can be accommodated during the night on a request basis. Therefore, it is necessary to develop the navigation system as soon as possible. (3) Both Ports Neither port has introduced an EDI system. The computer system of both ports covers only management of vessel arrivals an departures but does not cover other operation and management works such as operation at conventional and container terminals. However, some shipping lines have already developed their own world-wide computer systems. The computer system is competent for processing statistics, however, neither port has fully utilized the potential of their systems. With regard to statistics, the present system covers only vessel statistics but these are not compiled periodically or systematically. Cargo statistics are not compiled at all. 2-79

123 2.5 Airport Airports and Air Traffic Control (1) Airports Airports in Pakistan can be divided into several categories. There are the airports used only by the Air Force, the airports administered by the Air Force but used by both Air Force and civil aviation, the airports administered by CAA (Civil Aviation Authority) and used by both the Air Force and civil aviation, and the airports administered by the CAA (Civil Aviation Authority) and used by civil aviation only. Based on the standards of ICAO, the issuance of AIP and the release of NOTAM are handled properly. Information on the maintenance of navigation facilities all over the country is also implemented correctly. Table is a list of the airport facilities. In the airports which are managed by the CAA, the maintenance of the facility is done under the CAA s budget and its main revenue comes from the landing fees and air navigation charges. Source : CAA Statistics of Pakistan / AIP Figure Airport Locations 2-80

124 Table Airport Condition and Facilities in Pakistan District Airport Administrative (m) Facilities Runway Navigation Aircraft Movement Passenger Cargo (t.) Category Quetta 2, ,425 1,346 JF I 3,658 X 46 NDB, VOR Gwadar 1,827 45, C I 1,524 X 23 NDB Jiwadar C R 1,783 X 46 Jiwani C F 1,783 X 46 NDB, VOR Khuzdar C F 1,829 X 30 NDB Panjgur 346 7, C R 1,524 X 23 NDB, VOR Balochistan Pasni JC R 2,743 X 46 NDB Sui 198 7,907 7 P P 1,524 X 46 Turbat 1,323 30,131 1 C R 1,829 X 30 NDB Zhob C R 1,829 X 30 NDB, VOR Dalbandin JC F 1,524 X 25 Ormara C F 1,524 X 23 NDB Sibi N 1,829 X 23 Karachi 44,005 4,870, ,202 C I 3,200 X 60 ILS,VOR,NDB 2nd R/W 3,400 X 60 Hyderabad C R 2,133 X 31 Moenjodaro , C R 1,981 X 30 NDB Sindh Nawabshah 8 - JC R 2,743 X 46 NDB, VOR Sukkur 2,179 84, JC R 2,743 X 30 NDB Jacobabad 286 2,860 4 JF F 3,048 X 31 Mipur Khas JF F 3,048 X 46 Talhar N 2,743 X 23 Islamabad 20,418 2,556,483 41,286 JF I 3,292 X 46 ILS,VOR,NDB Lahore 24,641 2,714,246 76,341 JC I 3,360 X 46 ILS,VOR,NDB 2nd R/W 2,743 X 46 Faisalabad 1, ,789 1,239 JC R 2,826 X 46 ILS,NDB Multan 4, ,131 1,484 JC R 2,743 X 30 ILS,VOR,NDB Punjab Mianwali JF F 3,048 X 46 Bahawarpur , C F 2,850 X 30 R.Y.Khan 1,060 38,170 C R 3,000 X 45 NDB, VOR Bhagtanwala N 1,920 X 46 Mangla N 1,524 X 31 North West Frontier Northern Area D.G.Khan C R 1,981 X 30 NDB Peshawar 7, ,599 10,406 JF I 2,743 X 46 NDB, VOR Chitral , C R 1,768 X 31 D.I.Khan 118 1,447 2 C R 1,524 X 23 NDB, C-VOR Saidu Sharif C R 1,829 X 46 NDB Bannu C R 1,829 X 30 NDB Kohat JF F 2,352 X 46 Parchinar N 1,219 X 23 Gilgit , C R 1,646 X 30 NDB Skardu , JC R 1,981 X 30 NDB Muzaffarabad C F 914 X 23 NDB Rawalakot C F 914 X 23 NDB Administrative: F=Air Force / C=CAA / JF=Joint but ATC by Air Force / JC=Joint but ATC by CAA Category:I=International Airport / R=Regular Airport / F=Feeder Airport / P=Private Airport / N=Non Oparation Source : CAA Statistics of Pakistan / AIP 2-81

125 (2) Air Traffic Control Service in Pakistan Terminal Air Traffic control at the airports and the Area Control over Pakistan are performed appropriately by the CAA. Area Control services are operated at Karachi and Lahor. These two places deal with the southern and northern part of Pakistan respectively. Most of the air space, which Pakistan CAA controls, is covered by the six radar facilities as shown in Figure The radar control is done appropriately. The CAA has training courses for the staff who take care of these control operations and the staff who take care of the maintenance of ATC facilities. These courses are administered according to the ICAO standards. Source : CAA Website / Statistics Figure CAA Radar Coverage Chart 2-82

126 2.5.2 Air Transport (1) Domestic Airline Network Figure (below left) shows the domestic airline network and the right figure shows the estimated passenger volume by air route in Pakistan. It is clear that the number of flights between Karachi and Islamabad / Karachi and Lahore are outstanding among domestic flights in Pakistan. Chitral Gilgit Chitral Chitral Gilgit Skardu Skardu Peshaw ar Kohat Saidu Islamabad Peshaw ar Islamabad Bannu Mianwali Zhob D.I.Khan Sargodha Fai salabad Lahore Faisalabad Lahore Quetta Quetta D.G.Khan Multan Bahawalpur Sui Rahimyar Khan Sui Panjgur Sukkur Moen jo Daro Panjgur Jiwani Turbat Pasni Karachi1 Khaskheli Hyderabad Thatta Badin Turbat Gw adar Saw an Pax/Year Karachi Source : Source : CAA Statistics of Pakistan / AIP Figure Domestic Flight Network and Number of Flight (2) PIA (Pakistan International Airline) In 1947, when Pakistan attained independence, PIA (Pakistan International Airline) was established with the support of the government. It has been developed as the flagship carrier of Pakistan. Even though there are now several private airlines operating after the private airline liberalization in 1992, PIA is still the biggest airline in Pakistan, and has been steadily expanding its operation. Figure shows PIA International Operation Route Source : PIA website Figure PIA International Flight Route

127 (3) Other Airlines As shown in Figure shows, after the Private Airline Liberalization in 1992, many airlines entered the industry. They are competing through the use of the latest technology such as on-line booking and E-tickets and the corresponding low costs. PIA Airline Aero Asia Shaheen Air Int'l. Royal Airlines Airblue Bhoja Raji Hajveri Safe Air Source : CAA Statistics of Pakistan Figure Time Line of the Commercial Airline Activity PIA carried 4.66 million passengers in 2003/04, accounting for 79.4% of domestic air passengers in Pakistan, followed by Aero Asia at 15.6%, Airblue at 10.1% and Shaheen Air International at 4.9% as shown in Table No of Passenger (Million) Airblue Royal Airlines Shaheen Air Int'l. Aero Asia PIA year Source : CAA Statistics of Pakistan Figure (4) Air Passenger Traffic Air Passenger Traffic by Airline (Domestic) Domestic flights in Pakistan carried 2.9 million passengers and 48,800 tons of cargo in 2003/04. Passenger transport volumes in terms of revenue passenger kms (RPKs) were 2.4 billion RPKs in 2003/04, which was a tenth of the passenger transport by rail, and a hundredth of the passenger transport by road. Cargo cartage was very small at 49,000 ton-kms. Passenger traffic on domestic flights reached a peak volume of 4.5 million in 1995/06, and then decreased rapidly to 2.5 million in 2001/02. Since 2001/02, the passenger traffic has been increasing at an annual rate of 7.7% as shown in Figure Passenger traffic on international flights did not experience a sharp decrease and has recently shown a steady increase. 2-84

128 Domestic International Number of Passenger (Million) Year Source: CAA Statistics of Pakistan Figure Air Passenger Traffic in Pakistan Figure shows the percentage of total passengers by airport in Pakistan. The four major airports (Karachi, Islamabad, Lahore and Peshawar) have 85% of the total air passengers in Pakistan, as shown in Figure Quetta; 2% Faisalabad; 1% Others; 3% Multan; 2% Peshaw ar; 6% Karachi; 42% Islamabad; 21% Lahore; 23% Figure International Passengers by Airport Figure and Figure show the trend in domestic and international passenger at the four airports. The number of domestic passengers at the four airports decreased during the period of 1995/ /02 and began to increase in 2001/02 except for Peshawar Airport as shown in Figure

129 Islamabad Karachi Lahor Peshawar No of Passenger (Million) Source : CAA Statistics of Pakistan Figure Domestic Passengers at Four Major Airports Although the number of international air passengers is increasing as mentioned above (Figure 2.5.9), Karachi Airport was losing international air passengers in the 1990s while the traffic at other airports increased as shown in Figure The traffic at Karachi Airport began to increase in 2001/02, as well as the recovery of domestic passengers in 2001/02. Islamabad Karachi Lahore Peshawar No of Passenger (Million) Source : CAA Statistics of Pakistan Figure International Passenger at Four Major Airports Air cargo traffic has been increasing steadily, except for a slight decrease in domestic air cargo in the 1990s when it had been slightly decreased, as shown in Figure

130 Domestic International 250, , , ,000 50, Cargo (Tons) Year Source : CAA Statistics of Pakistan Figure Total Cargo at all Airports Administration of Aviation Sector Currently, the Pakistani airport facilities are managed by the Pakistani Civil Aviation Authority (CAA) and the Air Force. The CAA is under the administration of the MOD (Ministry of Defence) but deals only with civil aviation. It performs ATC (Air Traffic Control) at civil airports and maintenance of airport facilities. Major capital comes from the government. The PIA, which is a major airline in Pakistan, is currently implementing its privatisation plan. The government still holds more than 50% of the PIAs outstanding shares., however it is managed as a private organization. The ASF is the Airport Security Force under the MOD (Ministry of Defence), which has the responsibility for aviation safety. The number of airlines has been increasing since privatisation. Now, other than the PIA, there are 4 airlines operating scheduled domestic and international flights. There are also sporadic service airlines as well. (1) CAA (Civil Aviation Authority) The CAA is organized under the MOD and was established in 1982 to promote safe operation and to develop transportation to meet the increase in air traffic increase. The CAA is responsible for planning, construction/improvement and maintenance of airport facilities such as runways, aprons, terminal buildings, cargo buildings and air navigation systems, and for the provision of air safety facilities such as fire fighting and rescue facilities. It also acts as the aeronautical authority to enforce aviation rules and regulations including aircraft development in the country. (2) ASF (Airport Security Force) In Pakistan, originally, the MOD (Ministry of Defence) used to administer all the airports as a part of the military facility. In 1976 the MOD started the ASF (Airport security force) as an organization, under the administration of the MOD, which takes responsibility for the security of all airports and aircraft passengers. 2-87

131 2.5.4 Financial Situation In the airline sector of Pakistan, there are two implementing agencies: Civil Aviation Authority (CAA) and Pakistan International Airlines Corporation (PIAC). The CAA is a governmental autonomous body, which is in charge of airport operations. The PIAC is a national airline company, whose shares are mainly held by the Government of Pakistan. At the end of the fiscal year 2004 (ended December 31, 2004), the Government of Pakistan held 87% of the PIAC stock. In the MTDF, from the fiscal year 2005/06 to 2009/10, more than Rs.130 billions in investments is envisaged for the airline sector, which includes Rs.17.4 billions in investments to be procured by the CAA, and Rs billion for aircrafts to be procured by the PIAC. (1) Financial Status of the CAA The CAA will make an investment of Rs.17.4 billion during the MTDF to complete a programme using its own financial resources. Table shows the trend in the financial status of the CAA. Table Trend in the Financial Status of the CAA (Unit: Million Rs.) Fiscal Year 1995/ / / / /2000 (1) Revenues Operational Income 2,759 3,098 3,321 3,754 4,122 Non-Operational Income ,103 Total 3,398 3,774 4,138 4,591 5,225 (2) Expenditures Administrative Expenses 1,386 1,742 1,605 1,925 2,441 Repair & Maintenance Depreciation Financial Charges ,125 1,029 Others Taxation Total 2,924 3,420 3,306 3,546 4,858 (3) Surplus (1)-(2) , Sources: Data from World Bank The CAA controls the domestic airport and international airports in the main cities, such as Karachi, Lahore, Islamabad, Peshawar and obtains revenue from airplane operators through those airports. According to Table 2.5.2, the financial status is stable, and the surplus is continuously positive. In the MTDF, the CAA plans to develop a new Islamabad Airport, the cost of which is estimated to be Rs.12.8 billion. The CAA plans to finance the development from bank consortiums and international capital markets. It is envisaged that there may not be any financial hazards for the developments as the financial condition of the CAA is stable. The CAA charges the airlines, which use airport and air traffic control services in Pakistan. This is the major income of the CAA. Table shows the Navigation Aid usage charge and Table shows the Landing Charge and Housing Charge. 2-88

132 Table Navigation Charge for Over Flight in Pakistan Exceeding 1 Ton But not 40 Tons Navigation Charge for Over Flight in Pakistan Weight of Aircraft (Tons) Exceeding 40 Ton Exceeding 120 Ton But not 120 Tons But not 160 Tons (per flight) Exceeding 160 Ton But not 250 Tons Exceeding 250 Tons US$208 US$273 US$313 US$352 US$417 Source : CAA Statistics of Pakistan Not Exceeding 1 Ton Table International Flight (Weight of Aircraft) Exceeding 1 Ton But not 250 Tons Landing Charge Exceeding 250 Tons (per ton) Non-International Flight (Weight of Aircraft) Not Exceeding Exceeding Exceeding 1 Ton 250 Tons 1 Ton But not 250 Tons International US$ US$ 7.00 US$ Rs Rs Rs Airport Domestic Airport Rs Rs Source: CAA Statistics of Pakistan Karachi / Islamabad / Lahor Table Not Exceeding 1 Ton Exceeding But not 250 Tons 1 Ton Aircraft Housing Charge Aircraft Housing Charge (per tons) INTERNATIONAL FLIGHT NON-INTERNATIONAL FLIGHT Weight of Aircraft (Tons) Weight of Aircraft (Tons) Not Exceeding Exceeding 1 Ton Exceeding 250 Tons But not 250 Tons 1 Ton Exceeding 250 Tons US$3.14 US$3.14 US$36.00 Rs.1.00 Rs 1.00 Rs 3.60 All Other Rs.0.90 Rs.0.90 Rs.2.70 Source : CAA Statistics of Pakistan In addition, the CAA charges a passenger service charge at airports as shown in Table The Passenger Service Charge is included in air tickets. Table Passenger Service Charge Domestic International Flight Passenger Economy Business First Rs. 100 Rs. 400 Rs. 600 Rs. 800 Source : CAA Statistics of Pakistan 2-89

133 (2) Financial Status of PIAC In the MTDF, Rs billion for aircrafts is to be financed by the PIAC. The investments depend on the financial resources of the PIAC. Table shows the trend in the financial status of the PIAC. Up until the fiscal year 2001, the financial status of the PIAC was in a critical condition. In the fiscal year 2001, the total liabilities exceeded the total assets, and the accumulated loss amounted to nearly Rs. 13 billion. In order to resolve this problem, from the fiscal year 2000 to 2002, the PIAC changed the management and rationalized the organization (including the abolishment of unprofitable routes) with the financial assistance of the government. The financial status of the PIAC began to improve from the fiscal year 2002, and consequently, the profit after tax became positive. Table Trend in the Financial Status of the PIAC (Unit: Million Rs.) FY (1) Operational Income Passenger 32,433 36,646 35,977 40,613 49,207 Excess Baggage 1,025 1,002 1, Freight 3,520 4,063 3,908 3,962 4,554 Mail Charters Others 2,052 1,575 1,982 1,529 2,198 Total 39,228 43,608 43,674 47,952 57,788 (2) Cost and Expenditures Personal Costs 10,460 7,784 7,984 8,320 9,444 Aircraft Fuel and Oil 12,321 12,211 9,336 11,605 17,319 Depreciation 2,569 2,651 4,503 3,303 4,189 Others 16,683 20,597 16,274 19,346 24,920 Total 42,033 43,242 38,097 42,574 55,872 (3) Profit from Operation(1)-(2) -2, ,577 5,378 1,916 (4) Other Income ,187 (5) Finance Cost and Provision etc 3,054 2,864 3,755 2,342 3,266 (6) Profits before Tax (3)+(4)-(5) -5,146-1,882 2,111 3, (7)Tax ,401 1,469 (8)Profits after Tax (6)+(7) -5,155-2,206 1,873 1,298 2,307 Source: Pakistan International Airline Corporation Annual Report Based on the current financial status, the PIAC is going to obtain new aircraft or replace its existing aircraft. The detail of the PIAC s investment is shown in Table As described in Table 2.5.8, most of the investments are to be financed, based on the financial credibility of the PIAC. It is envisaged that there may not be any financial hazard for the investments from the PIAC. 2-90

134 Table Details of Investment Financed by the PIAC Year Items Method Amounts (USD Million) A Lease Lease from Other International 75 Operating Companies 7 New Turbo-Prop Purchase To be Financed by Manufacturer Boeing LR Purchase To be Financed by the Banks Boeing LR Purchase Based on the Coordination of Boeing LR Purchase Boeing / 6 Narrow body Twinjet Lease / Details have NOT Been Decided Purchase 2009/ 2 Narrow body Twinjet Lease / Details have NOT Been Decided Purchase Total 1,770 Source: MTDF and Interview Survey with PIAC Issue and Problems In the northern mountain area of Pakistan, the high altitude area is monitored by the radar. Most of the low altitude areas are not contactable by radar. Therefore, in the future, the improvement in air traffic control systems such as the introduction of an ADS (Automatic Dependent System) which uses the satellite or VDL (VHF Data Link) should be considered. Islamabad Airport is experiencing a sudden increase in the number of air passengers and the cargo, however, the facility is not equipped for handling this increase. Consequently, there is a plan to move to the new airport and the opening of the new airport is urgently needed. The airports at Peshawar and Multan are also facing an increase in air passengers, however the terminal buildings are not large enough to deal with the large number of air passengers, and this is causing an inconvenience to passengers. Prompt expansion is needed. 2-91

135 Chapter 3. SOCIO-ECONOMIC FRAMEWORK 3.1 Regional Structure and Transport (1) Regional Structure Pakistan has a strong corridor of concentrated economic activity along the Grand Trunk Road (N-5, Peshawar-Islamabad/Rawalpindi-Lahore) and a portion of N-5 (Lahore Karachi). The distance between Peshawar and Lahore is approximately 440km, and it is approximately 1,300km between Lahore and Karachi. Traffic volume along N-5 is estimated to account for 38% of the total intercity traffic in Pakistan in terms of vehicle-km (PTPS JICA Study Team). In addition to the corridor, other large cities are located throughout Punjab Province. Punjab Province has over half of the total population of Pakistan. In addition, Quetta is the provincial capital of Balochistan and plays an important role as a gateway to Afghanistan. Although Quetta-Karachi is an important international route, the current population density is very low. Figure illustrates the regional structure mentioned above. Peshawar Peshawar-Lahore Corridor Islamabad/ Rawalpindi Quetta Lahore N25 Populated area in Panjub Lahore-Karachi Corridor Karachi Figure Major Cities and Corridors (2) Regional Transport Passenger and freight movement reflects the regional structure mentioned above. Figure illustrates the distribution pattern of passenger and freight transport. It is observed that passenger transport concentrates in Punjab, and major passenger trips are found between the large cities. There is a high intensity of freight movement on the corridor along N-5, and it is clear that Karachi is the most important transport node where a large number of freight trips generate from and concentrate to. This demonstrates the fact that the international trade of Pakistan is solely concentrated around the only major port in the country, namely, Karachi, which accounts for over 90% of Pakistan s import and export. Therefore, there is a high demand on transport infrastructure for freight movement between the regions and the port for international trade. Because of this, the country has to bear the long-distance land transport and high transport costs. 3-1

136 Passenger Flow in 2005 (>500trips) Commodity Flow in 2005 (>2000 tons) Note: These figures were created from PTPS O/D Tables (3) National Trade Corridor Figure Transportation Flow in Pakistan, 2005 The Government of Pakistan has recently started the National Trade Corridor Improvement Program (NTCIP) for speedier and economical delivery of import and export goods. The National Trade Corridor (NTC) consists of all transport modes in Pakistan, and the NTCIP will reduce the transport cost for foreign trade by improving the NTC that goes through the territory of Pakistan between Karachi and Peshawar. The development of the NTC will accelerate the regional development along the corridor. (4) Transport in Rural Area In Pakistan, over two-thirds of the population live in small rural villages, whereas the remaining one-third live in a few large cites with population in the millions. Due to historical reasons and lack of regional planning, there are a few medium size conurbations in Pakistan. These small to medium size cities are concentrated along major highways as ribbon developments. They act as access centres for smaller villages and provide goods and services that are available in major cities. The rural two-thirds of the population generate approximately a quarter of the countries GDP in terms of primary sector output. The industrial output, in terms of the GDP, is almost the same as the primary sector and is concentrated in the few large cities. The tertiary sector accounts for the remaining half of the GDP, and is also concentrated in the major cities. The diversity of output locations for primary and secondary sectors and the un-even population distribution requires a considerably intense movement of goods for local consumption between cities and rural areas. 3.2 Population and Labour Force Population (1) Past Trend The population of Pakistan is officially estimated at million, to be the 6 th largest national population in the world (Table 3.2.1). However, the national population figures from different sources do not tally due to different ways of estimation and different coverage. The first population census was taken after the World War II, in 1951, and followed by the census in 1961, 1972 and the latest one in

137 According to the old census, the annual growth rate of the population was lower than 2.0% in Following this, mortality declined sharply, but fertility did not accompany this change. Consequently, the annual population growth rate increased to 2.5% in 1961 and 3.6% in Since the 1970s, the Government has been making efforts to implement an intensive family planning programme. Thereby, the fertility and birth rate started to decline, and the population increase was lowered to the average rate of 2.6% during the inter-censal period of In the MTDF, the population growth rate was estimated to be below 2.0% for the first time in 2003 and in 2005 at 1.87%. (Table 3.2.2) Table Population and Rate of Birth, Death and Increase Mid-Year Population Crude Birth Crude Death Annual Rate of (Million) Rate(per mill) Rate(per mill) Increase (%) * Source :Pakistan Economic Survey, , Statistical Appendix, P93 * Population in 2005 is estimated in MTDF2005 (Part 2,Chapter 9 P9-1) Table Census Year Change in population and Growth Rate in Pakistan Population (million) Average annual Intercensal Population Growth Rate (%) Percentage Intercensal Increase (%) * * * Source : MTDF, Chapter 7 Note : * Estimated by MTDF (2) Future Population The MTDF asserted that reducing the population growth rate is a basic prerequisite for Pakistani economic growth through improving labour productivity and accelerating social development. Table shows the MTDF demographic targets, which aims at lowering the population growth rate down to 1.63% by 2010 by raising the contraceptive prevalence rate from 36% in 2005 to 51% in

138 Year Total Fertility Rate (TFR), % Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Table MTDF Demographic Targets Crude Birth Rate (CBR),% Crude Death Rate(CDR), % Rate of Growth (%) Contraceptive Prevalence Rate Source: MTDF, Chapter 7 In the period from 2005 to 2010, the total fertility rate is expected to decline by 23% from 3.50% to 2.70%, while the crude birth rate will drop only 13% due to the high momentum, and as the crude death rate is also decreased, the population growth rate will be lowered from 1.87% to 1.63%. In order to extrapolate the population trend, a linear equation was determined using population growth rates observed between 1992 and 2010 (growth rates between 1992 and 2004 are estimates, and those between 2005 and 2010 are targets). (Figure 3.2.1) R = t (r = 0.986) Where: R: Annual population growth rate (%) t : Year Although the regression line shows a good fit for the period of input data, it may be risky to use the equation directly for a period longer then 20 years as it causes the growth rate to decline annually by a constant value (below 1.0% in the year of 2021 and at 0.47% in 2030). However, the growth rate will hardly become lower than 1.0% in years. Consequently, the equation was only applied up to the year 2015, and after 2015 the gradient of the regression line was divided by 2.0 every five years, to make the line level off towards the value of 1.0% (Figure 3.2.2). Crude Birth and Death Rate (per mill) Crude Burth Rate Crude Death Rate Auual Growth Rate Year Annual Population Growth Rate (%) Source: Elaborated by Study T eam based on Census data & MT DF data Figure Linear Regression on Annual Population Growth Rate 3-4

139 250.0 Population Annal Growth Rate 2.50 Population (million) Annual Growth Rate (%) 0.00 Year Source: Elaborated by Study Team based on Census data & MTDF data Figure Future Population Growth Rate and Population, Table Projected Population of Pakistan, Year Population Growth Population Growth Population Growth Year Year (million) Rate (%) (million) Rate (%) (million) Rate (%) Source: JICA Study Team Based on the said assumption, the future population of Pakistan was forecasted (Figure and Figure 3.2.4). Population will exceed 200 million by 2023 and reach 216 million or 1.4 times the present population in Based on the 1998 census, the United States Census Bureau made a long-term projection of Pakistani population which is shown in Table Compared to the PTPS projection, the population projected by the US Census Bureau is slightly higher (4.1million or 1.8% in 2030). Table Population Projection by US Census Bureau Year Population (million) Source: US Census Bureau 3-5

140 (3) Regional Distribution Geographically, the population of Pakistan is unevenly distributed as shown in Table and Figure The two provinces of Punjab and Sindh contain 78% of the total population, while the other provinces (with 57% of national land) contain only 22% of the population. Table Regional Population in Census Year In 1000 population Region/ Urban Population Rural Population Total Population Province Islamabad Punjab 9,183 13,052 23,019 28,428 34,241 50,602 37,610 47,292 73,621 Sindh 5,726 8,243 14,840 8,430 10,786 15,600 14,156 19,029 30,440 NWFP 1,196 1,665 2,994 7,193 9,396 14,750 8,389 11,061 17,744 Balochiostan ,569 2,029 3,655 4,997 2,429 4,332 6,566 FATA ,478 2,199 3,091 2,491 2,199 3,176 Pakistan 16,594 23,841 43,036 48,716 60,412 89,316 65,310 84, ,352 Note: not inclusive of the population of AJK and Northern Area Source: Pakistan Economic Survey , Statistical Appendix P.95 Figure clearly shows the concentration of population in the corridor along the Indus, its tributaries and the corridor from Lahore to Peshawar via Islamabad/ Rawalpindi. According to the 1998 census, about one person out of three lives in an urban area. This urban population ratio has been steadily growing from 25 % in 1972 and 28 % in Most of the urban population live in Punjab and Sindh. The most populous city is Karachi (9.3 million in 1998), followed by Lahore (5.4 million), Faisalabad (2.0 million), Rawalpindi (1.4 million), Multan (1.2 million), Hyderabad (1.2 million), Gujranwala (1.1 million) and Peshawar (1.0 million). Quetta, the capital of Balochistan had a population of 0.6 million in Provincial population was projected by extrapolating the 1998 population using the growth rates and then adjusting the projected population to meet the total forecast population of Pakistan. Table shows the projected provincial population. Table Projection of Provincial Population, Province Islamabad 805 1,119 1,441 1,832 2,278 2,884 3,559 Punjab 73,621 86,110 93,335 99, , , ,516 Sindh 30,440 36,005 39,466 42,680 45,149 48,641 51,083 NWFP 17,744 21,012 23,059 24,966 26,441 28,519 29,986 Balochiostan 6,566 7,596 8,143 8,613 8,911 9,390 9,644 FATA 3,176 3,602 3,785 3,925 3,981 4,112 4,141 Pakistan 132, , , , , , ,928 Source: JICA Study Team The forecasted provincial population was further subdivided into traffic zones which were composed by combining several adjacent districts (taking into consideration their geographically homogeneous nature). The results are shown in Table and illustrated in Figure The population distribution was forecast based only on the past trend and did not take into account any large-scale investments for regional development, except for the Gwardar area development in Balochistan. The total population of Pakistan is expected to exceed 200 million in 20 years with an increase of about 50 million, of which 51% will occur in Punjab, 26% in Sindh and 16% in.nwfp together with FATA. Balochistan and Islamabad are projected to experience the same increase of 1.8 million, respectively. The trend in zone-wise distribution clearly shows that significant increases are observed in 3-6

141 zones of the provincial capitals or zones of large cities, while rather moderate increases are observed in other zones. This indicates that an intensive migration from rural to urban area will continue in the future. N.W.F.P Islamabad/ Rawalpindi Balochistan Punjab Sindh 800 to 1,000 (1) 200 to 400 (3) 0 to 200 (2) Peshawar 50,000,000 25,000,000 5,000,000 UrbanPop RuralPop Islamabad/ Rawalpindi Lahore Quetta Karachi Poplation 98 3,000,000 1,500, ,000 Pop to 500,000 (13) 600 to 800 (3) 400 to 600 (20) 200 to 400 (20) 0 to 200 (51) Source: Elaborated by Study Team using 1998 Census data Figure Population Distributions and Density,

142 Table Future Population by Traffic zone (1,000 persons) Traffic Zone Census Population Estimated and Forecast Population No. Zone Name Malkand 1,238 1,523 2,660 3,275 3,630 3,969 4,243 4,619 4,901 2 Swat 888 1,233 2,199 2,731 3,046 3,350 3,604 3,948 4,215 3 Mansehra 2,069 2,701 3,506 3,820 3,997 4,125 4,162 4,277 4,283 4 Mardan 1,204 1,507 2,487 2,992 3,262 3,508 3,689 3,951 4,123 5 Peshawar 2,492 2,730 4,805 5,936 6,595 7,227 7,744 8,450 8,986 6 Kohat 1,145 1,412 1,982 2,230 2,388 2,522 2,604 2,738 2,806 7 Bannu ,527 1,817 1,966 2,098 2,189 2,326 2,409 8 D.I.Khan ,521 1,811 1,960 2,092 2,184 2,321 2,405 Subtotal NWFP 10,635 13,000 20,685 24,614 26,844 28,891 30,422 32,631 34,127 9 Islamabad 1,982 2,462 4,169 5,041 5,598 6,133 6,574 7,177 7, Attok ,275 1,448 1,537 1,611 1,651 1,723 1, Jhelum 1,285 1,435 2,021 2,265 2,382 2,472 2,510 2,596 2, Gujrat 1,899 2,255 3,209 3,611 3,810 3,966 4,039 4,189 4, Sargodha 1,558 1,912 2,666 2,976 3,121 3,229 3,269 3,371 3, Khushab ,016 1,070 1,111 1,129 1,168 1, Mianwali 1,096 1,377 2,108 2,445 2,635 2,802 2,916 3,090 3, Sialkot 2,344 2,711 3,989 4,551 4,848 5,096 5,241 5,489 5, Gujranwala 2,060 2,676 4,234 4,978 5,418 5,819 6,113 6,542 6, Sheikhupura 1,657 2,110 3,321 3,896 4,234 4,540 4,762 5,088 5, Faisalabad 4,248 4,696 7,051 8,113 8,696 9,196 9,513 10,024 10, Jhang 1,555 1,971 2,834 3,204 3,391 3,541 3,617 3,763 3, Lahore 3,774 5,073 8,695 10,565 11,773 12,944 13,923 15,254 16, Sahiwal 2,684 3,549 5,363 6,187 6,643 7,038 7,295 7,701 7, D.G.Khan 1,142 1,583 2,747 3,355 3,752 4,141 4,470 4,916 5, Muzaffagath 1,565 2,164 3,757 4,589 5,133 5,665 6,116 6,726 7, Multan 4,160 5,409 8,448 9,880 10,713 11,461 11,995 12,788 13, Bahalnagar 1,074 1,374 2,061 2,372 2,541 2,687 2,779 2,928 3, Bahawalpur 1,071 1,453 2,433 2,928 3,240 3,538 3,779 4,112 4, Rhahim Yan Khan 1,399 1,841 3,141 3,809 4,239 4,654 4,999 5,469 5,835 Subtotal Punjub 37,845 47,570 74,426 87,229 94, , , , , Loralai ,041 1,098 1,141 1,160 1,199 1, Quetta ,501 1,921 2,145 2,361 2,540 2,781 2, Chagai Dera Bugti 682 1,036 1,619 1,883 1,983 2,058 2,089 2,158 2, Khuzdar ,141 1,244 1,300 1,340 1,350 1,385 1, Gwadar ,026 1,068 1,133 1, Lasbela Subtotal Balochistan 2,431 4,333 6,566 7,596 8,143 8,613 8,911 9,390 9, Shikarpur 1,232 1,596 2,285 2,575 2,705 2,802 2,837 2,924 2, Larkana 921 1,139 1,927 2,327 2,568 2,794 2,973 3,219 3, Sukkur 862 1,134 1,900 2,285 2,514 2,728 2,894 3,124 3, Dadu 811 1,082 1,669 1,940 2,083 2,206 2,284 2,407 2, Khairpur ,547 1,814 1,960 2,089 2,176 2,307 2, Nawabshah 1,365 1,667 2,190 2,383 2,514 2,615 2,659 2,753 2, Sanghar ,422 1,675 1,815 1,940 2,027 2,156 2, Tharparkar 1,016 1,502 2,483 2,970 3,255 3,518 3,717 3,997 4, Hyderabad 1,626 2,022 2,834 3,167 3,406 3,611 3,743 3,950 4, Badin ,193 1,358 1,480 1,591 1,671 1,787 1, Thatta ,113 1,266 1,378 1,480 1,554 1,660 1, Karachi 3,607 5,438 9,856 12,244 13,786 15,306 16,614 18,356 19,760 Subtotal Sindh 14,156 19,029 30,420 36,005 39,466 42,680 45,149 48,641 51,083 Pakistan Total 65,067 83, , , , , , , ,928 Source: JICA Study Team 3-8

143 Population (1000) 120, ,000 80,000 60,000 40, ,000 0 Islamabad/Punjab Sindh NWFP/FATA Balochistan Peshawar Islamabad Rawalpindi Quetta Lahore Multan Karachi 5,000 Thousand year 05 year 15 year 25 Figure Future population Increase by Province and Traffic Zone 3-9

144 3.2.2 Labour Force and Employment (1) Labour Force As shown in Table 3.2.9, the labour force rate has been rising in Pakistan, reaching the current rate of 30%. This is due to the change in age-structure and participation of the female population. However, 30% is still low compared with south-east Asian countries attaining a steady economic growth. The labour force rate will continue to rise and MTDF foresees the rate will reach 31.2% in 2010 (shaded area in Table 3.2.9). The unemployment rate is currently very high at 7.7%. MTDF aims at gradually lowering this rate to 4% by Year Population Table Trends of Labour Force and Employment Working Age Population Labour Force Employed Working Age Pop. Rate Labour Force Rate Unemployed Unemployment Rate (million) (million) (million) (million) (million) (%) (%) (%) Source: Labour Force Survey by Federal Bureau of Statistics and MTDF In order to forecast employment levels up to the year 2030, the followings two assumptions were made: The labour force rate will continue to increase at the same pace as during and reach 34.2% in The unemployment rate will be maintained at 4% after Accordingly, employment in 2030 will be 71 million or 1.64 times the level of employment in 2005, while total population will increase 1.41 times (Table ). Therefore, Pakistan has to create 28 million working opportunities in 25 years. The agricultural sector appears to have a limited capacity for new job creation and the consequently the majority of the new workers will have to be absorbed in the secondary and tertiary sectors. This will also accelerate the concentration of people in urban areas Year Population Table Future Labour Force and Employment Working Age Population Labour Force Employed Unemployed Working Age Pop. Rate Labour Force Rate Unemployment Rate (million) (million) (million) (million) (million) (%) (%) (%) Source: JICA Study Team 3-10

145 (2) Employment by Sector Based on the industrial classification in Table , the sectoral composition of employment was forecast based on the provincial characteristics in 2002 (Table ), and the past and future trend of shares in the industrial sector (Table ). In order to make the sum of provincial employment and the sum of the employment by sector tally with the national total, an iteration process was taken. The results are shown in Table and Figure Commodity Producing Sectors Service Sector Table Primary Sector Secondary Sector Tertiary Sector Source: MTDF and JICA Study Team Industry Classification in Pakistan 1. Major Crops 2. Minor Crops 3. Livestock 4. Fishing 5. Forestry 6.Mining & Quarrying 7. Manufacturing 8. Construction 9. Electric and Gas & Water Supply 10. Transport, Storage & Communication 11. Wholesale & Retail Trade 12. Finance & Insurance 13. Ownership of Dwellings 14. Public Administration & Defence 15. Community & Social Services Table Employment Composition by Province in 2002 Sector Punjub NWFP Balochistan Sindh Pakistan Primary Sector Secondary Sector Tertiary Sector Total Source: Labour Force Survey, 2002 Table Change in Employment Composition by Industrial Sector Year/Period Primary Secondary Tertiary Sector Sector Sector Total Source: MTDF and JICA Study Team 3-11

146 Table Employment by Industrial Sector and by Province Item Year Punjab NWFP Balochistan Sindh Pakistan ,229 20,920 6,566 30, , ,777 24,614 7,596 36, ,229 Population ,645 26,844 8,143 39, , ,687 28,891 8,613 42, , ,116 30,422 8,911 45, , ,075 32,631 9,390 48, , ,886 4,820 1,779 8,735 43, ,428 5,982 2,130 10,580 50,120 Employed ,708 6,718 2,352 11,942 55, ,429 7,429 2,556 13,269 60, ,772 7,966 2,693 14,294 65,725 Primary Sector Secondary Sector Tertiary Sector ,555 8,748 2,905 15,766 70, ,546 1, ,288 18, ,812 2, ,552 19, ,234 2, ,722 20, ,349 2, ,843 20, ,579 2, ,843 20, ,563 2, ,944 20, , ,740 8, ,867 1, ,134 10, ,966 1, ,511 12, ,024 1, ,911 13, ,308 1, ,270 15, ,563 1, ,768 17, ,414 1, ,707 15, ,749 2, ,895 20, ,509 3,152 1,103 5,709 23, ,057 3,590 1,242 6,514 26, ,885 3,951 1,350 7,181 29, ,429 4,424 1,492 8,053 32,398 Source: MTDF and JICA Study Team N.W.F.P Balochistan Punjab Sindh 5,000 2, Primary Secondary Tertiary Figure Employment Composition by Industrial Sectors in

147 3.3 Economic Growth Past and Recent GDP Growth Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Since the 1980s, the economy of Pakistan has been performing well except for the period of which was badly affected by the global financial crisis, attaining % of the 5-year average growth rate. Of particular note is GDP growth of 8.4% per annum in 2004/5. The increase in GDP between 1980 and 2004 is made up of the primary sector (20%), secondary sector (26%) and tertiary sector (54%), respectively. Over the same period, the primary sector decreased its share of the total GDP by 3.1% and the secondary and teriary sectors increased by 1.9% and 1.2%. 7,000 6,000 5,000 4,000 3,000 2,000 1, GDP at 2004/05 price (billion Rp) Tertiary Secondary Primary Source: Pakistan Economic Survey, 1985/6 2004/5, elaborated by Study Team Figure Trend of GDP Growth by Sector Table Past Performance of Economic Growth (Billion Rs. at 2004/05 price) GDP Primary Sector Secondary Sector Tertiary Sector Year Billion Average Billion Compo- Billion Compo- Billion Composition (%) (Rs) Growth (Rs) sition (%) (Rs) sition (%) (Rs) Rate (%) , , , , , , , , , , , , , , , , Source: Elaborated by Study Team based on Pakistan Economic Survey, Projection of Economic Growth Due to the recent good performance in economic growth, the Government is aiming for high growth rates over the MTDF period, starting at 7.0% in 2005/06, becoming higher year by year up to 8.2% in 2009/10. The average growth rate over the five years is 7.6%. As the investment and financial markets are expanding, it is possible that the target may be attained. However, such a high growth is hardly sustained for a long period. The JICA Study Team has prepared three scenarios for the macro-economic framework: 1) High growth scenario: To maintain the average rate of MTDF of 7.6% for 20 years after 3-13

148 ) Medium growth scenario: The growth rate of 7% will continue until 2010/11, and then start to decline by 0.5% every five years 3) Low growth scenario: The growth rate of 7.0% will decline by 0.5% every year until 2010/11, and will then gradually drop to 3.0% in the year Table and Figure show the economic growth rates under each scenario. Table Economic Growth Scenarios Year Annual Growth Rate (%) High Medium Low 2005/ / / / / / / / / / / / / Source: JICA Study Team Annual Growth Rate (%) Low Case High Case Medium Case Figure Economic Growth Scenario Under these conditions, the Pakistan economy will grow as shown in Table and Figure In the 20 years until 2025, the Pakistan economy will expand by 3.3 times in High Case, 2.5 times in Medium Case, and 1.7 times in Low Case. Accordingly, GDP per Capita will rise from Rs. 42,213 (US$700) to Rs. 139,000 (US$ 2,300) for High Case, Rs. 108,000 (US$1,800) for Medium Case and Rs. 75,000 (US$1,250) for Low Case. The JICA Study Team used the medium case as the planning base. Table Projection of GDP and GDP per Capita by Scenario Population High Case Medium Case Low Case Year (million) GDP GDP per GDP GDP per GDP GDP per (Rs. Billion) Capita (Rs.) (Rs. Billion) Capita (Rs.) (Rs. Billion) Capita (Rs.) ,559 42,213 6,559 42,213 6,559 42, ,513 56,214 9,199 54,361 8,531 50, ,721 75,460 12,604 69,319 10,379 57, , ,304 16,867 87,195 12,627 65, , ,386 22, ,652 15,363 75, , ,381 28, ,110 18,691 86,438 Note: Projection by JICA Study Team 3-14

149 GDP (Billion Rp.) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 High Medium Low Year Note: Projection by JICA Study Team Figure Projection of GDP by Scenario 3.4 Freight Transport Demand Analysis of Major Commodities (1) Oil and Petrol Products Pakistan does have some oil reserves and produces crude oil. However, there is an enormous gap between local production and demand: Pakistan imported 7.8 billion tonnes of crude oil in while the export of crude oil was 0.1 billion tonnes in the same year (Pakistan Energy Yearbook). The consumption of oil products is depicted in Figure The figure shows that the demand for oil products, mostly petrol and diesel, is insatiable, and is increasing almost unabatedly with the exception of furnace oil, for which demand dropped almost to the half in 2003/04. The demand for kerosene oil has been continually decreasing over the years due to the availability of sui (natural) gas for cooking. Also, the amount of kerosene is relatively small compared to the demand for petrol and diesel Kerosene Furnace Oil Diesel Petrol Figure Consumption of oil products in Pakistan (tonnes/year) 3-15

150 (2) Agricultural Products The agriculture sector accounts for about 90% of the country s primary sector GDP and in it is estimated to be just over 23% of the GDP. It employs about 43% of the labour force and provides a livelihood for close to two-thirds of the population. The key agricultural products of interest are those which are essential: wheat and rice as the main staples, maize as animal fodder, and other major cash crops such as cotton and sugarcane. Growth in the agriculture sector growth has been quite variable over the last decade. There are many reasons for these variations, however the main ones are: weather conditions, drought, pest control, effective use of available water, availability of treated and higher quality seeds, and use of fertilizers. Table and Table show the recent trends in the production of the major agricultural products. Crops have increased at a rate of 4.0% p.a. while meat, milk and fish have shown a slightly less growth of 2.8% p.a. Table Production of Crops ( ) 000 Tonnes Items Actual ACGR (%) Grains 25,986 24,310 25,890 26, Wheat 19,024 18,226 19,183 19,500 Rice 4,803 3,882 4,479 4,848 Basmati 1,629 1,999 2,304 2,522 Others 3,174 1,883 2,174 2,326 Maize 1,643 1,664 1,737 1,897 Other Cereals Cash Crops 46,366 50,787 54,694 56, Cotton (Lint) 1,820 1,803 1,737 1,709 (Million Bale) (10.7) (10.6) (10.2) (10.05) Sugarcane 43,606 48,042 52,056 53,491 Tabacco Pulses Gram Others Oil Seeds 4,085 4,080 3,951 4, Cottonseed 3,640 3,606 3,473 3,418 Rape & Mustard and Canola Sunflower Others Vegetables 6,089 5,990 6,254 6, Potato 1,666 1,731 1,946 1,938 Onion 1,563 1,385 1,428 1,449 Other vegetables 2,860 2,874 2,880 3,028 Fruits 5,892 5,900 5,742 5, Total* 89,039 91,661 97, , Note: * 1 Bale = 0.25 ton Source: MTDF 3-16

151 Table Production of Meat, Milk and Fish 000 Tonnes Items Actual ACGR (%) Meat 2,015 2,072 2,134 2,212 2, Beef 1,010 1,034 1,060 1,087 1, Mutton Poultry Milk 26,284 27,055 27,811 28,624 29, Fish Inland Marine Total 28,929 29,765 30,504 31,400 32, Source: MTDF (3) Cement and Building Materials The cement industry in Pakistan has endeavoured to produce enough cement for local consumption. When a shortfall has occurred, cement has been imported to meet local demands. Figure presents the variation in the production of cement over the last decade. It can be seen that the production of cement has been steady over the last decade, at around nine million tons per annum. However, the recent rapid growth in economic activity has generated a higher demand for cement leading to higher output from old plants and new plant(s) coming on line. The overall average growth was just over 5% from 1995 to ,000 Tonnes (,000)/ Yaer 11,000 8,000 5, Source: Pakistan Statistics Figure Production of Cement in Pakistan The demand for other building materials such as bricks and sand is generally met by local production. There is no export or import involved. Although these commodities are commonly transported by road, the travel distances are considered to be relatively short. The growth in demand for building materials would generally follow the economic trends, and confidence in the economy as whole. With the forecast of high growth in the economy, demand for such commodities would also rise inline with the economic growth. 3-17

152 (4) Manufactured Goods The proportion of manufactured goods in the volume of freight transported has been increasing as industrialization proceeds. Table shows the export trends for the major industrial products. Table Export Trends for Major Industrial Products (US$ million) ACGR (%) Textile 5,756 5,778 7,225 8, Leather Chemical Engineering Goods Others Total 7,449 7,497 9,094 9, Source: MTDF The export of manufactured goods has thus increased at a higher rate than the GDP of Pakistan. If Pakistan s economy grows at a considerably higher rate than the past decade, then the export of manufactured goods will increase rapidly. This is caused by the synergy of the rising share of the manufacturing industry and the high elasticity in the production of this industry to the entire economic growth, i.e. GDP. Although this analysis does not necessarily show that the transport demand increases according to the export of manufactured goods, its higher growth should be duly taken into account in the transport demand forecast Suggested Growth of Freight Transport Demand up to 2025 Table summarizes the growth rates (ACGR) assumed in MTDF for production, consumption and export of selected goods. In general, higher growth is assumed for industrial goods rather than agricultural products and raw materials. Also in MTDF, land transport demand for freight is assumed to grow at an average annual rate of 6.3% (10.0% for railway and 6.1% for road) as shown in Table For the same period, MTDF assumes a growth of GDP at 7.6% a year. This means that the elasticity of land freight traffic demand against GDP is less than 1.0. The growth rate of land freight traffic demand assumed in MTDF seems to be a little underestimated due to the following reasons: A. In the past, the land traffic volume has increased at an average annual rate of 8.6% in terms of ton-km from 1990/91 to 2003/04. This is higher than the growth rate of GDP which was % during the same period. B. Taking into account the future structural change of Pakistani industries which is only reflected in MTDF, the freight transport demand is likely to increase faster than that projected by MTDF. This is particularly true on a ton-km basis, because the growth of industrial products which move in larger spheres will be higher than agricultural products and raw materials which tend to move within local production/consumption areas. In conclusion, it is reasonable for PTPS to assume a future demand growth of land freight transport slightly higher than GDP on a ton-km basis, and the same or slightly lower than GDP on a ton basis, as exemplified in Table

153 Table Growth of Production, Consumption and Export assumed for Selected Goods in MTDF, 2004/ / ACGR (%) POL Products Demand (million tons) Agricultural Products (thousand tons) - Grains 29,476 35, Cash Crops 49,050 61, Pulses 1,041 1, Oil Seeds 5,844 7, Vegetables 6,988 10, Fruits 6,000 9, Meat 2,275 3, Milk 29,472 43, Fish Export of Major Industrial products (US$ million) - Textile 8,999 14, Leather 790 1, Chemical 300 1, Engineering Goods Cement Source: MTDF Table Freight Traffic Growth Assumed in MTDF ACGR (%) Freight Traffic (Million ton-km) Railway 4,800 8, Road 138, , Total 143, , Source: MTDF Table Likely Growth of Land Freight Transport Demand ACGR (%) Ratio (2025/2005) Ton-km Basis Ton Basis GDP Growth (Medium Case) Note: Assumption by JICA Study Team 3-19

154 3.5 Future Motorization Increase of Vehicles (1) Car No. of Cars (1000) 2,000 1,500 1, The historical trend in the number of vehicles in Pakistan fits well with the trend in GDP as shown in Figure The linear models in Table were obtained by regression analysis and the correlation coefficients were high enough to use the models for the projection. Using the medium growth case, stated in the section 2 of this chapter (4.2), for the future economic growth, the future numbers of vehicles were estimated by the models as shown in Figure and Table Actual Theoretical 0 3,500 4,000 4,500 5,000 5,500 6,000 6,500 GDP (Rs. Billion) (2) Truck No. of Trucks (1000) Actual Theoretical 0 3,500 4,500 5,500 6,500 GDP (Rs. billion) (3) Bus No. of Buses (1000) Series1 Series2 0 3,500 4,000 4,500 5,000 5,500 6,000 6,500 GDP (Rs. Billion) Source: JICA Study Team Figure Correlation between Number of Vehicles and GDP Table Regression Equation of Number of Vehicles on GDP Vehicle Correlation Regression Equation Type Coefficient (R) Car Y = Ln(X 1 ) Ln(X 2 ) Truck Y = X Bus Y = X Y: No. of Vehicle (1000unit), X 1 : GDP (Rs million at 2005 price), X 2 : Dummy variable (1.0 for year 1996 to 2000 and 1.0 for other years) Source: JICA Study Team No. of Vehicles (1000 unit) 6,000 5,000 4,000 3,000 2,000 1,000 Car Truck Bus Year Source: JICA Study Team Figure Future Increase of Vehicle Fleet in Pakistan In 2005, the number of cars used in Pakistan is estimated at 1.9 million and this is predicted to increase to 4.6 million, 2.4 times the present quantity, by In the same way, the number of trucks is predicted to increase by 3.9 times from 293,000 units to 1,152,000 units and the number of buses is predicted to increase by 4.0 times from 126,000 units to 511,000 units. 3-20

155 Table Future Vehicle Fleet in Pakistan (1,000 unit) Year Car Truck Bus Total , , , , , , , , , , ,567 1, , ,104 1, ,256 Source JICA Study Team Investment in Truck Fleet and Bus Fleet The cost to increase the number of trucks and buses to the level forecasted above was estimated, taking into account both the new demand and the renewal demand. Table shows the weighted average of market prices for trucks and buses to be Rs 2.11 million for a truck and Rs million for a bus, respectively (at 2005 prices). Table Average Price of Truck and Bus Vehicle Type Weight Price (Rs.) Average price (Rs.) Pickup , ,378 Truck 2Axle ,750,000 1,015,540 Truck Truck 3Axle ,300, ,432 Tanker ,650, ,481 Total ,117,830 Mini-Bus ,117 Bus Bus ,162,063 Total ,995,179 Source: JICA Study Team The net increase in the number of trucks from 2005 to 2030 is 1,196,000 units. If the average life of a truck is assumed to be 12 years, all the existing vehicles (293,000 units) will need to be replaced and in addition, all trucks newly purchased between 2006 and 2013 will also need to be replaced by In the same manner, all trucks newly purchased before 2019 will need to be renewed by Thus, the cumulative number of trucks to be renewed by 2030 is calculated at 1,055,000 units (Table 3.5.4). The total number of trucks to be procured in 25 years is 2,251,000 units and total cost is approximately Rs.4,700 billion. With regard to buses, the new demand in 25 years is forecasted at 537,000 units and the renewal demand is calculated at 462,000 units, resulting in a total cost of Rs.3,000 billion. The total cost of trucks and buses will reach Rs 7,800 billion (US$ 130 billion). Most of this huge amount will be invested not by the government sector, but by the private sector. The future fleet size and the cost (investment amount) will be a basis for the development of policy on transport business and administration activities. Table Required Fleet and Investment in Trucks and Buses Truck Bus Period Required Fleet (1000 unit) Investment Required Fleet (1000 unit) Investment New Renewal Total (Rs. Billion) New Renewal Total (Rs. Billion) , , ,196 1,055 2,251 4, ,991.0 Source: JICA Study Team 3-21

156 Chapter 4. TRANSPORT DEMAND PROJECTION 4.1 Demand Forecast Methodology Process of Demand Forecast As the model for the previous JICA Study was found to provide a good projection of traffic demand, the same approach as the previous study was applied for the demand forecast. The previous JICA Study projected transport volumes in 2005/06 to be 339 billion passengerkm (BPK) and 89.3 billion ton-km (BTK). On the other hand, the estimated volumes will be lower than the actual ones in 2005/06, which was estimated at BTK in the MTDF. However, considering the difference between the estimated GDP and actual GDP, the forecast model for passenger transport can project the future transport volume well. Using a regression analysis, the future passenger-km and ton-km of land transport were estimated as a control total for growth scenarios. Meanwhile, the future trip distribution (passenger and freight O/D tables) was estimated using the four-step forecast method, and passenger-km and ton-km were calculated from the O/D tables. Subsequently, the O/D tables were adjusted so that the passenger-km and ton-km coincide with that of the control total. The traffic volume on roads was calculated based on the adjusted O/D tables using the traffic assignment model. Figure illustrates the process adopted for the demand forecast. Future O/D Trip Generation/ Attraction (Passenger and Freight) Transport Volume Indicators Passenger-kms and ton-kms Fratar Method Trip Distribution (Passenger and Freight O/D) Modal Split Passenger and Freight O/D by Mode (tentative) Adjustment Passenger and Freight O/D by Mode Traffic Assignment Traffic volume of road and rail network Figure Process followed for the Demand Forecast Traffic demand for air transport was estimated separately because the impact of air transport on land transport was expected to be low in the future. 4-1

157 4.1.2 Traffic Survey A reliable nationwide vehicle O/D matrix, representing an origin-destination pattern of vehicle trips in a country, is valuable information for the projection of traffic demand. In order to make the nationwide O/D matrix for Pakistan, the Study Team carried out a nationwide traffic survey during August and September The survey consisted of a Roadside O/D Interview Survey (RIS) at 100 locations, a Manual Classified Traffic Count Survey at the same 100 locations and other supplemental surveys. The survey locations were selected from the points where major roads cross district boundaries in accordance with the zoning system applied in PTPS. The survey was undertaken over a period of 16 hours, between 6:00 and 22:00. From RIS, more than 75,000 samples were collected, and the average sampling rate amounted to 34.9%. Districts are the minimum level of information on origins and destinations in the RIS data Zoning System The demand forecast for road transport was carried out based on the PTPS Zoning System, with 45 traffic analysis zones including 39 zones in Pakistan and 6 zones in the external area as shown in Figure A district is the minimum unit of a traffic analysis zone. Since it is necessary to catch all of the traffic crossing the borders of the traffic analysis zones, districts were merged when too many roads were found to cross the boundary between them. The list of districts for each traffic zones is shown in Table Afghanistan, Kabul China Iran Afghanistan, Kandahar India, North India, South Figure PTPS Zoning 4-2

158 Table Traffic Analysis Zone and District Traffic Zone District Traffic Zone District Province No. Name Name Code Province No. Name Name Code NWFP 1 Malakand Malakand 174 Panjab 20 Multan Multan 261 Upper Dir 175 Vehari 262 Lower Dir 176 Khanewal 264 Swat 177 Lodhran 265 Chitral Bahawalpur Bahawalnagar 282 Bajaur Agency (TA) 180 Bahawalpur 281 Shangla Rahim Yar Khan Rahim Yar Khan Mansehra Abbottabad 141 Balochistan 23 Loralai Zhob 421 Haripur 142 Killa Saifullah 422 Mansehra 143 Loralai 423 Kohistan 151 Musakhel 424 Bat Gram 152 Barkhan Peshawar Peshawar Quetta Quetta 411 Nowshera 112 Pishin 412 Charsada 113 Qilla Abdullah 413 Khyber Agency (TA) Chagai Chagai 414 Mardan Dera Bugti Sibi 431 Swabi 122 Kohlu 432 Bunar 123 Derabuqti 433 Mohmand Agency (TA) 181 Ziarat Kohat Kohat 131 Nasirabad 441 Hangu 132 Jafarabad 442 Karak 133 Bolan 443 Orakzai Agency (TA) 134 Jhalmagsi 444 Kurram Aqency (TA) Khuzdar Kalat Bannu Bannu 171 Khuzdar 452 Lakki 172 Kharan 453 North Waziristan (TA) 173 Awaran D.I. Khan Dera Ismail Khan 161 Mastung 455 Tank 162 Turbat/ Kech 461 South Waziristan (TA) 163 Gwadar 462 North 7 Gilgit Gilgit Northern Areas 471 Panjgoor 463 Area Azad Jamu & Kashmir Lasbella Lasbella 456 Panjab 8 Islamabad Islamabad 211 Sindh 28 Shikarpur Shikarpur 322 Rawalpindi 212 Jaccobabad Attock Attock 213 Larkana Jhelum Jhelum Sukkur Sukkur 311 Chakwal 215 Ghotki Gujrat Gujrat Dadu Dadu 334 Mandi Bahauddin Khaipur Khairpur Sargodha Sargodha Nawabshah Nausheroferoz Khushab Khushab 222 Nawabshah Mianwali Mianwali Sanghar Sanghar 344 Bhakkar Tharparkar Mirpur Khas Sheikhupura Sialkot 253 Tharparkar 342 Narowal 254 Umer Kot 343 Gujranwala Hyderabad Hyderabad 331 Hafizabad 256 Badin 332 Sheikhupura Thatta Thatta Faisalabad Faisalabad Karachi Karachi 351 Toba Tek Singh 233 Jhang 232 Traffic Zone 16 Lahore Lahore 241 No. Name Code Kasur 242 Foreign 44 India (Panjub) Sahiwal Okara India (Sind) 502 Sahiwal Afghanistan (Kabul) 511 Pakpattan Afghanistan (Kandahar) D.G.Khan Dera Ghazi Khan Iran 521 Rajanpur China Muzaffaragarh Muzaffargarh 272 Layyah 274 Source: JICA Study Team 4-3

159 4.1.4 Making the Present O/D Matrices (1) Overall Steps The O/D matrices of road traffic for passenger and freight were created according to the steps shown in Figure RIS & MCC (100 sites) Site O/D (100 sites) District-wise O/D Matrix TAZ O/D Matrix (Road) Figure Overall Steps for Creating O/D Matrices (2) Site O/D Matrix A Site O/D Matrix means an O/D matrix at each survey site, having information of origin, destination, the number of vehicles by vehicle type, the number of passengers by vehicle type, and freight volume by commodity category 1. The vehicle and passenger O/D were created from field data by multiplying each interview record by multiplying expansion factors at each site. The average payload of truck by vehicle type by commodity type was calculated from RIS data, and was used to calculate the freight volume in a Site O/D Matrix. In principal, the field data should be adjusted by several factors such as daily fluctuation and seasonal fluctuation. However, since there are not enough traffic data to estimate such fluctuation factors in Pakistan, the field data were directly applied to make Site O/D Matrices. (3) District-wise O/D Matrix If the boundary of a TAZ forms a cordon line, the O/D table relating to the TAZ can be directly calculated by adding up O/D tables on the cordon line. On the other hand, an O/D pair can be calculated using several lines that can catch the all traffic relating the O/D pair as shown in Figure In such case, each O/D pair between two districts was calculated as the average of O/D pairs on such kind of lines ( screen line ), and a district-wise O/D matrix was produced from all O/D pairs. This O/D matrix includes not a few blanks because not all inter-district traffic was recorded in the RIS Commodity types in RIS are grouped into 30 categories. 4-4

160 Line-1 Line-2 Line-3 B Line-4 The O/D pair between A Zone and B Zone can be calculated using Line-1, Line-2, Line-3, and Line-4. This creates four different O/D pairs that must be equal ideally. A Survey Point Figure Example for O/D Pair Calculation (4) TAZ O/D Matrix The O/D matrix for a traffic analysis zone (TAZ) was produced from the district-wise O/D matrix by merging district zones. Figure illustrates desired lines taken from the O/D matrix, based on the PTPS zoning system (45 zones). Figure Vehicle Trip Distribution (2005) 4-5

161 4.1.5 Comparison of O/D data Figure shows the number of vehicle trips calculated in JICA Studies for 1985/86, 1992/93 and 2005 (PTPS). The vehicle trips increased from 69,896 trips/ day in 1985/86 to 152,502 trips/ day in 1992/03 and 277,353 trips in 2005 as shown in Table Although an annual growth rate of 5.1% shows a similar increase in passenger-km and freight ton-km, the increase in the number of bus trips is very high at 9.9% while that of trucks is low at 2.1%. '000 trips/day / / Car Bus Truck Table Comparison of Vehicle OD Tables Figure Vehicle Trips (Trips/day) Year Car Bus Truck Total Survey ,100 17,587 19,209 69,896 JICA ,054 16,026 44, ,643 NTRC ,377 22,389 53, ,502 JICA * 5.1% 9.9% 2.1% 5.1% ,328 69,236 68, ,353 PTPS Note: 1) * Figures with % show annual growth rate. 2) PTPS Data of the year 2005 is regarded as the data of ) Zoning system is different among NTRC, the previous JICA Study, and PTPS Figure illustrates the number of passenger and freight trips by road. The number of passenger trips by road increased from 1.48 trips/day in 1992/93 to 2.24 trips/day in 2005 at an annual growth rate of 3.5%. The lower growth rate for passenger trips than for bus trips reflects the significant increase in minibuses (wagons) compared to large buses. The volume of freight being transported increased from 322 tons/day in to 710 tons/day in 2005 at an annual growth rate of 6.8%. The higher growth rate is due to the increase in the average load per truck from 6.0 tons /truck to 10 tons/ truck. Passenger Freight 000 trips/day tons/day / / / / Figure Passenger Trips and Freight Trips (Road) 4-6

162 4.2 Projection of Transport Volume Indicators Overall Land Transport Demand Passenger-km and ton-km have been estimated as important indicators of transport volumes for transport demand analysis and strategic targets for the transport sector in Pakistan. The average growth rate of passenger-km in the period was higher (at 4.8%) than that of ton-km (at 4.4%). The growth rates had been higher than the GDP growth rate prior to 2000/01, while they were lower than the GDP growth rates over the recent four years as shown in Figure The average growth rates for passenger-km and ton-km between 1994/95 and 2000/01 were 5.8% and 5.2%, respectively. For the same two measures the growth rates between 2000/01 and 2003/04 were 3.4% and 3.2% respectively. Since these indicators have a strong relationship to GDP, passenger-km and ton-km were estimated using a regression model FY93-94 FY94-95 FY95-96 FY96-97 FY97-98 FY98-99 FY99-00 FY00-01 FY01-02 FY02-03 FY03-04 Passenger Freight GDP Note: Passenger-km and Freight ton-km are taken from Economic Survey, Figure Increase in Land Transport Volume and GDP (1.0 in FY94-95) The regression model for projecting passenger-km used data for the past 20years between 1980/01 and 2003/04 as shown in Figure Million Passenger-Kms 300, , , , ,000 50,000 0 y = x R 2 = GDP (billion Rs.) Source: Economic Survey 2004 (Passenger-kms), JICA Study Team (GDP) Figure Regression Analysis for Passenger-Kms As freight transport showed a sharp increase in the late 1990 s unlike passenger transport (refer Figure in Chapter 2), the recent data between 1993/94 and 1994/95 was used to estimate the slope of the linear model. Values from 2001/02 to 2004/04 were not used 4-7

163 because they did not appear to follow the trend. The linear with the same slope intersecting the point of 2003/04 was applied as the projection model for freight transport as shown in Figure ,000 Million Ton-kms 100,000 50,000 y = x R 2 = / / /03 same slope Projection Model GDP (billion Rs.) Source: Economic Survey 2004 (Passenger-kms), JICA Study Team (GDP) Figure Regression Analysis for Ton-Kms The projection model was used to estimate the future transport volumes based on the medium growth scenario as shown in Table Year Table Projection of Land Transport Demand Passenger-kms (Million Passenger-kms) Ton-kms (Million Ton-kms) x + 12, (x 5,657) + 119,040 X (billion Rs.) GDP at 04/05 price , ,660 6, , ,881 9, , ,268 12, , ,185 16, ,135, ,037 22, ,466, ,787 28,135 Annual Growth Rate 05/06 10/ % 7.97% 7.00% 10/11 25/ % 6.44% 6.00% Source: JICA Study Team Inter-zonal Transport Volume Inter-zonal transport is that which crosses traffic zone boundaries, and has been incorporated into demand forecast models in the previous JICA Studies (1983, 1998, and 1995). The inter-zonal transport volume is less than the overall transport volume both in terms of passenger-km and ton-km. As a whole, the proportion of inter-zonal transport to the overall transport volume tends to decline as shown in Table The sharp drop in the proportion between 1992/93 and 2005/06 is the result of an unnatural increase in freight ton-km in 1992 and

164 Table Share of Interzonal Traffic (%) Passenger-kms Ton-kms Road Rail Total Road Rail Total * * Source: NTPS JICA in 1983, 1988, and 1995, and this study Note: * Assumption It is expected that the large cities will continue to grow and the number of trips will increase within traffic zones at a higher rate than inter-zonal trips. On the other hand, trade and industrial trips will also grow at a rate that will be able to support economic growth. Therefore, the proportion of inter-zonal trips will decrease to some extents; however this is anticipated to be at a low rate. The future inter-zonal transport volume is projected using the estimated proportion of inter-zonal transport as shown in Table Table Projection of the Future Interzonal Transport (Million Passenger-kms/ Million Ton-kms) Passenger-kms Ton-kms Total Interzonal Ratio Total Interzonal Ratio , , , , , , , , ,135, , , , ,466, , , , Source: JICA Study Team 4.3 Future O/D Table Trip Generation and Attraction The volumes of passenger trips and freight trips were based on the estimation of Regional Gross Domestic Products (RGDP), assuming that the volumes will increase in proportion to the increase in RGDP. The volume at each traffic zone was adjusted by the estimation of the total passenger-km and ton-km Trip Distribution Tentative future OD matrices were estimated by the fratar method using the present O/D matrices and the estimated trip generation and attraction. Passenger-km and ton-km were calculated from the tentative matrices and adjusted to meet the estimated volume of inter-zonal transport. In order to convert passenger volumes and freight volumes to the number of vehicles, it was assumed that the present modal share, passenger occupancy rate, and average loading of a truck will be the same in the future. Figure illustrates the results from the projection of the trip distribution. 4-9

165 Passenger Trip Distribution Freight Trip Distribution Figure Desired Line of Road Transport (Projection) 4-10

166 4.3.3 Modal Share between Road and Rail (1) Past Trend of Railway Transport Passenger transport by rail in passenger-km increased at an annual rate of 3.5% from to Although this was lower than the annual growth rate of passenger transport by road (which was 5.0% in the same period), passenger transport by rail showed steady growth in the last ten years. On the other hand, freight transport decreased in the same period at an annual rate of 2.1%. The volume reached its lowest level at 3.75 billion ton-km in 1999/2000, and began to increase at an annual growth rate of 6.0% over recent years (Figure 4.3.2) Freight ton-km Passenger-km Source: Pakistan Railways Figure Increase in Transport Volume by Rail (1.0 in ) This does not necessarily mean that demand for freight transport by rail is essentially small, because transport demand by rail is strongly affected by the level of service of the railway system. (2) Comparison of Transport Cost between Road and Rail a) Unit Cost In order to realize the system optimization that minimizes the total transport cost, rail and road should properly share the entire transport demand in accordance to their characteristics of cost performance. Research on optimization and policy measures to guide the demand toward the optimal share are essential for a successful multi-modal transport system. Comparison of unit costs between railway and road transportation can give a suggestion for realization of the optimal modal share. Table shows the unit costs1 of the PR under the current situation. According to Table 4.3.1, the unit costs for both passenger services and freight services are calculated at around Rs In this analysis, the Unit Costs are assumed to be composed of the Ordinary Working Expenses and the Allocation of Depreciation Reserve. 4-11

167 Table Unit Costs of PR 1999/ / / / / 04 Rs. Million Averag e (1) Ordinary Working Expenses Administration 1,439 1,526 1,527 1,618 1,999 1,622 Repair & Maintenance 4,099 4,220 4,744 5,294 5,344 4,740 Operational Staff Costs 1,216 1,205 1,248 1,383 1,498 1,310 Operational Fuel Costs 1,870 2,581 2,710 3,290 3,652 2,820 Others 1,193 1,339 1,086 1, ,120 Sub Total 9,817 10,871 11,315 12,682 13,377 11,612 (2) Appropriation to Depreciation Reserve ,200 1,200 1,076 (A) Total* 10,810 11,865 12,309 13,882 14,577 12,689 (B) Costs for Passenger Services 8,960 9,657 10,024 11,425 12,026 10,419 (C) Costs for Freight Services 1,850 2,207 2,284 2,457 2,550 2,270 (D) Passenger-Kilometres (Million) 18,498 19,590 20,783 22,306 23,045 20,844 (E) Ton-Kilometres (Million) 3,753 4,520 4,573 4,820 4,769 4,487 Unit Costs (Rs.) Rs. Rs. Rs. Rs. Rs. Rs. (B)/(D) Unit Costs for Passenger Services (C)/(E) Unit Costs for Freight Services * The total costs are divided into the costs for passenger services and freight services in proportion to the ratio of train kilometres of each business unit. Sources: Prepared by JICA Study Team with Data from P.R. Yearbook 2000/01, 2003/04 On the other hand, in the road transport that is a competitor of the railway transport, the unit costs excluding infrastructure costs can be estimated at Rs. 2.5 for passenger services and Rs. 1.5 for freight services. Table shows a rough calculation of unit costs of road transport. Table Unit Costs of Road Transport Unit Cost per Person per KM Type of Vehicle Car Mini Bus Bus Total (1) Average Number of Person (2) Assumed Costs per km (Rs.) (3)=(2)/(1) Average Costs per Person per km (Rs.) (4) Percentages of Vehicle Type 60.6% 24.5% 14.9% 100.0% (5)=(3)*(4) Weighted Average Costs per Person per km (Rs.) Unit Cost per Ton per KM Type of Vehicle Truck (6)Average Ton 16.0 (7) Assumed Costs per km (Rs.) 24.5 (8)=(7)/(6)Assumed Costs per Ton per km (Rs.) 1.5 Sources: Prepared by JICA Study Team with Data of the O/D Survey Even if the unit costs of road transport do not include the infrastructure costs, the unit costs of the railway transport are cheaper than those of road transport 1. Therefore it can be concluded that the railway business has sufficient price competitiveness. 1 Assuming that the construction of one kilometre of road costs Rs. 15 million, the unit costs including depreciation costs of the road are calculated at Rs. 2.6 in the passenger services and Rs. 1.7 in the freight services. 4-12

168 b) Transport Cost by Distance The unit cost of freight transport per kilometre by rail (Pakistan Railways) is calculated at Rs from ordinary working expenses and depreciation of the Pakistan Railways as shown in Table The ordinary working expenses consist of administration, repair & maintenance, operation fuels, operation staff, and other expenses. Table Calculation of Transport Cost per Kilometre by Rail Average ordinary working expense and depreciation (2000/01-03/04) Average train kilometres (2000/01-03/04) Train Operating Cost per train-km Average Tons carried by train (2000/01-03/04) Transport unit cost by rail per kilometre (a) (b) (c) = (a)/(b) (d) (c)/(d) Rs. Million Million train-km Rs. per train-km Tons per train Rs. /ton /km 13, P.R. Yearbook P.R. Yearbook - P.R. Yearbook - Note: PTPS calculation with data from Pakistan Railways Yearbooks The vehicle operating costs of a truck carrying 15 tons of cargo was estimated at about Rs. 21 per kilometre (Refer to Annex G). From this, the unit cost of freight transport by road can be estimated at Rs. 1.4 /ton/km. Loading and unloading costs of a truck are roughly in the range of Rs. 50 to 80 per ton. It is assumed that those costs of a railway are in the range of Rs. 30 to 48 per ton. Freight transport by rail requires additional loading and unloading by feeder trucks. Figure illustrates the transport costs by road and rail by distance. The costs include operating costs, maintenance & management costs, and loading& unloading costs. Cargo holding costs at warehouses or terminals are excluded. On this basis, it can be said that distances between km are in the competitive range. Source: JICA Study Team Figure Comparison of Economic Cost between Truck and Railway 4-13

169 c) Tariff A comparison of tariffs between trucks and railways also gives some views of the modal share. As can be seen in Figure 4.3.4, the railway tariff is advantageous for all kinds of commodities over 440km, even including loading and unloading charge. Figure Comparison between truck tariff and railway tariff (3) Possible Demand for Freight Transport by Rail Considering the cost analysis mentioned above, railway has the advantage of saving the economic costs of freight transport for a long distance about over 500km. According to the PTPS Traffic Survey, 1/4 of freight transport by road is the long distance transport over 500km as shown in Figure This means that Pakistan bears higher transport cost than is possible with an adequate modal shift from road to rail. It is desirable that the 1/4 of cargos be transported by rail. At least, 11% of cargos, whose travel distance exceed 1,000km, should be carried by rail. The pie chart in Figure illustrates the proportion of ton-km of freight transport by road by distance. This shows that freight transport over a distance of 500km account for 62% of the total in terms of ton-km. These charts imply that freight transport demand by rail is very high. Source: PTPS Traffic Survey Figure Proportion of Freight Transport Volume by Road by Distance 4-14

170 (4) Target Modal Share of Freight Transport Estimating the modal share of freight largely depends on the extent to which the railway will be improved as the existing railway capacity is insufficient. The economic cost analysis shows that the economic cost of freight transport by rail for 1,000km is only 30 40% of that by road transport, even inclusive of feeder transport cost and loading/ unloading cast at terminals. The cost analysis for tariff shows that transporting freight by rail is advantageous where the transport distance is over 440km. This is consistent for all kinds of commodities and takes into account loading and unloading costs. In the light of the cost analysis, PTPS sets a target modal share as follows: Table Target Railway Share of Freight Transport by Transport Distance Year 1,000km 2,000km % 50% % 80% Note: PTPS Recommendation The logit choice model was applied to make a function that calculates the railway share by travel distance of freight transport. The formula is: P R = 1 1+ exp( U U ) (4.1) where T R P R = Railway share U T = Utility function of truck transport U R = Utility function of rail transport Considering the economic cost by travel distance in Figure 4.3.3, PTPS applied the following formulas as the utility functions above: U T = c( 1.4x + a) + K, U R = c( 0.51y + b) x = Travel distance of freight transport by road (km) y = Travel distance of freight transport by rail (km) a, b, c: Constant values K = ln(500/x) 2 where x <500, K = 0 where x >= 500 From this, the exponent portion in (4.1) works out to be: U U = c( 1.4x y + a b) K. T R + In the formulas, 1.4 and 0.51 are the slopes of the lines of road and rail in Figure The constant values of a, b, and c are calculated so that the target modal share in Table can be obtained from the formulas. The calculated constant values are: Table The Model Parameters for the Modal Share Calucation c a - b Note: PTPS Calculation When the distance travelled is the same between road and rail, the formula illustrates the conversion curves as shown in Figure

171 % km Figure Conversion Curve of Railway Using the conversion formula, the future railway demand was estimated as shown in Table The railway transport volume in ton-km is expected to grow over six times higher by 2015 and 20 times by The target modal share is one third of the total interzonal transport (ton-km) in Table Future Potential Demand of Railway (Interzonal) Freight Traffic (million ton/ year) * 1 Transport Vol. (billion ton-km/year) Total Road % % % % Rail 7 * * 3 2.9% 8.8% 15.0% 6.1% Note: Figures with % are composition of each mode of the total. Note: Freight Traffic (million tons/ year) was estimated using the average trip length. Note: *2 : 6.79 in , JICA Estimation Note: *3 : 6.12 in , MTDF % % % % 4-16

172 (5) Railway Passenger The number of railway passengers has been increasing at an annual rate of 3.5% in recent years. There are two competitors to be considered for passenger transport by rail: domestic flights and long-distance buses. However, according to the Passenger Interview Survey, the markets for railway and air passengers are different in view of personal income level, and the number of air passengers can be estimated separately. On the other hand, the mode choice between rail and bus need to be considered because customers of rail and bus are similar. It is expected that bus services between major cities increases as road networks expand, and the number of passenger by rail also increases through improving the train service. Therefore, it is rational that the steady growth of railway passengers will continue. The future transport volume of railway passenger in terms of passenger-km was estimated using a regression model based on statistics over the last ten years as follows. Table Projection of Railway Passenger Demand (Million Passenger-kms ) Year Total (All Pakistan) Interzonal Railway Total Railway Modal Share , ,397 22, % , ,494 26, % , ,794 31, % , ,650 44, % , ,098 53, % Note: The ratio of interzonal transport to the total for railway passenger is assumed to be 0.95 Source: JICA Study Team 24 Billion passenger-kms ,000 4,000 6,000 GDP (Billion Rs.) Y= X X (R=0.998) Where; Y: Annual demand in million passenger kms X1: GDP in Rs. Billion X2: Dummy Variable (zero after the year 2002) Source: JICA Study Team Figure Regression Analysis of Passenger Demand for Railway Passenger 4-17

173 4.3.4 Summary of Demand Forecast for Land Transport Passenger transport volume by road was calculated as the difference of the passenger-km by rail subtracted from the total passenger-km. On the other hand, freight transport by road was calculated using a conversion formula between road and rail. The results of the estimation are summarized in Table and Table Inter-zonal passenger transport in passenger-km will increase at a high annual rate of 6.6% for the next five years and 6.4% from 2010/11 to 2025/26. Although the passenger transport by rail will increase at a steady growth rate of 3% and 3.5%, the railway share of inter-zonal transport will decrease to 8.7% in Table Projection of Passenger Transport Demand (Million Passenger-km/ Year) All Pakistan Inter-zonal Total Road Rail Total Road Rail , ,586 24, , ,408 22, , ,007 28, , ,776 26, , ,782 33, , ,269 31, ,135,494 1,088,275 47, , ,792 44, ,466,149 1,409,876 56, , ,638 53,459 AGR* 05/06-10/ % 8.67% 3.05% 6.60% 7.17% 3.05% 10/11-25/ % 6.72% 3.51% 6.44% 6.41% 3.51% Mode Share % 8.2% 85.1% 14.9% % 5.3% 89.2% 10.8% % 4.2% 91.3% 8.7% Note: *Annual Growth Rate The results of the demand forecast for freight transport show a significant increase in railway demand as shown in Table Interzonal freight transport by rail is expected to account for 33.8% in Note that the figures express potential demand rather than a prediction, and this should be considered as the target demand for railway development. Table Projection of Freight Transport Demand (Million Ton-kms) (Million Ton-kms) All Pakistan Interzonal Total Road Rail Total Road Rail , ,480 6,120 99,223 93,409 5, , ,107 10, , ,809 10, , ,086 39, , ,536 37, , , , , , , , , , , , ,737 AGR* 05/06-10/ % 7.79% 11.98% 6.04% 5.63% 11.98% 10/11-25/ % 5.05% 17.24% 6.21% 3.88% 17.24% Mode Share % 4.3% 94.1% 5.9% % 13.4% 79.9% 20.1% % 22.1% 66.2% 33.8% Note: *Annual Growth Rate 4-18

174 4.3.5 Traffic Forecast in MTDF The traffic forecast for roads and railways up to 2010 is appended to the MTDF as shown in Table and Table According to the MTDF, the passenger demand and freight demand are estimated to increase by 1.38 times and 1.35 times, respectively, over the next five years. However, BPK of passenger traffic by road in 2004/05 seems to be an underestimation because the actual volume was BPK in 2003/04. Considering the rapid increase in the number of passenger cars and the growth in commuter trips in the large cities, the higher demand forecast of PTPS is reasonable. The forecast of passenger traffic volume by railway in MTDF is similar to that in PTPS. Table Passenger Traffic Forecast in MTDF and PTPS (Passenger: Billion Passenger-Km) Fiscal Road Railway Total Year Actual* MTDF PTPS Actual* MTDF PTPS MTDF PTPS 2003/ / / / / / / / AGR % *: Economic Survey 2004 Source: Economic Survey, MTDF, JICA Study Team On the contrary, the freight traffic volume by road in 2004/05 seems to be an overestimation, considering the actual value in 2003/04. PTPS forecasted freight traffic volume by road to be smaller than that of MTDF, but applied a higher annual growth rate at 7.79%. The forecast of PTPS approximates to that of MTDF. The results of freight traffic forecast by railway are the same between MTDF and PTPS. Table Freight Traffic Forecast by MTDF and PTPS (Freight: Billion Ton-Km) Fiscal Road Railway Total Year Actual MTDF PTPS Actual MTDF PTPS MTDF PTPS 2003/ / / / / / / / AGR % *: Economic Survey 2004 Source: MTDF, JICA Study Team 4-19

175 4.4 Traffic Assignment Model Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) A traffic assignment model was developed in PTPS to estimate the traffic volume for roads under various scenarios. The characteristics of the traffic assignment model are: Vehicle Type: Car, Bus, and Truck O/D Matrix: Daily District-wise O/D Matrix (117zone) Assignment Type: User Equilibrium- Fixed Demand Traffic Assignment Network size: 844 links and 582 nodes (The size differs with scenario.) Network data: all of the national highways, most of the provincial roads, and other important roads using 7 categories Speed-flow Relationship: BPR function The daily traffic for every O/D pair was assigned to each link according to daily speed-flow relationships by link category. The BPR1 function was applied as the daily speed-flow relationship. The function is: [ ( V C) ] 2.82 t = t0 + / where t = travel time t 0 = travel time at free speed V = traffic volume of the link in PCU Q = traffic capacity The curves of the function by road category are illustrated in Figure Although the model treats three vehicle categories, the calculation converged successfully. Speed (km/hour) lane road 2. 1-lane & 2-lane road 3. Narrow 2-lane road 4. Wide 2-lane road 5. 2-lane & 4-lane road 6. 4-lane road 7. 6-lane road PCU per day ('000) Source: JICA Study Team Figure Daily Speed-Flow Relationships for Traffic Assignment 1 Bureau of Public Roads, USA 4-20

176 Chapter 5. OVERALL TRANSPORT POLICY 5.1 Review of Existing Development Plan The Medium Term Development Framework (MTDF) published in May, 2005 declares an ambitious goal for Pakistan to be a developed, industrial, just and prosperous country within 25 years, by attaining 7-8 per cent annual economic growth. To support such rapid growth, MTDF envisages a total investment of about Rs.8.0 trillion during the five years of 2005/ /10. The amount corresponds to 1.3 times of GDP in 2004/05. Out of Rs.8 trillion, the fixed investment is Rs.7.3 trillion, of which 65% is expected to come from the private sector and 35% from the public sector. Total investment in the transport sector is planned to be over Rs.573 billion, of which Rs.304 billion is to be by public investment. Prior to discussing a long-term developing policy and strategy of PTPS, the MTDF was reviewed, and summarized in the followings Overall Policy and Strategy of MTDF The overall policy and strategy of MTDF are summarized in Table The PTPS is one of the actions in accordance with the policy (1) and the strategies (1) to (4) are included in the TOR of PTPS. Table Overview of MTDF Policy and Strategy for Transport Sector Overall Policy and Strategy of Transport Sector (1) Development of a comprehensive and integrated transport policy during MTDF Policy (2) Establishment multimodal transport system (3) Emphasis on asset management of the existing system (4) Enhanced private sector participation (1) Enhancement of regional connectivity to improve links to the Central Asian States, Strategy Iran, Afghanistan and India (2) Improvement of transport planning, prioritization and rationalizing public sector expenditure and mobilization of resources from users and private sector (3) Reforms of institutions governance (4) Adoption of an integrated and holistic approach for more productive, efficient and reliable transport system aiming at lower transport cost Source: MTDF Policy and Strategy of Transport Sub-Sectors of MTDF Table presents the policy and strategies of each transport sub-sector. Every sub-sector shows the general direction of private sector participation. The MTDF expects private sector investment in transport sector to reach 47% of total investment. The Pakistani experience shows, however that private capital will not be easily induced to participate in the road and railway sub-sectors unless each PFI/PPP project is deliberately structured. As a whole, the road sub-sector emphasizes improvement of existing facilities and better operation, rather than new construction. New road projects are limited to those with high economic return. Improvement of cross-border routes is also highlighted in order to enhance the hub-function of Pakistan to the surrounding countries. 5-1

177 Table Sub-Sector Policy and Strategy of Transport Sub-Sectors of MTDF Policy and Strategy of Transport Sub-Sector Road Railway Ports & Shipping Airports& Aviation Source: MTDF (1) Optimal utilization of the existing capacity with emphasis on rehabilitation and upgrading (2) Selective and cost efficient investment in economically viable new roads, including expansion of the rural network (3) Development/improvement of road network to facilitate transport and trade with Iran, Afghanistan, Central Asian States and India (4) Development of innovative financing mechanisms and enhancement of private sector participation (5) Priority to roads maintenance and safety (6) Effective control of overloading on the roads (7) Enhancement of capacity of the road sector agencies (1) Revitalization of railways into a more commercially oriented entity, while retaining the railway network in public ownership (2) Corporatization of railways (3) Induction of private sector capital and management expertise into the sector, particularly into railway support industries and train operations (4) Emphasis on inland freight traffic handled by the railways, to achieve maximum utilization of inherent capacity A. Port (1) Upon the concept of Landlord port, the port s responsibilities are limited to (a) provision of fixed infrastructure such as land wharves and buildings; (b) ownership of wharves, buildings, harbour structures, navigational aids and electrical installations; and (c) control and regulatory functions with respect to services of the port and port conservation and development. (2) All port operations would be done by private sector (3) The Port Authorities would be made fully autonomous B. Shipping (1) Speedy enactment of the Merchant Shipping Ordinance (2) To allow Pakistan ship owner to act as if they are located in EPZ (3) Encouragement of local banks toward extension of financial assistance to potential ship owners (4) Amendment of bilateral shipping agreement (5) Institutionalization of role of freight forwarding agencies for efficient movement of cargoes (6) Revitalization of Pakistan Marine Academy (1) CAA should limit its role to regulatory function with ADA providing the aviation infrastructure and services (2) Pakistani private airline on international routes should be encouraged and be allowed to operate on viable domestic routes (3) The landing and fuel charges should be brought at a with the neighbouring countries (4) PIA and private airlines are to be treated at par in levy of duties and taxes for import of aircrafts and spares As for the railway sub-sector, revitalization, corporatization and privatization of operation are keywords. In order to step toward this direction, the sub-sector will require painful structural reform and a sizable amount of additional investment in order to improve substandard railways and renovate superannuated rolling stock. The port and the airport sub-sectors intend to promote further private sector participation by limiting the government agencies role to landlord and regulatory functions. 5-2

178 5.2 Planning Goal Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Based on the understanding of policies and strategies of the current MTDF, the Study Team tried to set up a planning goal and long-term policies/strategies targeting the year of 2025 in order to clarify the basic planning directions of PTPS. The planning goal of PTPS was set as follows, which may be appropriate in most of long-term transport plans at the national level. Proper level of services may vary by economic conditions and for particular problems of the country. Planning Goal of PTPS Accomplishment of safe, stable and sustainable transportation system and network with an adequate level of services, enough to support people s economic and social activities To approach the goal, three policies and seven strategies have been selected in PTPS. Three Policies A. Transport system to support economic and social activities B. Transport network to support balanced growth of regional economy C. Transport system to realize optimal modal share Seven Strategies 1. Development of financially realizable master plan 2. Transparent Prioritization 3. Pursuit of Road Safety 4. Inter-modal Facilities Development 5. Cross-border Facilities Development 6. Institutional Capacity Enhancement 7. Environmental Consideration To set up those policies and strategies, those of the MTDF are fully taken into account and then the basic planning directions are illustrated as shown in Figure Long-term policies of PTPS A. Transport system to support economic and social activities Planning Goal of PTPS B. Transport network to support balanced growth of regional economy Policy and Strategies of MTDF C. Transport system to realize optimal modal share Strategies of PTPS 1. Financially Realizable Master Plan 2. Transparent Prioritization 3. Pursuit of Road Safety 5. Cross-border Facilities Development 6. Institutional Capacity Enhancement 7. Environmental Conservation 4. Inter-modal Facilities Development Figure Long-term Policies and Strategies of PTPS 5-3

179 5.3 Long-Term Policies of PTPS Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Policy A. Development of transport system to support economic and social activities The MTDF says that about 4.2 million vehicles are currently operated on about 258,000 km road network (page 441). If the national economy grows at such a high rate of 7 to 8 percent per annum as the Government aims, traffic volume will definitely increase by more than five times the present level. On the other hand, the present road network is still in poor condition. Multi-lane roads are very limited and most provincial roads are meters wide, where even small vehicles can hardly pass each other. Under such conditions, not only will traffic accidents increase, but transportation time will become longer and cost are even more. Even now, the MTDF estimates Rs.220 billion or 8.5% of GDP is annually lost due to the inadequate and insufficient transport system (p.442), which will hinder economic growth and reduce export competitiveness unless the transport system is not properly developed. In this study, project identification and prioritization will be made firstly from the economic point of view and then by other factors such as: social needs, development effects and environmental impacts not because they are less important, but due to the difficulties of quantitative analysis required for such factors. Economic evaluation of a project will be conducted for each project based on the present and future traffic, through with and without comparison. Main sources of economic benefit are savings in vehicle operating cost (VOC) and travel time cost (TTC) attributable to the project. Decreased traffic accident by the project will be taken into account, if necessary. The future traffic and accruing benefit are estimated through assignment of OD volume on the network consisting of the national and provincial roads, railways, ports and airports. To support economic activities, the transport network has to be stable and not affected seriously by a natural disaster or social incidents. Major economic centres (large cities, industrial centres, ports, etc.) are interconnected mutually by plural trunk roads or railways so that in case of one link is severed, another will be available. Under Policy A, the focal points for project identification and formation will be as follows: Supporting economic activities by connecting major economic centers with motorways or national highways Demand oriented project formation to avoid traffic congestion Establishment of stability by providing alternative mode or route Increase of urban bypasses Development or improvement of inter-modal facilities Strengthening of international routes Management and effective utilization of existing resources Policy B. Development of transport network to support balanced growth of regional economy Pakistan has two dominant corridors of development: one is the north-south corridor along the Indus basin from Karachi to Lahore/Rawalpindi/Islamabad and the other is east-west corridor from Lahore to Peshawar via Rawalpindi/Islamabad. Economic activities and population are concentrated along these corridors, mainly due to geographical and natural conditions. As a result, a significant economic disparity is observed between the corridors and other areas. Beside this regional disparity, there is an income gap between urban and rural areas. The poverty ratio (the percentage of people below the poverty line) is much higher in rural areas than in urban areas. (Table 5.3.1) 5-4

180 Table Regional Disparity in Pakistan, 1998/99 Province Average Monthly Income per capita (Rs/month) Poverty Ratio (%) Whole Urban Rural Whole Urban Rural Panjab Shindh NWFP Balochistan Pakistan Source: Average monthly income from Household Integrated Survey (HIES) P.10 Table 2.5.C, 1998/99, FBS, 2001 Poverty Ratio from Pakistan, Guideline for Assistance JICA, 2003 As no district-wise data directly expressing poverty level are available in HIES, 2001, five social indicators have been selected as proxy variables in order to see the regional distribution of poverty by district. These are: 1) Percentage of the unvaccinated population of age below 10 years, 2) Percentage of illiterate household members of age 10 years and above, 3) Percentage of household without drinking water inside the house, 4) Percentage of household without electricity for lighting, and 5) Percentage of household with wood only as cooking fuel source. These indicators are well-known to have a close relation to poverty. At province level, actually, the multiple regression of average income per capita on those indicators shows a good fit and a high correlation coefficient of 0.95 The geographical distributions of those indicators are shown in Figure The estimates of average monthly income using the multi-variable regression equation and actual income show a good correlation as shown in Figure Estimate of monthly income Source: JICA Study Team Actual monthly income per capita Figure Correlation of actual monthly income and estimate As poverty alleviation is one of the most important policies of the Pakistani Government and international donors, proper consideration should be paid to the projects in and around relatively poorer area in addition to their economic viability. Under Policy B, the focal points for project identification and formation will be as follows: Harmonization of transport network development with regional development policies and plans Network development aiming at alleviation of poverty and regional disparity High priority setting on transport projects in poorer areas Project implementation by utilization of local materials and procurement of local labor force Effective monitoring of the effects of projects and other poverty alleviation measures and projects affect 5-5

181 Unvaccinated Illiteracy (16) (19) (26) (35) 0-20 (10) (19) (52) (16) (11) 0-40 ( 8) Drinking water outside No electricity for lighting (12) (18) (14) (26) 0-20 ( 36) ( 8) (14) (23) (29) 0-20 ( 32) Wood for cooking Aggregated indicator of poverty level (39) (30) (13) (10) 0-60 ( 14) (22) (36) (32) 5-10 (16) Figure District-wise Social Indicators as Proxy Variables of Poverty 5-6

182 5.3.3 Policy C. Transport system to realize optimal modal share The Pakistani Government has been emphasising the importance of a multi-modal transport system. In Pakistan, multi-mode transport means transport by road and rail. Air transport of cargo is also important but the volume is small and river transport is negligible. It is believed, in general, the unit transport cost (operating cost) of rail is lower than that of road, while capital cost (costs of infrastructure and rolling stock) of rail is higher than that of road, even including road construction cost and maintenance cost. Therefore, the cost curves of the two modes will meet at some point (Figure 5.3.3). The breakeven distance is usually in the range of 150 to 500 km. It depends on the fixed costs (of which, the main part is for loading and unloading) and the variable costs of the two modes and also on the volume of cargoes. Transport Cost per ton Rail Road km Distance Figure Breakeven Point of Transport Cost by Road and Railway Taking into account the economic advantage of railway transport, PTPS proposes a target share of railway at 20% in 2015 and 34% in 2025 as stated in Chapter By attaining this target modal shift from road to rail, a sizeable economic benefit is expected to accrue. If comparing the economic costs of two modes, direct economic benefit is estimated at Rs billion in 2015 and Rs billion in 2025 (estimated in PTPS), even disregarding the savings in transport cost due to the mitigation of road congestion. The cumulative benefit during 2015 to 2025 will reach Rs. 426 billion (US$ 7.1 billion) and then, at least the amount will be economically justifiable for realization of target modal share. Under this policy C, focal points for project identification and formation will be as follows: Minimization of transport cost by multi-modal transportation Fare competition between road and rail Modernization of railway system through rehabilitation with improvement to railway infrastructure and facilities, renewal of rolling stock and institutional reform of management and operation Development and improvement of inter-modal facilities Introduction of research works suitable for local conditions 5.4 Development Strategy of PTPS Seven strategies have been selected to develop the long-term transportation master plan, PTPS. 5-7

183 5.4.1 Development of Financially Realizable Master Plan A master plan should not be a mere wish list, but a practical list for which the total amount is in the financially feasible range according to the scale of the national economy and government budget. The MTDF plans to invest Rs.573 billion or 9.3% of GDP in 2004/05 for five years of 2005/06 to 2009/10, that is, 1.8% per annum. As the annual investment in the transportation sector is usually in the range of 1.5 to 3.0% of GDP in developing countries, the investment plan of the MTDF is rather modest as far as the transportation sector is concerned. Based on the economic growth scenarios stated in Chapter 4, an analysis of a reasonable range of transport investment in the coming 20 years is presented in Chapter and the range was estimated to be Rs. 3.7 to 5.1 trillion (US$ billion). As the revenue of the Government can hardly keep up with the economic growth, the majority of the investment should be shouldered by the private sector. In general, however, PFI/BOT scheme are not easy to apply to a transportation projects because of the huge investment, long cost recovery period and limited users affordability; such a project then needs prudent preparation works and in most cases, public and private joint participation (PPP scheme) will be necessary. Preparation of an investment plan according to the national economy Expansion of financial sources and proper allocation Application of Beneficiary pay principle or Causer pay principle Participation of private sector Transparent Prioritization The budget of the Pakistan Government has been tight compared to the huge demand for transportation investment, so project prioritization is important in these kind of master plan studies. The method adopted for prioritization has to be logical and reasonable. It should alos be understandable and agreeable to most stakeholders. Above all, the method and process should be clear and transparent. Figure shows the procedure taken in this Study for priority setting on candidate projects. 1. Demand Forecast 4. Project Cost Estimation 2. Transport Cost Analysis 3. Benefit Estimation 5. Economic Project Cost 6. Economic Evaluation 7. Other Criteria 1) Environmental Consideration 2) Magnitude of Beneficiaries 3) Safety Improvement Effect 4) Pro-Poor Projects 5) Burdens on Government Budget 8. Comprehensive Evaluation 9. Project Prioritization Figure PTPS Procedure of Project Prioritization 5-8

184 The economic return of a project is regarded as the most dominant criterion in determining the priority of the project, because the economic growth is one of the most important objectives of the MTDF. After setting priority on all candidate projects from an economic view point, those projects are re-evaluated on other criteria and finally, comprehensive priority setting will be done. How to set the relative weights among evaluation criteria is being studied. Regarding the prioritization, focal points are: Consensus among stakeholders on evaluation criteria and relative weight among them Technology transfer to the counterpart team on prioritization technology Pursuit of Road Safety As the number of vehicles increases, traffic accidents have been increasing also in Pakistan. Overloading on trucks accelerates the rate of increase in accidents. As for rail, three fatal accidents have been occurring in the past five years mainly due to poor communication systems. As traffic accidents will increase in parallel with transport demand, traffic safety will become a more important issue in the future. Focal points for traffic safety are: Physical improvement and good maintenance of road and rail systems Strict regulation enforcement especially on overloading and transporting hazardous freight Establishment of rescue system Development a system for traffic accident statistical data Traffic safety education to drivers and school children Inter-modal Facilities Development Why inter-modal? For a variety of reasons, and due to regional diversities, production and consumption of goods takes place in geographically separate locations. In this competitive world, it is essential that the transport costs of both imported and exported goods are kept low. This requires good accessibility, and use of most appropriate and efficient mode or modes of transport. For example, for the movement of large volumes of goods over long distances it is efficient to use bulk movement modes: railways or shipping, as appropriate. However, one of the key drawback of multi-modal or single mode transshipment facilities is the increase in the number of times goods have to be handled, i.e. loaded and unloaded - contributing to the increase in the cost of transportation. The minimum criteria for an efficient and cost-effective inter-modal terminal would be to at least take account of the following points: The location of such termini is accessible for all modes using the terminal, All modes using the facility should have adequate transport infrastructure and carrying capacity, The design of such a facility should allow safe and efficient transfer of goods through the use of technology and material handling devices, Handling of goods is made efficient through unitization, i.e. handling only containerized goods, and container stuffing and unpacking takes place elsewhere, Make effective use of communication systems such that clients are aware of the status and location of their freight, Through systemized and simplified documentation, allowing easy processing of goods through customs and excise checks and payment of dues. For example, clearance of goods at Lahore airport requires payment of dues to at least six or seven different agencies, which could easily be paid at a single counter. This is particularly true of multi-modal terminals such as ports, and major inland freight termini usually called dry ports. Such single or multi-modal inland termini could also be used for the local distribution of goods for large local populations and export collection points for industrial centers for the export of goods. 5-9

185 Pakistan, with its vast area of over 790,000 sq-km and few population centres with access to the ports at or near Karachi, adopted the use of dry ports since the mid-1980s. This had the key impact of reducing the congestion at Karachi port, and leaving it to be an efficient multi-modal terminal and not become a distribution center for the whole country. There are about 20 dry port termini in Pakistan in cities other than Karachi. As one would expect, the majority of these are in large conurbations in the provinces of Punjab, Sindh and NWFP. PTPS traffic and transport survey programme would cover a number of these facilities. Further analyses of their function, importance, processing capacity, likely improvements and location of additional such terminal would be covered in this study. It could be commented that the PTPS strategy for efficient and cost effective movement of goods in Pakistan involves effective use of all available modes of transport, and propose s further transport infrastructure development, where necessary, to promote economic growth as anticipated by MTDF Cross-border Facilities Development Pakistan has several thousand kilometres of land borders with its neighbouring countries: Iran, Afghanistan, China and India. Beyond these countries Pakistan could act as a major transshipment route for the land locked countries of central Asia, which have enormous growth potential and wealth of mineral deposit. A Pakistan with efficient land transport infrastructure and ports for import export would gain enormously by providing the key access routes to the warm waters of the Indian Ocean and Persian Gulf. The PTPS strategy towards cross-border trade of Pakistan with its neighbouring countries and the Central Asian states is two-fold: a. Improve bi-lateral trade with neighbouring countries through harmonization of political relations, promoting not only trade but tourism and other such activities, and b. Provide seamless transshipment route for Afghanistan and the Central Asian states farther away. 1) Cross-Border Trade with the Four Neighbouring Countries The recent thaw in political relationship has seen an increase in cross-border movement of goods and people. However, there is a long way to go before the people of these nations could travel across each other s land without restriction in the way Europeans do. The trade with these countries has started to pick-up and should be encouraged by: Reducing bureaucratic paper work, Simplifying the custom and excise formalities, Providing facilities for fast track processing of passport checks through enhanced use of technologies, Improving transport infrastructure of all modes to international standards ensuring adequate capacity, Provision of multiple cross-border facilities between neighbours across several thousand kilometres of borders. PTPS as part of its extensive traffic and transport survey programme across Pakistan has conducted surveys at most cross-border facilities. In developing the transport master plan for Pakistan, due consideration will be given to these facilities. 2) Role of Pakistan as Transit Trade Route Pakistan could play a pivotal role in the development of the economies of Central Asian states and that of Afghanistan by providing them with transit routes to the ports of the Gulf and Indian Ocean. Afghanistan and China are already using the historic trade routes for access to the ports in Pakistan. However, trade is limited due to: 5-10

186 Poor inter-modal transshipment facilities at border crossings, Limited through movement of goods due to limitations imposed by each country, Lack of facilities for through passage of goods and people Poor capacity transport links between border crossing and to the nearest dry-ports and overland routes to major ports at Karachi Inadequate high capacity rail links for bulk movement of goods, Totally unimpressive performance of current railways in terms of frequency, delivery of goods on time, insurance against loss and damage to goods, and so on Little or no provision for handling of containers for inter-modal transfer Lack of secure and modern warehousing facilities for storage of goods Outdated documentation and billing processes, and so on. For Pakistan to act as trade route for these nations, PTPS would recommend strategies on how to enhance cross-border facilities. Currently, a number of projects are on the way to improving the poor facilities outlined above, for example, widening the road section at the border crossing between India and Pakistan at Lahore. The data from cross-border surveys is being processed to asses the inadequacy of facilities for future recommendations to follow Institutional Capacity Enhancement Construction and maintenance of roads has been devolved from the Central Government to the local government in accordance with the devolution policy. However, financial sources have not necessarily been transferred to local government, along with the transfer of responsibility. In addition, some local governments have not yet acquired the absorptive capacity in planning, design, cost estimate, evaluation bidding, etc. Both at the central and local level, institutional capacity for research and training functions do not appear to be sufficient. To meet the increasing demand for such functions, institutional enhancement will be needed. Enhancement of training function for government personnel, inclusive of traffic police Enhancement of transport research institute, particularly in creation, collection and maintenance of transport statistical data Encouragement for universities and colleges to create faculties of transport planning and design Environmental Consideration Protection of the environment and environmental awareness has been common for some time in Pakistan. GOP has taken measures towards improving and protecting the environment through legislation, education, and public participation. Such programmes are in their infancy. In preparing the PTPS due consideration will be given to environmental laws, rules, regulations and issues. Key points for consideration are: Preparation of environmentally sustainable transport master plan, Environmental assessment to be an integral part of project evaluation and prioritization process, Recommending full environmental impact assessment of all proposed projects before implementation, All proposed transport infrastructure projects to follow environmental laws, rules and regulations at all stages of the project, i.e. before, during and after construction, Fare compensation for land and loss of livelihood of land owners Propose mitigation measures to reduce adverse impacts, and Not to allow worsening of environmental conditions, where the current environment has already suffered degradation due to neglect and over-sight of the past decades. 5-11

187 Chapter 6. DEVELOPMENT STRATEGY 6.1 Development of Financially Realizable Master Plan In this section, the national financial situation was analysed and the possible investment budget for the Master Plan was calculated. In order to increase funds for transport sector, strengthening of the road tax was recommended and target investment level with road tax was proposed. Financial reforms of NHA and PR were proposed to ensure the financial stability for the Master Plan. Finally, private sector involvement in transport sector was analysed because private sector investment is essential for the transport development Analysis of Financial Situation of Pakistan (1) General Information Regarding Pakistan National Budget Fiscal deficits have continued to appear in the National budget of Pakistan. Table shows the trend in fiscal deficits as a percent of GDP. These fiscal deficits may lead to the massive public debts. Table shows the trends in public debts from fiscal year 2001/02 to fiscal year 2004/05. According to Table 6.1.2, public debt has ranged from 60 to 80% of GDP. The increase in debts leads to increased interest payments and contributes to inflexibility in budgetary expenditures. Table Proportion of Deficit of GDP (Unit: %) FY 1990/ / / / / / /97 Revenues Expenditures Overall Fiscal Deficit FY 1997/ / / / / / /04 Revenues Expenditures Overall Fiscal Deficit Sources: Pakistan Economic survey 2004/05 Table Trends in Public Debt (Unit: Rs. Billion) 2001/ / / /05 (July - March) Debt (in Rupees) 1, , , ,982.3 Debt (in Foreign Exchange) 1, , , ,944.4 Total Debt. 3, , , ,926.7 GDP 4, , , ,547.6 As % of GDP 84% 78% 68% 60% Sources: Pakistan Economic survey 2004/05 (2) Inflexibility of Budgetary Expenditures The problem regarding the National Budget of Pakistan lies in the inflexibility of the budgetary expenditures. Interest payments and the defence sector account for approximately 40 to 50% of the total expenditures. This situation is forcing the budgetary expenditure to be inflexible. Table shows the details of budgetary expenditures. 6-1

188 Table Details of Budgetary Expenditures FY 1997/ / / /01 Rs. Billion % Rs. Billion % Rs. Billion % Rs. Billion % Total Current Expenditures Interest Payments Defence Development Expenditures FY 2001/ / /04 (Estimated) Rs. Billion % Rs. Billion % Rs. Billion % Total Current Expenditures Interest Payments Defence Development Expenditures Sources: Pakistan Economic survey 2004/05 According to the Medium Term Development Framework (MTDF), transport is an important sector of the economy contributing 10% of the GDP and over 17% of the Gross Capital Formation. In addition, the development expenditure in the transport sector from 2001/02 to 2004/05 is calculated to be Rs. 145 billion, and the average budgetary annual expenditure during this period is Rs. 29 billion. Considering that the total annual development expenditure is around Rs. 100 billion (see Table 6.1.3), the development expenditure on the transport sector is 30% of the total. This percentage indicates that the Pakistan Government regards transport as one of the most important sectors to be developed. The details of expenditure in the transportation sector from 2001/02 to 2004/05 are described in Table Table Details of Development Expenditures (2001/ /05) (Unit: Rs. Million) Government Self Financing / Public-Private / Corporation Private Financing Total Railway 31, ,195 Road 98, , ,758 Port & Shipping 14,800 3,112 4,950 22,862 Airways 0 10,709 7,964 18,673 Total 144,863 13,821 23, ,488 * Expenditures for the NHA and Provincial Road Programme are included. Sources: Annex I in Section 29 of MTDF (2005/10) (3) Medium Term Development Framework (MTDF) The Planning Commission (hereinafter referred to as the Commission) is in charge of preparing the MTDF. The ministries of the national governemnt are required to submit the documents, which is called Planning Commission Pro-forma (hereinafter referred to as PC ), to the Commission for approval to start and proceed development projects. The PC can be classified into four types from PC1 to PC4. Each PC has the following role. PC1: PC2: PC3: PC4: Proposal of Development Projects Feasibility Study of Proposed Development Projects Progress Report to Monitor Evaluation of the Projects 6-2

189 The PC1 includes an outline of the project, project cost estimation, financial resources for the project, and so on. With the financial data of PC1, the Commission prepares the MTDF, which includes the budgetary allocation. Table shows a summary of the fund resources described in the MTDF. As described in Table 6.1.5, the investment plans funded by the Self Financing / Corporation and the Public-Private / Private Financing equals to around 48% of the total investments, while the investment plans funded by the Government equals to around 52%. This indicates that the financial capacities of the implementing agencies and private participation are significantly important in order to realize the MTDF especially in the Port & Shipping Sector and Airways Sector. Table Investment Plans for Transport Sector (2005/ /10) (Unit: Rs. Million) Government Self Financing / Public-Private / Corporation Private Financing Total Railway 59, ,549 Road 216, , ,646 Port & Shipping 12,732 32,237 71, ,706 Airways 0 127,288 6, ,888 Total 289, , , ,789 % 51.8% 28.6% 19.6% 100.0% * Expenditures for the NHA and Provincial Road Programme are included. Sources: Annex II in Section 29 of MTDF (2005/10) On the other hand, the role of the Federal Government is still vital in the Roads and Railways Sector. The scheduled allocation of funding of the Federal Government is described in Table Table Allocation of Funds of Government (2005/ /10) (Unit: Rs. Million) FY 2005/ / / / /10 Total Road 32,350 36,300 41,400 49,800 57, ,850 Railways 9,849 11,000 12,000 13,200 13,500 59,549 Port & Shipping 3,744 2,122 1,299 1,889 3,678 12,732 Total 45,943 49,422 54,699 64,889 74, ,131 Sources: Annex-3(a) in Section 29 of MTDF 2005/10 These figures only refer to funds regarded as necessary to develop the transport sector. Therefore, the funds allocated in each year are not guaranteed to be provided in the annual budget. In addition, since 40% of the expenditure is for interest payments and the defence sector, there is a risk that expenditure on interest and defence will overweigh expenditure on the development of the transport sector. In order to avoid this risk, it is essential to establish more sustainable financial schemes for roads and railways through strengthening the financial capacity of the implementing agencies, promoting private financing, and formulating schemes to maintain funds for the development outside of the National Budget. 6-3

190 (4) Foreign Direct Investments Table shows trends of the foreign investments. Pakistan has been introducing reforms to attract the inflow of foreign investment since the early 1980s. However, the total foreign investments exceeded Rs. one billion only in the fiscal years 1994/95 and 1995/96. After fiscal year 1995/96, foreign investment declined until the fiscal year 2000/01. Thereafter, the improvement in the country s economic environment and upward revision of the country s credit ratings may contribute to attracting large inflows of foreign investment. Consequently, the amount of foreign investments increased from fiscal year 2002/03. Table Trends of Foreign Investment (Unit: USD Million) FY 1992/ / / / / /98 Direct Investment , Portfolio Investment , Total , , FY 1998/ / / / / /04 Direct Investment Portfolio Investment Total Sources: Pakistan Economic survey 2004/05 Table shows trends of foreign direct investments by economic groups. The major sectors attracting Foreign Direct Investments (FDI) are the Oil & Gas, Telecommunications and Financial Sectors. According to the MTDF report, the transport sector recently opened new avenues for FDI, after which the area of intra-city transport was able to capture larger investment from Middle Eastern investors. Besides macroeconomic stability and wide-ranging structural reforms, Pakistan now has a robust financial system. However, the cost of doing business remains high due to bureaucratic hurdles, high utility prices, multiplicity of taxes and high tax rates. The legal and regulatory infrastructure also needs to be improved. These problems should be dealt with in a decisive manner. Table Trends of FDI in Main Economic Groups (Unit: Million USD) Economic Group 2001/ / /04 Power (14.2) Chemical, Pharmaceutical & Fertilizer Construction Mining & Quarrying, Oil and Gas Petro-Chemical & Refining Food, Beverages & Tobacco (5.1) Textile Transport, Storage & Communication Machinery Other Than Electrical Electronics Electronic Machinery Financial Business Trade Tourism / Paper & Pulp Cement / Sugar Others Total Sources: Pakistan Economic survey 2004/05 6-4

191 (5) Activities of Donor Agencies The major donors in Pakistan are the Government of Japan (JICA & JBIC), the World Bank and ADB. According to the Pakistan Transport Sector Assistance Strategy Note (Report No PAK) released by the World Bank, major donor activities in Pakistan s transport sector of Pakistan from 1990 to 2002 were as follows. Government of Japan: medium term National Transport Plans, National Highways (Indus Highway), rural access roads, railways and a proposed light rails mass transit system for Lahore; World Bank: Transportation Policy formulation, the National Highways System (N-5 expansion and network maintenance), Railways, Karachi Port and Trade & Transport Facilitation; and ADB: National Highways (Sukkur Bypass), provincial highways, farm-to-market roads, Port Qasim and Trade & Export Promotion. Recent activities of the World Bank and ADB are as follow. a) World Bank The World Bank is now supporting privatization of Pakistan Railways. In February 2005, the World Bank held discussions with the Ministry of Finance, Ministry of Railways and the Planning Commission regarding Restructuring of Pakistan Railways. Based on the Aide Memoire of the discussion, the World Bank was requested to assist the implementation of new financial systems for the railway entity. The assistance includes establishing the specifications and implementing a financial and management information system to facilitate business approaches to railway management and the introduction of private sector operations into the rail system. The cost of proposed package of the assistance would be approximately USD 750,000, based on the assumption that consultants would provide two-thirds of the input. Table shows a list of recent financial assistance of World Bank since Project ID Table List of Financial Assistance of World Bank Project Name Approval Date Closing Date Total Project Costs (Million USD) Committed Amount (Million USD) NWFP Community P Infrastructure Project II 20-May Dec (NWFP CIP2) P Highways Rehabilitation 23-Dec Jun Sources: World Bank web-site b) ADB Most of the recent projects assisted by ADB are mainly for the road sector. Currently ADB is completing a technical assistance (TA-4508 (PAK): Facilitating PPP Initiatives in National Highway Development). This technical assistance (TA) aims at supporting the NHA to design appropriate mechanisms to accelerate national highway and motorway development through increasing private sector financing. The primary task of the TA is to review and analyze the existing policy, regulatory & institutional frameworks for private sector involvement in financing, constructing, operating and maintaining national highways and motorways. ADB is now proceeding with another TA to promote the private partner participation in the following steps. In addition, ADB has proposed that funds be established to provide the financial resources for road maintenance of the local road network. According to ADB, while the road network controlled by the National Highway Authority has financial resources for the maintenance, the local road network does not have sufficient financial resources. In order to enhance the financial resources for the maintenance of the local road network, ADB has recommended 6-5

192 Project ID that local governments establish road maintenance funds for the local road network. However, in order to realize this recommendation, there still remain a lot of issues to be resolved and the recommendation is now under discussion among the stakeholders. Table shows a list of recent financial assistance of ADB since Table List of Financial Assistance of ADB Project Name Approval Date Closing Date Total Project Costs (Million USD) Committed Amount (Million USD) LOAN: Road Sector Development Project PAK Dec-01 Dec LOAN: Punjab Road Development Sector 31-Oct-02 PAK Project N/A LOAN: Balochistan Road Development 20-Nov-03 PAK Sector Project N/A LOAN: Community Development and 20-Nov-03 PAK Poverty Reduction Project N/A LOAN: NWFP Road Development Sector 18-Nov-04 PAK and Sub regional Connectivity Jun LOAN: Sub regional Connectivity and 2005 PAK Trade Facilitation I (Expected) N/A Enhancing Road Improvement Grant: Benefits to Poor Communities in 28-Apr Apr-08 PAK NWFP Sources: ADB web-site 6-6

193 6.1.2 Possible Investment Budget for the Master Plan (1) Case of Investment Level for Sustainable Development According to the JBIC/ADB/World Bank Joint Study Infrastructure in East Asia: The Way Forward, the fund requirement for the transport sector is US$23.5billion for Manila by 2015, US$10.3billion for Jakarta by 2020 and US$14.0billion for Ho Chi Minh by 2020 (excluding maintenance of existing infrastructure). This is equivalent to 2.6%, 0.7% and 2.5% of GRDP. The low requirement for Jakarta is mainly due to the existing accumulation of infrastructure (railways, expressways, etc). Though largely different by city, if 1-4% of GRDP is continuously invested in urban transport infrastructure (including maintenance of existing infrastructure), urban transport system can be sustained. Therefore, the 2.5% of GDP can be regarded as one of the criteria of the investment level for the sustainable development of urban transport system. If this criterion is applied to the national transport system and kept until 2025, the amount of total investment in the sector from 2005/06 to 2004/25 is estimated at around Rs. 6.4 trillion. Table shows the estimated investment level in the GDP Middle Growth Case discussed in section 4.2. Table Case of 2.5% of GDP Investment (2005/ /25) (Unit: Million Rs.) Federal Self Financing / Public-Private / Government Corporation Private Financing Total Railway 681, ,350 Road 2,481, ,363 2,833,527 Port & Shipping 145, , ,804 1,335,332 Airways 0 1,456,410 75,516 1,531,926 Total 3,308,192 1,825,260 1,248,683 6,382,135 Source: Prepared by JICA Study Team with Data from the MTDF (2) Case of MTDF The MTDF 2005/10 envisages investments of Rs. 558 billion 1 in the transport sector, which equals 1.46% of the predicted GDP (Market Price) in the same period (total amount of GDP from 2005/06 to 2009/10). If this trend continues until 2025, the amount of total investment in the sector from 2005/06 to 2024/25 is estimated at around Rs. 3.7 trillion. Table shows the estimated investment level in the GDP Middle Growth Case. Table Investment Level under MTDF (2005/ /25) (Unit: Million Rs.) Federal Self Financing / Public-Private / Government Corporation Private Financing Total Railway 398, ,146 Road 1,449, ,903 1,655,768 Port & Shipping 85, , , ,299 Airways 0 851,051 44, ,179 Total 1,933,138 1,066, ,666 3,729,392 Source: Prepared by JICA Study Team with Data from the MTDF 1 The entire amount of allocation the MTDF 2005/10 envisages is RS. 573 billion, which includes the miscellaneous non-investment expenditures. 6-7

194 (3) Investment Level from 2000/01 to 2004/05 Based on the discussion so far, the assumed investment level for each case has a huge gap of Rs. 2.6 trillion (Rs. 6.4 trillion in the 2.5% of GDP Investment Case and Rs. 3.7 trillion in the MTDF Case). On the other hand, the investment in the road & railway sector is greatly constrained by the financial resources of the Government. According to the investment level in the past, realizing the 2.5% of GDP Investment Case seems to be extremely difficult. From 2001/02 to 2004/05, while the total GDP (market price) in this period can be estimated at Rs. 21 trillion, the investment in the transport sector in the same period amounted to Rs. 182 billion, which equals only 0.86% of the estimated total GDP. If this trend continues until 2025, the amount of total investment in the sector from 2005/06 to 2024/25 is estimated at around Rs. 2.2 trillion. Table shows the estimated investment level in the GDP Middle Growth Case. Table Investment Level under MTDF (2005/ /25) (Unit: Million Rs.) Federal Self Financing / Public-Private / Government Corporation Private Financing Total Railway 233, ,447 Road 850, , ,833 Port & Shipping 49, , , ,516 Airways 0 499,000 25, ,874 Total 1,133, , ,828 2,186,669 Source: Prepared by JICA Study Team with Data from the MTDF Therefore, under the current situation, the 2.5% of GDP Investment Case requires strong and deliberate decisions from the Government. (4) Proposed Investment Level Establishing a sustainable funding mechanism for infrastructure development enables the investment level to get closer to the 2.5% of GDP Investment Case. However, a sudden jump from the current level to 2.5% can hardly be expected, so 1.46% of the MTDF is assumed for and thereafter the rate should be gradually raised toward 2.5%. As a result, the average proportion of GDP in transport sector investment for the period of would be 2.0%. The cumulative investment amount would be Rs 5,106 billion (US$ 8.5 billion) which is regarded as an appropriate investment amount for the said period (Table ). Table Target Investment Level at 2.0% of GDP (Unit: Million Rs.) Federal Self Financing / Public-Private / Government Corporation Private Financing Total Railway 545, ,080 Road 1,984, ,1890 2,266,822 Port & Shipping 116, , ,643 1,068,266 Airways 0 1,165,128 60,412 1,225,541 Total 2,646,554 1,460, ,946 5,105,708 Source: Prepared by JICA Study Team with Data from the MTDF 6-8

195 (5) Road Tax for Transport Sector a) Road Tax Scheme for Road and Rail Sector As mentioned earlier, according to the projected financial allocation in the MTDF , in the Port & Shipping Sector and Airways Sector, around 95% of the total investment is expected to come from Self Financing/Corporation and the Public-Private/Private Financing. The financial status of the implementing agencies is sufficient to finance the development in the Port & Shipping Sector and Airways Sector. On the other hand, in the road and railway sector, it is necessary to establish sustainable financial schemes by formulating system that provide funds for the development of infrastructure and strengthening the financial capacity of the implementing agencies. In order for that, the following actions are recommended; To segregate the road tax revenue from the general consolidated budget of the government by creating an independent account for road tax, which can then be used only for the development of the road and railway infrastructure, and To recover the full maintenance costs from the users of the infrastructures. It is desirable to use road taxes for the development of the railway sector because development of the railway infrastructure can reduce the burden on the road infrastructure, reduce traffic congestion, and benefit the environment. b) Estimation of Road Tax Revenue The major component of road tax revenue is from Surcharges on POL, and there is a strong correlation between the growth in GDP and the demand for petrol and diesel fuel. Therefore, it can be assumed that future increase in GDP may cause an increase in POL consumption that may lead to increased road tax revenues. Table shows the relationship of the above-mentioned components and the GDP (Market Price) from 1990/91 to 1999/2000. Table Relationship between GDP and Road Taxes (Unit: Rs. Million) 1990/ / / / / /96 Surcharge on POL 9,670 9,138 8,007 12,956 9,576 12,361 Others 1,351 1,407 1,484 1,534 2,087 1,815 (A)Total 11,021 10,546 9,490 14,489 11,663 14,176 (B)GDP (Market Price) 1,016,724 1,205,204 1,333,041 1,561,104 1,865,922 2,120,173 (A)/(B) (Percentage) 1.08% 0.88% 0.71% 0.93% 0.63% 0.67% 1996/ / / /2000 Average Percentage Surcharge on POL 15,861 17,661 26,128 32,101 15, % Others 1,997 2,394 2,966 3,081 2, % (A)Total 17,858 20,055 29,093 35,182 17, % (B)GDP (Market Price) 2,428,312 2,677,656 2,938,379 3,147,167 2,029,368 - (A)/(B) (Percentage) 0.74% 0.75% 0.99% 1.12% 0.86% - Sources: Prepared by JICA Study Team with Data from World Bank and Pakistan Economic survey 2001/02 As shown in Table , the percentages of road tax revenues of GDP were approximately at the same level from 1990/91 to 1999/2000. Therefore, it can be assumed that the road tax revenues are proportional to the GDP (market price). Based on this assumption, the future road tax revenues can be estimated based on the projected future GDP and the average percentages of the road taxes of the GDP from 1990/91 to 1999/2000 (0.86%). Table shows the estimation of future road tax revenues. 6-9

196 Fiscal Year Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Table Road Tax Estimation 2005/ / / / / /20 (Unit: Rs. Billion) 2020/21 Total -2024/25 GDP Middle Growth Case ,183 Sources: Prepared by JICA Study Team c) Proposed Investment Level for Infrastructure Development On the other hand, the total amount of investment to be financed by the government for the development of the road & railway sectors is calculated at approximately Rs. 2.5 trillion in the 2.0% of GDP Investment case and 1.8 trillion in the MTDF Case. Table shows the amounts of the investment costs to be financed by the government in each case, which is accompanied by percentages of estimated road tax revenues. Table Comparison between Estimated Revenues and Financing from Budget (Unit: Rs. Million) Funding Required from Budget Percentages of Road Railway Total Estimated Revenues 2.5% of GDP Investment Case 2,481, ,350 3,162, % 2.0% of GDP Investment Case 1,983, ,824 2,528, % MTDF Case 1,449, ,146 1,848, % Sources: Prepared by JICA Study Team with Data from the MTDF According to Table , the investment level in the case of 2.0% of GDP exceeds the projected road tax revenues by 16% and requires extra resources. One of the ways to achieve the extra resources is to issue government bonds etc. However, interest payments are one of the reasons that are forcing the budgetary expenditure to be inflexible. Therefore, it may be difficult for the government to raise funds through extra borrowings to compensate the gap between the investment level in the case of 2.0% of GDP and the road tax revenues. On the other hand, the investment level in the MTDF case can be realized with 85% of the projected road tax revenues. However, the remaining 15% of the projected road tax revenues should not be used for other purposes because the road tax revenues collected from road users must be returned to the transport sector through infrastructure development. Otherwise the road users will bear an unnecessary financial burden, which may put the development of the transport sector at risk. Accordingly, it can be concluded that projected road tax revenues shown in Table (Rs. 2.2 trillion) can be regarded as the future investment level. Table shows the allocation of this proposed investment level. The percentages of road sector and railway sector investment in Table are based on the same proportions of investment allocation as the MTDF. Therefore, it is recommended to revise the percentages of the investment allocation based on the development policy of the transport sector. Table Resource Allocation under Proposed Investment Level (Unit: Rs. Million) Road Railway Total 2004/ /10 253,112 69, , / /15 351,478 96, , / /20 476, , , / /25 631, , ,159 Total 1,713, ,421 2,183,475 Percentages 78.5% 21.5% 100.0% Sources: Prepared by JICA Study Team with Data from the MTDF 6-10

197 6.1.3 Financial Reform of Road and Rail Sectors (1) Financial Reform of NHA a) Road Maintenance Account (RMA) By strengthening the function of the RMA, the funds for maintenance of existing roads can be separated from the National Budget, which is often influenced by the fluctuating political situation of Pakistan. This indicates that it is possible for maintenance funds for existing roads to be guaranteed from the revenues of the NHA, while the expansion of the road network shall be based on the transport policy of Pakistan with financing from the National Budget. In order to strengthen this scheme, it is recommended to establish the Road Development Account to efficiently control and monitor the funding for the development. Figure shows a concept of the above-mentioned system. National Highway Authority (NHA) Information on Depreciation Costs Road Maintenance Account (RMA) Tolls etc. Road Users Road Development Account (RDA) Funds for Development Ministry of Finance Sources: Prepared by JICA study team Figure Introduction of Road Development Account for the NHA This scheme is based on the idea that the government issues funds to the NHA for the development of the road network through the RDA, while the NHA maintains the road with the RMA which accumulates toll revenues from road users. By setting the RDA, the Government or the NHA can control the efficiency of the road development work with monitoring the cash flow of the RDA. On the other hand, by strengthening the function of the RMA, it will become easier to use the toll revenues from road users only for the maintenance of existing road network. The arrow in Figure from the RDA to the RMA does not mean cash flows, rather, it shows information on the depreciation costs to be recovered from toll revenues. The depreciation costs are expected to occur in the accounting process of the RDA because the fixed assets acquired with the fund of the RDA are recorded as a book balance of the RDA. On the other hand, since the depreciation costs are to be a part of the replacement costs of the existing facilities, the depreciation costs have to be recovered from toll revenues. However, since the depreciation costs are expected to occur in the book balance of the RDA, the amount of the depreciation costs to be recovered from toll revenues cannot be recognized in the RMA, which leads to a cash shortage for future replacement. In order to avoid this problem, it is necessary to include the amount of the depreciation costs in the calculation of the toll revenues required to balance the budgets of the RMA. b) Accumulated Debt of NHA At present, the government finances the NHA with loans for the development of the road network and expects the NHA to repay the loans with its toll revenues. In other words, the government intends to recover the development costs of the road network with the toll 6-11

198 revenues of the NHA. Under the current scheme of funding to the NHA, the financial burden caused by the development of the road network over commits the RMA, which may cause a cash shortage for the maintenance of the existing road network. In addition, as mentioned earlier, the cash injections for the road network development are expected to be recovered by increasing road taxes and not from NHA s toll revenues. Therefore, the cash injection to the NHA for the network development should not be in the form of loans. In order to avoid those problems, it is recommended to convert the debts of the NHA to equity, which indicates the shares of the government, not the obligation of the NHA. Figure shows a summary of the recommended scheme. Road Users Road Taxes Ministry of Finance Toll etc. National Highway Authority (NHA) Equity Road Maintenance Account (RMA) Maintenance Information on Depreciation Costs Road Development Account (RDA) Development Road Network Sources: Prepared by JICA study team Figure Flow of Funds for the NHA after the Financial Reform Even though the repayment of cash injections to the NHA is not required under this scheme, there are several ways for the government to recover the cash injection in the future. The Ministry of Finance (MOF) is currently conducting the Available Options for Sustainable Financing of NHA s Programme to determine feasible options for the sustainable financing for the NHA. In the draft report of the study conducted by the MOF, the revenue surplus shall be positive after 2012, and cumulative surplus shall be positive after 2020 as shown in Table Table Estimation of Revenue Surplus (Unit: Billion Rs.) FY Revenue Surplus after Maintenance Cumulative Surplus FY Revenue Surplus after Maintenance Cumulative Surplus Sources: Prepared by JICA Study Team with Draft Report of Available Options for Sustainable Financing of NHA s Programme Since the commutative cash surpluses are expected to show positive figures from 2021 (see Table ) the government and the NHA can choose whether to (1) pay dividends, (2) fund some development out of revenue, or (3) buy back its own equity (share buy-backs being the equivalent to repaying loan principal.) to recover the cash injections after the NHA s toll revenues grow sufficiently. 6-12

199 (2) Financial Reform of Pakistan Railways (PR) a) Separation of Accounts by Business Units In order to clarify the possible inefficiency and improve the operation & maintenance (O&M) and investments, a new accounting system should be introduced, which separates the accounts by business units. Figure shows a concept of the new accounting system. Accounts of PR (Existing Accounting System) Account of O&M and Investments for Operators Account of O&M and Investments for Infrastructures Account of Pension Payment Tariff Revenues Track Access Charges Expenditures for O&M and Investments Expenditures for O&M and Investments Financial Support for Investments Financial Support Railway Users Employees and Suppliers Government Sources: JICA study team Figure Concept for New Accounting System The existing accounts of the PR can be separated into the Operator Account, the Infrastructure Account and the Pension Payment Account. Under this proposed accounting system, tariff revenues from railway users are collected in the Operator Account, which treats the cash flow of the O&M and investment activities with regards to rolling stocks. The Track Access Charges shall be charged to the Operator Account from the Infrastructure Account, based on the usage of the infrastructures. The Track Access Charges accumulated in the Infrastructure Account are used for the O&M of the existing infrastructure. In the case of expansion of the railway network, the government allocates the necessary funds to the Infrastructure Account. When the above-mentioned accounting system is introduced, it is recommended to set account managers who are responsible for the Profits & Losses of the Operator Account and the Infrastructure Account. In the above-mentioned accounting system, if the Operator Account and the Infrastructure Account create losses, the government is required to provide necessary financial support. In this case, it becomes evident that the compensations for each account are due to the inefficient management by the account managers. In order to obviously evaluate the performance of the account managers, it is recommended to replace the present financial systems with a modern commercial accounting practice which is compliant with International Accounting Standards (IAS). With regards to the Pension Payment Account, even though the Pension Payment is not the costs related to the current business operation, the PR is obligated to pay for it. Therefore, theoretically, those costs need to be charged to the Operator Account and the Infrastructure Account. The increase in the Pension Payments may bear severely on the Operator Account and the Infrastructure Account, which may lead to the fund shortages for the O&M and investments. Therefore, in order to avoid the financial burdens of those Accounts, the 6-13

200 government should consider creating a separate account for the Pension Payments, which can then be compensated by the National Budget. By separating the accounts shown above, it will become easier to analyse the causes of losses. In addition, the separation of the accounts can contribute to creating possible measures to improve the O&M and investments activities as follow. With regards to the O&M and investment activities of the Operators, it can be considered to take measures for privatization or private financing. With regards to the O&M of the infrastructures, it can be more efficient through partial private participations etc. The development of the railway networks shall be based on the clear transport policy with financing from the National Budget. The payment of pensions shall be funded by the government. The concept of the above-mentioned accounting system is based on the scheme of the Road Sector that the government issues funds to the NHA for the development of the road network, while the NHA maintains the road with the toll revenues from road users. Therefore, after developing the recommended accounting system, it can be considered to privatize the Operator Account and create a new scheme that the government issues funds to the Investment Account for the development of the railway network, while the O&M of the railway network is funded by the Track Access Charges accumulated in the Investment Account. In order to realize the above-mentioned measures, the accounting system should be improved as the first step. b) Privatization of Operator Account The O&M and investment activities of the Operators can be conducted or financed by private companies, as well as the road sector. In the road sector, while the users of the infrastructures are private, the public organizations (governments or governmental implementing agencies) concentrate on financing and controlling the infrastructure development. It is also possible in the railway sector that the public organizations concentrate on the development of railway infrastructures by segregating the Operator Account from the governmental account through privatization and permitting new operators to use the railway infrastructures with the Open Access Policy. Figure shows the concept of the privatization of the Operator Account and private financing with the Open Access Policy. 6-14

201 Accounts of PR (Governmental Accounts) Account of O&M and Investments for Operators Account of O&M and Investments for Infrastructures Privatization Tariff Revenues Operators Privatized from PR Track Access Charges Expenditures for O&M and Investments Railway Users New Other Operator 1 New Other Operator 2 Employees and Suppliers New Other Operator 3 Figure Sources: JICA study team Business Structure of the Railway Sector after Privatization of Operators As described in Figure 6.1.4, the Operator Account privatized from the governmental account shall compete against new operators under the proposed scheme and this competition is expected to promote the improvement of business efficiency. In addition, the segregation of the Operator Accounts is expected to reduce the governmental financial burden accompanied by the O&M and Investments activities in the Operator Accounts. Under this scheme, the governmental organizations are expected to maintain the railway infrastructures in good condition, introduce the Open Access Policy, and set an adequate level of the Track Access Charges Private Sector Involvement in Transport Sector (1) Introduction The Government of Pakistan (GOP) formulated a ten year investment plan for the transport sector ( ). Of the total investment requirement around 48% is expected to be from the self financing/corporation and the public-private/private sector. The importance of the financial self-reliance of implementing agencies and private sector participation in the development of the transport sector is highlighted in the Medium Term Development Framework (MDTF). In Pakistan, there are several projects that have been implemented under a BOT or BOO basis and most of them are in the port and shipping subsectors. In the aviation subsector privatization is well advanced by PIA and it is only a matter of time before the CAA will be going through the institutional reform. In the railway subsector, sweeping reform is taking place and the opportunities for private sector involvement will be enhanced. Lastly, the private sector involvement in highways and motorways has not been successful and it remains questionable whether the BOT or PPP can finance the targeted projects. 6-15

202 (2) Port and Shipping Subsctor Private financing, including on a BOT or BOO basis, have so far been successfully promoted by Karachi Port Trust (KPT) and Qasim Port Authority (PQA) for the development, construction, and operation of terminals and berths. For example, Karachi International Container Terminal (KICT) has been in operation since 1998 and it was originally leased out by KTP to APL, Pakistani company, on a BOT basis for 20 years. Moreover, a Pakistan International Container Terminal (PICT) was the first private terminal to be owned and operated by a Pakistani company. However, it was leased to Trustees of the Port of Karachi for 21 years from June At present, PQA is promoting privatization for the port development, and the following privately operated terminals have been established: Iron Ore and Coal Berth (IOCB): This berth was build by PQA and has been leased to Pakistan Steel: PQA is responsible for maintenance. IOCB commenced operation in 1980 and the equipment for unloading and transferring the ore and coal to Pakistan Steel has been installed and is maintained by Pakistan Steel. The berth has been leased to Pakistan Steel. Qasim International Container Terminal (QICT): The agreement was signed in 1995 between PQA and a group of companies led by P&O Port-Australia, and QICT commenced operation in Berth Nos.5 to 7 of the marginal wharf including a 400m back up space has been leased to the owners of QICT on a BOO basis. FOTCO Oil Terminal: The agreement was signed between PQA and FOTCO in The terminal was constructed on a BOO basis, and the charges for a minimum of 4 million tons of heavy furnace oil per year have been guaranteed by the GOP. Engro Vopak Terminal: The agreement was signed between PQA and Engoro Chemical, Pakistan and VOPAC Holland in The terminal was constructed on a BOO basis. Only Marginal Wharf berths No. 1 to 4 are under direct management of PQA. Berth No.1 is being used for liquid bulk handling and berths Nos. 2 to 4 for dry bulk. (3) Aviation Subsector Pakistan International Airlines (PIA) was incorporated in Pakistan in 1956 under the Pakistan International Airline Corporation Act In 2004, PIAC sold 5.74% of its share via an IPO. The second offering of 5% shares of PIA was offered. CAA was planning to build the new Islamabad International Airport on a BOT basis. It has acquired a large tract of land for the new airport construction. It is unknown, however, whether the CAA is pursuing the BOT idea or not. Currently, CAA operates more than 40 airports within Pakistan. International trend is that most airports are increasingly operated by private sector or local authorities. Usually, the private sector will be involved in the larger, busier airports where income from commercial services to passengers is greater than income from aircraft landing fees. The private sector will not be involved in the airport where commercial opportunities do not exist, and as an alternative the government brings in the local authorities to run the operation. CAA, a public corporation, has three roles: Regulator, Developer and Operator. This creates a conflict of interest for the government in the aviation sector. The CAA role needs to be limited to a regulator. In the UK, for example, the Civil Aviation Authority sets safety standards and undertakes air traffic control in UK air-space, but it does not operate any commercial airports. These airports are operated by British Airport, a private company and local authorities. CAA s role as regulator, financier, developer, and operator creates a conflict of interest and the government need to start thinking about reforming the management of Pakistan s aviation sector. To make Pakistan s CAA function as the regulator that sets safety standards for aircraft, airports and staff and that controls the use of air-space like the UK Civil Aviation 6-16

203 Authority, opportunities for private sector involvement will be enhanced. The idea of the private sector participation in the new Islamabad International under a BOT or PPP arrangement presents a challenge for the privatization of the aviation industry in Pakistan. (4) Railway Subsector Private sector participation in the railway industry has not been successful so far. In order to increase private sector participation the government published an Open Access Policy (OAP) in 1996 for effective utilization of railway infrastructure through unbundling the railway services. The goal of the government was to rebuild the railway industry s commercial capabilities and reputation for quality services. GOP solicited private sector bids to transport fuel oil by rail on behalf of Pakistan State Oil (PSC) to upcountry private power stations. There was no positive reaction from the targeted private sector. In April 1997, the government went a step further to privatize Pakistan Railways. In the GOP s plan, PR was to be restructured into three core businesses freight, passenger and infrastructure, plus residual entity and sold to the public. The plan did not succeed and instead impacted negatively on the operation of PR and infrastructure development and conservation. A sweeping institutional reform for PR has been under consideration and the plan calls for a new public corporation with more autonomy and powers in its governance. The new enterprise will be able to provide the opportunities for private sector involvement in operations of freight transport and railway related industries. (5) Road Subsector GOP has, over the past decade, attempted to attract private sector investments into highways and motorways but it has not been successful. There are reasons attributing to the unsuccessful attempts, including (i) poorly developed domestic capital market and lack of access to long term debt, domestic and international; (ii) a fragile macro-economic situation, (iii) absence of a legislative framework. (iv) lack of experience in BOT and PPP projects in both public and private sectors; (iv) inherent risks of investment in the public works, particularly, in highways and motorways, and (v) absence of criteria for project selection. In the Five Year Plan of NHA, Rs.91 billion is envisaged to be financed by BOT/PPP for its highways and motorway projects. In the past, NHA attempted to attract private capital for the construction of M-2: Islamabad-Lahore Motorway (367 km) on a BOT basis. A concession agreement was executed with Daewoo as the sponsor/contractor but the motorway was completed by traditional public financing through a direct loan of US$667 million from Daewoo by the GOP s guarantee. Five years after completion of the M-2, NHA still owes Daewoo US$793 million. Construction of M-3: Pindi Bhattian Faisalabad Motorway (53 km) was also initiated on a BOT formula but the BOT contract was terminated for technical reasons. The motorway was completed by the original contractor, again through a traditional public finance. Currently, NHA are negotiating the construction of M-4: Faisalabad Multan Motorway (243 km) on a PPP basis. To accelerate the national highways and motorways development by private sector involvement, the NHA has enlisted the following projects in its Five Year Plan that will be financed on a BOT/PPP basis. The total value of these projects is estimated at US$820 million, contributing 25% of the Five Year Plan (i) Karachi-Hyderabad Motorway (M-9) (ii) Faisalabad-Khanewal Motorway (M-4) (iii) Karachi-Kakar Motorway (M-7) (iv) Peshawar Northern By-Pass (v) Rawalpind By-Pass & Tarnol Interchange (vi) Lakpass Tunnel (vii) Shahdara Flyover (viii) Karachi Northern By-Pass 6-17

204 (6) Problems in the Selection of the BOT/PPP Projects NHA needs to recognize that by the application of a BOT/PPP concept to the highways, unless they are willing to participate in equity, it will change the NHA s role as the investor/borrower, since this role has to be delegated to private sector investors. By delegation of all the risks, including financing, the construction, operation and maintenance of highways and motorways will be allocated to private sector investors. This will considerably increases the project cost (sometimes up to 30%-40%) due to, among other things: (i) private sector borrowing from commercial banks and capital markets always costs more than sovereign borrowing, (ii) a considerable amount of operational and management expenses, i.e. quality control, surveying, permission and licensing fees, etc. (these costs are hidden among normal costs related to financing every day s activities of NHA administration) and (iii) the main contractor/investor, accepting lump sum, turnkey, fixed price construction contract conditions, is tempting to accelerate the reimbursement of their equity or part of it by construction works. A key element that should always be evaluated carefully, in this respect, is the estimated time period by which the projects would probably have to be delayed until such an opportunity arose. On that basis, for the time period under consideration the socio-economic benefits at stake, i.e. the cost of the project not being implemented at an optimal date, could be calculated. The period starts in the year when traditionally used parameters characterizing project efficiency such as net present value (NPV) or internal rate of return (IRR) exceed previously approved and generally acknowledged threshold values which characterizes matured projects. The amount of socio-economic benefit in jeopardy should be compared to the cost increase caused by private sector involvement in financing the project. If, and when, the ratio of the benefits in jeopardy and the cost increase is above 1.0 or exceeds a previously identified and approved limit say 1.5, then, the selection of the project is justified. The motorway concessions are generally evaluated using quite sophisticated cost-benefit or multicriterial analysis, providing a set of efficiency indicators(npv, IRR, Benefit-cost Ratio, etc.) measured against approved earlier threshold values of these indicators attributed to project classified as matured, economically viable or socio-economically justified. The methodology of economic and financial evaluation aiming at preparing transport infrastructure investment decisions are slightly different in case of infrastructure projects intended to be financed entirely publicly or through PPP based on limited recourse financing. In the former case capital recovery or depreciation are not counted generally among maintenance and operation expenditures, since NHA is not obliged to follow corporate accounting practice. In practice, this comparative analysis can not performed due to the lack of professional expertise and experience in the both public authorities and private sector as well. The economic benefits analyses, furthermore, need to cover the commercial and financial analysis as if they are corporate projects with a cash flow and other essential criteria. Carrying out economic benefit analysis combined with political and strategic benefits may not be enough to be criteria of investor s terms and conditions to participate in road projects equitable agreement, need to be counted in the financial and commercial analysis. For the private sector to show interest, a venture must be profitable. For roads, this implies a good income from tolls and perhaps government subsidies as well in the form of shadow traffic or a government guarantee on debt service like the case of the M-2. Toll levels are commonly constrained by the existence of alternative routes that are free. The Kohat tunnel illustrates this point. Many trucks, even laden trucks, struggle over the hill rather than pay the toll to use the tunnel. NHA is already tolling all the national highways and motorways. PPP is not a solution to funding roads. Unless the criteria for the selection of the BOT/PPP projects are established and applied diligently, the costs increase by financing on a BOT/PPP basis will impact negatively on NHA budget. 6-18

205 6.2 Transparent Prioritization Administrative Framework (1) Introduction Transport infrastructure plays a key role in the nation s economic and social development and the economic development of Pakistan heavily depends on the improvement and modernization of key transport systems. High economic loss from congestions and poor quality roads and maintenance and inability to fill the gap between supply and demand for transport services and supporting infrastructure have been of grave concern to the Government of Pakistan (GOP), and these problems need to be addressed by improving governance in the transport sector. The development of an efficient transport system has been hindered due to multiple reasons: One of them is the resource constraints and others include: (i) multiple objectives for medium-term and long-term investments, resulting in misplaced priorities, (ii) poorly justified investments, (iii) lack of implementation capacity and (iv) insufficient private sector participation. Over the past five years the GOP has taken a number of actions to address these key constraints such as the finalization of a new Ten-Year Plan ( ) or MTDF, the formulation of an integrated transport policy, the revitalization of railways and the improvement of new trade and transport facilitation. To strengthen the implementation capacity of federal agencies, provincial governments need to be supported by an integrated national transport policy, streamlined decision-making process and procedures for investment programs and co-ordination mechanisms at various levels. Research and development and institutional and regulatory reforms are also required. Last but not least, the creation of an environment for private sector investment, particularly direct foreign investment (DFI), and institutional and regulatory reforms required for creating market force and attracting private sector participation in railways, national, provincial and urban road networks. (2) Administration of Transport Sector At present, responsibility for transport is divided among four federal ministries, four provincial governments and seven autonomous authorities: Ministry of Communications (MOC) - responsible for the national road sub sector, Ministry of Railways (MOR) - responsible for railways Ministry of Defence (MOD) - responsible for airports and civil aviation, and Ministry of Port and Shipping (MOPS) responsible for ports and shipping. Post and Telecommunications, which was under MOC has been merged into the Ministry of Information and Technology (MOIT). Until 2001 MOC and MOR were separate ministries and they were merged into a single ministry for a brief period of time and they were separated again in Under these federal ministries there are number of autonomous and semi-autonomous organizations, i.e. National Highway Authority (NHA) under MOC, Karachi Port Trust (KPT), Qasim Port Authority (QPA) and Pakistan National Shipping Corporation (PNSC) under MOPS, and Civil Aviation Authority (CAA) and Pakistan International Airlines (PIA) under MOD, all are accountable to their respective federal ministries. At the Provincial level, Communications and Works departments of 4-provinces (Punjab, Sindh, NWFP, Balochistan) are responsible for the provincial road network. Following the implementation of the Devolution Plan, a majority of the intra-district provincial road networks have been devolved to the districts. 6-19

206 (3) Structural Problems of Transport Administration In the absence of a single ministry to deal with all modes of transport the decision concerning the sector development programmes/projects and their prioritization needs to be taken by the central government. Currently, the formulation of development programmes and projects in the transport sector is highly compartmentalized and not based on intra-sectoral priorities. There are multiple federal ministries, provincial governments and autonomous authorities that are responsible for the administration of the transport sector (hereinafter referred collectively to as the Implementation Agencies ). There is no forum of debates amongst these government administrations to ensure an integrated and coordinate approach to the formulation of development programmes and projects. Instead, these sponsoring ministries and provincial governments have been competing for PSDP allocation based on an urgent basis to obtain budgetary support and external assistance, often ignoring the implications on the other sector developments. The result of the lack of inter- and intra-sectoral coordination, as the MTDF points out, is huge economic losses. Beside economic loss, the uncoordinated approach to the selection of the projects and mismanagement of investments hinders social development and causes ecological degradation. Problems could be caused by, to a certain extent, the deficiencies of the implementation capacities but, to a greater extent, to the misallocation of PSDP that have resulted from the lack of inter and intra-sectoral prioritization, lack of monitoring and auditing of the implementation of programmes. In spite of the fact that the transport sector has accounted for 20-30% of PSDP in recent years, Pakistan s public transport systems continue to suffer from poorly targeted investments, neglect of essential maintenance, traditional labour and uncommercial practices and obsolete general purpose distribution systems that have led to severe capacity bottlenecks, high transport costs, poor safety standards and low levels of services. As MTDF points out the industrial and commercial growth and export competitiveness are handicapped by an inadequate and outmoded infrastructure Decision-Making Regarding PSDP Public Service Development Programmes (PSDP) is an annual budgeted programme that is approved by the Central Government. National transport projects can be carried out under the endorsement of PSDP. (1) Programme Approving Bodies Sponsoring Federal Ministries submit their programme proposals to Planning and Development Division and passed on to the Approval Bodies for examination and approval. The approved programmes become the PSDP. a) The National Economic Council (NEC) NEC is headed by the Prime Minister (PM). Its members include Minister of Commerce & Industry, Minister of Petroleum & Natural Resources, Minister of Water and Power, Minister of Education, Minister of Environment, Advisor to PM for Finance & Economic Affairs, Special Assistant to PM Social Sector, Chairman Board of Investment, Chairman Privatization Commission, Chairman Planning Commission, Governor of State Bank and Cabinet Secretary, Special invitations to secretaries and other members. b) Annual Plan Coordination Committee (APCC) APCC is headed by Deputy Chairman Planning Commission and its members include Finance Division, Planning Division, Economic Assistance Division (EAD), Federal Ministries and Provincial Governments. 6-20

207 c) Priority Committee Priority Committee is headed by Additional Secretary Budget Financial Division (Chairman) and its members include Finance Division, EAD and Implementation Agencies. (2) Approval Process of PSDP PSDP covers all social and economic sectors, i.e. infrastructure, social development and finance. Infrastructure includes water, power, energy and transport sectors. Transport sector is comprised of roads, railways, ports and shipping and aviation sub-sectors. Proposals for investment programs are prepared independently by the Implementation Agencies and reviewed and approved by a centralized review and approval mechanism: Priority Committee, Annual Plan Coordination Committee (APCC) and the National Economic Council (NEC). Projects of the Implementation Agencies must be included in the PSDP and they are scrutinized by Central Development Working Party (CDWP) and Executive Committee of National Economic Council (ECNEC) before they are funded. NEC (National Economic Council) APCC (Annual Plan Co-ordination Committee) Implementation Agencies: - Federal Ministries, - Provincial Governments, and - Autonomous Organizations Priority Committee Planning Commission PSDP Implementation Agencies MOF (Ministry of Finance) Source: JICA Study Team Revenue/ CBR Finance EAD (Economic Assistance Division) Donors Figure Approval Process Regarding PSDP Decision Making Regarding Projects (1) Project Approving Bodies a) Executive Committee of National Economic Council (ECNEC) ECNEC is headed by the Federal Minister of Finance and its members include Federal Ministers of economic ministries, Provincial Governors/Chief Ministers or their nominees and Provincial Ministers concerned. The functions of the ECNEC are: To sanction development schemes in the public and private sectors To allow moderate changes to the plan and the plan allocations 6-21

208 To supervise the implementation of economic policies laid down by the NEC or the Government b) Economic Coordination Committee (ECC) of the Cabinet ECC is headed by the Federal Minister for Finance and Federal Ministers of economic ministries as its members. It attends to all urgent day to day economic matters and coordinates the economic policies initiated by the various Divisions of the Government. It keeps vigilance on the monetary and credit situation and makes proposals for the regulation of credit in order to maximise production and exports and to prevent inflation. It gives approval to the projects in private sector and public sector energy projects. c) Central Development Working Party (CDWP) The development projects exceeding a certain financial limit prepared by Federal Ministries, Provincial Governments, Autonomous Organizations, etc. are scrutinized for the purpose of approval by the CDWP which is headed by the Deputy Chairman, Planning Commission and which includes as its members the Secretaries of the federal ministries concerned with the development and the heads of Planning Departments of the Provincial Governments. Federal Ministries which are permanent members of the CDWP should not be represented below the rank of Additional Secretary. Similarly, the concerned Federal implementation agencies should be represented at the level of Head of the Department or Additional Secretary. The schemes approved by CDWP costing above Rs.500 million are submitted to ECNEC for final approval. d) Departmental Development Working Party (DDWP) It a body for approving development project/programmes for federal Ministries/ Division/ Department according to their approved financial limit which is set at Rs. 40 million. It is headed by the respective Secretary/Head of Department and includes representatives of finance division and concerned Technical Section in the Planning and Development Division e) Provincial Development Working Party (PDWP) Each province has a PDWP which is headed by the Chairman, Development Board/Additional Chief Secretary (Development) and includes Secretaries of the Provincial Department Concerned with development, as its members. PDWP scrutinise various projects for inclusion in the Annual and Five Year Plan. It is competent to approve projects up to Rs.5 billion. Projects exceeding this limit are submitted to the CDWP and ECNEC for approval. All projects requiring foreign funding or federal government financing or federal government guarantees are submitted to CDWP and ECNEC for approval. (2) Approval Process and Procedures for Projects Federal projects are approved in accordance with the process illustrated below: 6-22

209 Projects up to Rs. 40 Million DDWP Sanction Planning Communication Appraisal and evaluation of PC- I & P- II Project Rs. 40 to Rs. 500 Million CDWP Sanction MOF Implementation Agencies Submission of PC- I & PC- II Projects over Rs. 500 Million ECNEC Sanction EAD Donors Source: JICA Study Team ECNEC = Executive Committee of National Economic Council DDWP=Departmental Development Working Party CDWP=Central Development Working Party MOF= Ministry of Finance PDD= Planning and Development Division EAD = Economic Assistance Division Figure Approval Process and Procedures of PTPS Projects a) Federal Projects Submission of Projects to Approving Bodies Projects sponsored by the Federal Ministries/Autonomous organizations apply for funding of projects that are included in the PSDP by submitting to the Planning and Development division an original of PC-I/PC/II. The PC-I is a proposal for development Projects while PC-II is Feasibility Study of Proposed Development Projects. A copy of the PC-I/PC-II is sent to the respective Financial Advisor of Financial Division for comments before submitting the same to the members of the DDWP/CDWP. A project proposal by the Federal Ministries/Autonomous organizations must be supported by a statement that the project has been seen and approved by the Secretary of the Ministry concerned. Processing of Projects As soon as a copy of PC-I/PC-II is received by a member of the Planning Commission, DDWP and CDWP, its examination must be conducted expeditiously so that the same is approved/rejected in accordance with the time schedule. So far as the Planning and Development Division is concerned the schedule is as under: Registration and circulation of projects to all the Sections of the Planning Commission and other members of CDWP = 1 day Finalization of comments for consideration by CDWP=4-6 weeks The Planning and Development Division has to ensure that PC-I/PC-II has been prepared correctly and according to the prescribed procedures. In case, the PC-I is found to be deficient it will be returned to the sponsors with the approval of Secretary (Planning)/Deputy Chairman, Planning Commission under intimation to all members of the CDPW. Procedure for Meetings of Approving Bodies The CDWP and ECNEC meet regularly every month and every six weeks, respectively. The procedure for approving projects should be streamlined so that a project is approved within 2 months. The Planning and Development Division provide the secretariat for CDWP. 6-23

210 The minutes of the CDWP meeting are recorded by the Planning and Development Division and circulated to those represented at the meeting and other agencies concerned. The agencies represented on the CDWP are, however, expected to take action required by them without waiting for the minutes. The minutes of CDWP are treated as confidential. The minutes/record of discussion of ECNEC are also treated as secret. However, discussions of ECNEC in respect of PSDP projects would be unclassified unless specially classified by the Planning and Development Division. The approved project becomes eligible for funding from MOF. Funds are released quarterly to the accounts of Implementation Agencies. For a project requiring foreign funding it will be channelled through Economic Assistant Division (EAD) to Donors. b) Provincial Projects Provincial Development Working Party (PDWP) has the power to approve a project up to Rs.5 billion. Provincial Ministries submit PC-I/PC-II to Provincial Planning and Development Department for approval by the PDWP. The approval of a project costing over Rs.5 billion or requiring foreign funding or federal government financing or guarantees requires the approvals of CDWP and ECNEC. In this case the PDWP makes recommendation to CDWP through Planning Commission. CDWP evaluates the project and makes recommendation to ECNEC for approval. After ECNEC s approval the project will be sent back to PPDD for submission to MOF and/or EAD. The diagrams below show the process and procedures regarding provincial projects up to Rs. 5 billion. PPDD Appraisal, evaluation of PC-I & PC-II Projects up to Rs. 5 billion PDWP Sanction Implementation Agencies: Submission of PC I & PC - II MOF Source: JICA Study Team PDWP = Provincial Development Working Party MOF= Ministry of Finance PPDD = Provincial Planning and Development Department Figure Approval Process Regarding Provincial Projects up to Rs. 5 billion Provisional projects valued at over Rs. 5 billion or that require foreign funding or federal government financing or federal government guarantee require the approval of CDWP and ECNEC. Projects costing below Rs.5 billion requiring foreign funding or federal government guarantee are processed through the above bodies and passed on to the Planning and Development Division where they are examined by the various Technical Sections concerned and a Working paper is prepared and placed before the CDWP. ECNEC then approves them by the recommendation of CDWP. The basic principle of review of projects, both at the federal and provincial levels, is that projects are examined jointly and simultaneously rather than in succession. (Refer to Procedure for Preparation and Approval of development Schemes approved by NEC in July, 1959).In accordance with the Procedure, copies of PC-I/PC-II have to be sent by the sponsoring provincial governments to the Planning and Development Division and other members of the CDWP for simultaneous examination. 6-24

211 Provincial Planning and Development: Appraisal, evaluation of PC-I & PC-II Projects over Rs. 5 billion or foreign funding or federal government financing or guarantee PDWP Sanction Implementation Agencies: Submission of PC I & PC - II ECNEC Sanction CDWP Sanction Planning Commission MOF EAD Donors Source: JICA Study Team Figure Approval Process Regarding Provincial Projects above Rs.5 billion Issues for Decision-Making on Transport Sector ECNEC = Executive Committee of National Economic Council CDWP = Central Development Working Party) PDWP = Provincial Development Working Party MOF= Ministry of Finance EAD = Economic Assistance Division PPDD = Provincial Planning and Development Department (1) Characteristics of Decision Making for Projects and Programmes A close examination of the process and procedure for the decision making concerning the programs and projects reveal that there are no institutional checks and balances that determine the intra-sectoral priorities with a bottom-up approach to the budgeting system. Priority Committee, APCC and NEC review the development programmes from the angle of the budgetary, regional, political and strategic compatibilities and conformities while CDWP and ECNEC function as institutional checks and balances and determine inter-sectoral priorities. Determination of intra-sectoral priorities are, therefore, left to be unchecked or passed over to the Cabinet or Prime minister. In the absence of an approved national transport policy the prioritization of investments in transport sector largely depends on an ad hoc and highly political decision. (2) Needs for a National Transport Policy and a Intra-Sector Co-ordination The central government decision-making process for investments in the transport sector may have developed deficiencies like poorly targeted investments and maintenance neglect, etc. These deficiencies are also caused by the absence of approved national transport policy and the intra-sectoral coordination mechanisms. The sector development and investment plan needs to be prepared based on long-term objectives and within the framework of an approved national transport policy. Furthermore, the formulation of the investment programmes need to be initiated by the sector s Implementation Agencies and presented to a high level forum for debate so as to define the needs and requirements and determine the priority. In the absence of a single ministry the decision on the investments may be politicized and the competition among the Implementation Agencies for PSDP allocation intensifies as the resource constraints increase. Whether a national transport policy and an intra-coordination mechanism are the issues to be addressed immediately or not there is an advantage tohaving an approved national transport policy and coordination mechanism. Under the new arrangements the central government will be able to focus more on the programmes rather than on individual projects. The 6-25

212 attention of the government on planning, coordination, financing and regulating on programme basis is urgent in the case of the transport sector, and it must cover major areas, particularly neglected ones such as highway safety, urban transport systems, R&D, human resource development, institution building and organizational reform Institutional Reform (1) Introduction The transport sector is currently administered by four federal ministries, four provincial government and six autonomous authorities. The absence of a single ministry Ministry of Transportation that encompasses all subsectors has created negative effects on the improvement and modernization of key transport systems in Pakistan. It is a well known fact that the railways and roads have been competing since 1976 while the Karachi and Qasim Ports have coordination and cooperation problems. Under these circumstances it is necessary to establish a forum where these competing federal agencies can meet regularly and debate the issues and problems relating to transport. One of the negative effects of the misallocation of PSDP and maintenance neglect is the current situation where the maintenance backlog has become an alarming proportion and the condition of 47% of the national highway network which caters to more than 70% of the total inland traffic, is classified as poor. Improvement on the NHA management of maintenance now needs to concentrate on the research and development in construction materials and design standards applicable to Pakistan. (2) Negative Effect of Transport System on National Economy The formulation of development programmes and projects in transport sector is highly compartmentalized. There is no institutional mechanism that facilitates the coordination amongst the federal ministries, autonomous authorities and provincial governments responsible for the transport sector to ensure an integrated and coordinated approach to the formulation of sector development programmes. The MTDF makes a case by stating that the performance of the transport system has been poor, with high economic losses from congestion and poor quality roads and a mismatch between supply and demand for transport and supporting infrastructure. There are logistics constraints, which impede competitiveness of the country s trade and industrial development. It is estimated that the inadequate and inefficient transport system is imposing a cost to the economy in excess of Rs.220 billion annually or 8.5% of the GDP, constraining economic growth, reducing export competitiveness, and hindering social development (Prefer to MTDF p.442). The sorry state of the transport system described in MTDF should not be taken lightly. Beside the enormous economic loss the negative effects of unplanned system and mismanagement of investments hinder social development and ecological degradation. Problems could be caused by, to a certain extent, the deficiencies of implementation capacity but, to a greater extent, to the monitoring and auditing the implementation of programmes. The absence of an integrated transport policy and lack of inter-and intra-sectoral coordination are also root causes of the negative effects of investment. In any account, the Government, considering the financial constrains, needs to take radical steps to minimize the losses and liabilities caused by the transport administration such as those pointed out by MTDF. The transport system should contribute to rather than hinder economic growth and the problems will persist unless steps are taken to remove the root causes. Some of the measures which are imperative would be the institutionalization of intra-sectoral coordination and cooperation throughout the PSDP and PSDP project approval process. (3) Needs for a National Transport Policy Lack of the co-ordination efforts by the federal ministries, provincial governments and autonomous authorities in charge of transport systems could be one of the causes for the 6-26

213 inability of the government in the optimum utilization of the financial capacity of the country. In this regard, MTDF stated that The development of an efficient transport sector has also been hindered due to misplaced priorities and the absence of an approved transport policy (Refer to MTDF p.442.). The role of an approved national transport policy can play in the PSDP and PSDP projects should not be underestimated. The design of the Policy needs to focus, first, on the few major areas to achieve maximum return on the investments already made. The policy need to be based on the scientific principles and techno-economic reality. A well conceived policy will provide a framework for the planning, financing and implementing sector development and a base on which the distribution of tasks amongst measures the central government, federal ministries, provincial governments and autonomous authorities for the mitigation of the negative effects caused by the past mismanagement of investments. Furthermore, the problems of the current state of the transport system are, to a large extent, due to the PSDP and PSDP projects approval process and the implementation capacities. Decision-makers, in this regard, need to factor in the capacities of the implementation agency in allocating funds and this will require a strengthening of monitoring and evaluation of project implementation. Should a national transport plan and intra-coordination mechanisms be timely and properly constituted, the central government will be able to focus on the programme rather than individual projects with more attention on the critical areas such as traffic safety, urban transport systems, human resource development, R&D, institution building and regulatory reforms. (4) Need to establish a Transport Coordination Mechanisms The centralized mechanisms for review and approval of PSDP are mainly concerned with checks and balance of inter-sectoral and macro-economic contexts. Once the development programs for each subsector are allocated, other centralised project review and approval mechanisms (CDWP and ECNEC) provide institutional checks and balances and determine inter-sectoral priorities. The coordination among the ministries must be done before the PSDP and debated on the matters relating to the integration of all modes of transportation on which the sectoral prioritization of investment are based. Issues and problems of intra-sectoral co-ordination was addressed in the past studies. For example, a national transport plan study undertaken by JICA in 1995 expressed 1 concern over the lack of intra-sectoral coordination and cooperation and recommended restructuring of a number of ministries into a single Ministry to handle all modes of transport. The rationale behind the proposal was that such a restructuring would provide, at the ministerial level, a forum for debate of transport related issues and the pursuit of an integrated transport policy and create a platform for liaison with other ministries and with the Planning Commission on the transport needs and implications of other sectors of the economy. A similar proposal was made in 1999 by the World Bank and, in its Transport Sector Development Initiative 2 (TSDI) to create of a National Transport Policy Board and a unified Ministry of Transport that encompasses all subsectors in order to fill the gap. The ADB, in a study 3 conducted by a short-term consultant in 2003, put forward a set of recommendations, including the establishment of a high-level Transport Council to a working-level Transport Coordination Committee. Subsequently, ABD organized a Technical Assistance in 2004 to assist the Government in the formulation of a comprehensive transport policy as a follow up to the findings of the TSDI. No progress has been made to date. 1 Study on National Transport Plan in the Islamic Republic of Pakistan, JICA 1995, Final Report/Volume II, p Transportation Sector Development Initiative, World Bank National Transport Policy-Assessment of Critical Transport Sector Needs ADB

214 To address the issues and problems of a national transport policy and coordination the JICA study proposed the following institutions. (5) The Establishment of Transport Coordination Mechanisms It is recommended that in order to remedy the current status of the transport system and create sustainable planning and implementation for sector development programmes, a three-tiered coordination mechanism be created consisting of (i) a high-level Transport Policy Council, (ii) a working-level Transport Coordination Committee, and (iii) an Institute for Transport Policy Studies. a) Purposes and functions Transport Policy Council The Council shall consist of Chairman, Planning Commission, Minister, Ministry of Communication, Minister, Ministry of Railways, Minister, Ministry of Defence, Minister, Ministry of Ports and Shipping and Provincial Governors/Chief Ministers or their nominees from four provincial governments. The Council is to formulate a national transport policy and strategy and to facilitate coordination among the sectors in accordance with the national transport mandate. Transport Coordination Committee The Committee consists of a Deputy Chairman, Planning Commission, Joint Secretaries, Ministry of Communication, Ministry of Railways, Ministry of Defence, Ministry of Port and Shipping, representative from Finance Division, Economic Assistance Division (EAD), Provincial Governments and autonomous authorities. Institute for Transport Policy Studies (ITPS) The Institute is to provide a secretariat to support the Council and Committee and carry out research and development to provide technical support to the Council and Committee in the policy formulation and coordination. The new Institute will have four functional departments; Research, Information, Planning and Administration: Research Department will focus on the research and analyses of the problems and needs of the country s transport sector development. It will also conduct research and studies on the international practices of the improvement and modernization of transport systems, including the institutional and regulatory reforms, privatization, private sector project financing (BOT and PPP). It will be responsible for the organization of seminars and workshops and the publication of annual research report and bulletins. Information Department will focus on the collection and dissemination of information and data relating to transport and traffic and the establishment of a data bank in which all transport and road traffic related statistics, including traffic volumes, number of traffic accidents, vehicular registrations and driving licenses, etc. are kept. The Data Bank will also keep all the results and findings of transport and traffic studies conducted by bilateral and multi-lateral aid agencies. Planning Department will focus on the financial, economic and technical evaluation of sector development programs and projects, including the implementation capacities. It will also provide technical and substantive support to the Council during the formulation of a national transport policy. Administration Department will be responsible for the accounting, human resource development and public relations, including conduct of transport projects, planning course/technical Lectures/Seminars in cooperation with the Research Department. 6-28

215 Transport Policy Council Transport Coordination Committee Institute for Transport Policy Studies Research Department Information Department Planning Department Administration Department Research and Studies: Transport Systems Data Bank: Transport and Traffic Statistics National Transport Policy Analysis Accounting and personnel Seminar, workshop & Int l Conference Study on Project Implementation Cap. Regulatory and Institutional Reform Public Relations Business Development Publication of bulletin & Annual Report Library and Documentation Evaluation and Analysis of Projects Contract and Agreement Source: JICA Study Team Figure Transport Policy and Coordination Mechanisms b) Utilization of the National Transport Research Centre (NTRC) The existing National Transport Research Centre (NTRC) was established in 1974 as a technical support section of the Planning Commission to provide the needed research and development for planning and approval of transport projects. The mission statement of NTRC was to achieve self-sufficiency in the fields of transport planning, road engineering and road safety through indigenous R&D work. NTRC was collecting information and data relating to transport sector for the country. This included historical data regarding road designs, vehicular accident and driving licenses. NTRC also acted as a counterpart to a various national and international agencies including this and past JICA Studies on Pakistan Transport Plan. It would be a logical move to restore the much needed R&D activities in Pakistan s transport development and, in establishing a new national institute as a part of the new transport policy and coordination mechanism, the existing qualified professional staff and assets of the NTRC could be transferred to the new Institute except for those involved in the R&D on pavement design. The NRTC s existing road research staff and material testing facility could be transferred to the proposed Highway Research and Training Centre. 6-29

216 6.3 Pursuit of Road Safety Current Situation (1) Regional Traffic Safety Motor vehicle crashes are currently ranked ninth among the world's disease burdens, and is projected to rank third by Developing countries are the site of nearly three quarters of the ten million motor vehicle crashes annually. Asia and the Pacific region suffer 44% of the world s road deaths but have only 16% of the total motor vehicles. (Reference Report on Vulnerable Road Users in the Asian and Pacific Region, ADB, 1998). These numbers are based on official statistics and under-reporting of road fatalities is extensive, in some cases (e.g. China) it is estimated that the actual number of road deaths is over 40% greater than reported. Bangladesh has the highest rate of deaths per vehicle population whilst Malaysia is reported to have the highest fatality risk as a percentage of the population. (See below) Motorisation has increased at a rapid rate in Asia, largely with the growth in motorcycles. The number of motor vehicles doubled in Pakistan over the last 20 years. The personal risk of being killed in a road crash has more than doubled in most Asian countries. DEATHS PER 100,000 POPULATION DEATHS PER 10,000 MOTOR VEHICLES Malaysia Thailand (2) Economic Costs Sri Lanka India Indonesia Nepal Pakistan Bangladesh Philippines Figure Traffic Accidents Death Rate in the World Bangladesh Sri Lanka India Pakistan Thailand Malaysia Indonesia Philippines Road deaths and injuries should be reduced for humanitarian reasons but on economic grounds alone they consume financial resources. Road safety appraisals illustrate the economic benefits of investing in national road safety programs, apart from the humanitarian aspects. A previous study (Four acre and Jacobs, 1977) estimated road crashes cost on average of 1% of a country s GNP, but a higher range, 1 to 3% has been suggested by the World Bank and others. The calculated cost of road crashes can vary with the valuation method used, and at least six different methods have been proposed. (Hills and Jones-Lee 1981, 1983). This is significant, as the cost attributed to road accidents must be balanced against the expenditure on prevention or minimisation of traffic injury and or fatalities. Two general approaches are: gross output or human capital (HC) method (loss of potential earnings) willingness to pay (WTP) method If accident costs and values are intended for use in cost-benefit analyses then the most appropriate method is willingness to pay. However, there is difficulty in obtaining reliable empirical estimates. In this case the gross output approach is preferable but it must be modified to capture the humane aspect by a further allowance for pain, grief and suffering of those involved in road crashes. It is generally accepted that the annual cost of road crashes 6-30

217 is about 1% in developing countries, 1.5% in transitional countries, and 2% in highly motorised countries. (3) Non-Reporting of Accidents A study on motor vehicle injuries in Pakistan has found that 61% to 86% of such injuries may go uncounted in official police statistics. ( Injury Prevention, A. Hyder, Johns Hopkins Bloomberg School of Public Health, September 2000.) The study's results indicate that the numbers of motor vehicle crashes, injuries and fatalities in the country have increased steadily during the 40-year period after 1956, and that commercial vehicles contribute disproportionately to these injuries. The investigation shows that the total number of motor vehicle crashes increased 14-fold between 1956 and 1996, while the number of lives lost in crashes increased 16 times. The report also stated that buses and public service vehicles, which in Pakistan account for 12 to 35% of the total number of registered vehicles in any given year, are involved in over 60% of motor vehicle crashes and 90% crash deaths. Interviews with motor vehicle crash survivors showed that 14% of crashes were investigated and registered by the police, whereas a previous study found that 39% were investigated by the local city police. Since commercial vehicles travel many more kilometers annually than cars, their risk for crashes is heightened. As commercial vehicle production has not kept pace with population growth existing vehicles in this category are increasingly overloaded, further contributing to increased injury and fatality rates per crash. In the event of an accident, the injured are treated by the local emergency response services. This means that an accident on a motorway or national highway may have to wait several hours for fire brigade and ambulance facilities to arrive. Motorway police, and regular police, have no facilities or training to deal with medical or hazardous situations. (4) Legal Situation The need for strengthened legislation has been recognized and action was taken through Ordinance No. XL of year 2000 with the passing of the National Highways Safety Ordinance, This ordinance is supplemented by the Highway and Motorway Code which is a booklet issued by the National Highways and Motorway Police, under the Ministry of Communications. It updates and replaces the Pakistan Highway Code of 20 years earlier. This is a general guide meant to be used by driving schools in teaching persons to drive and pass the driving test. It is not clear that this extends to all roads and all road users who come under the authority of the district and city police forces Policies for Road Safety (1) Main Issues Requiring Action in Pakistan The NHA have recognized that there are many issues requiring action and detail them in their Annual Report. These include: Fragmentation of responsibility for road safety issues Lack of reliable credible information and data Inadequate coordination of remedial measures NHA have identified several fundamental factors as being responsible for the high accident rate: Road conditions particularly surface, shoulders and markings Need for many single lane roads to be minimum of two vehicle width, with adequate shoulders, and provisions for night driving 6-31

218 Poor driving standards particularly at night when drivers use high beam or extra lights with no regard for oncoming traffic No proper driving instruction program or driving test procedure Weak enforcement of traffic rules and regulations No effective vehicle registration system, poor licensing system and weak inspection system for old vehicles for road worthiness/safety Overloading of vehicles: too many passengers on public transport and too heavy a load on commercial vehicles Public travelling on trucks and other forms of commercial vehicles (2) Remedial Measures The following measures have been identified as necessary steps to improve traffic safety, reduce fatalities and injuries. a) Actions by Federal Government A public awareness campaign to change attitude of drivers and general road users Consensus building between authorities (NHA, police) and commercial road users to reach agreement on practical and acceptable measures to reduce overloading Provision of affordable financing scheme to allow commercial transporters to replace old vehicles with new Consistent training of highway (NHA) provincial and local traffic police b) Actions by Provincial Governments Initiate improved vehicle registration system to prevent prolonged use of over age vehicles Improve vehicle licensing procedure Improved road worthiness testing so vehicles which have been structurally modified after registration are identified Improvement of driving instruction schools Enforcement of driving test procedures to obtain licence under uniformed and consistent rules Improve personal licensing procedure c) Actions by NHA Improve signage and use internationally accepted symbols Ensure signs are not just nominated in English but in local language; maybe better to use internationally accepted signage and symbols. More safety measures on roads such as lane markings, cats eyes, safety barriers and hard shoulders Adequate provision of crossing points for pedestrians such as foot bridges or underpasses with provision for movement of animals and hand drawn vehicles. d) Actions by Police Stronger enforcement of traffic rules and regulations Local police and motorway police to be provided with more facilities and training to deal with medical or hazardous situations Enforcement of passenger number restrictions and stopping places of public transport Enforcement of prevention of overloading of buses, commercial vehicles and use of trucks as passenger vehicles Enforcement of speed limits Removal of encroachments that effectively reduce carriageway width Strict control of agricultural vehicles on highways, particularly at night, with adequate lights and rear markings such as reflectors Use of correct lighting on vehicles at night: that is red lights on rear and white lights on front, not the opposite; prohibition of bright lights on rear of vehicles; enforcement of use 6-32

219 of dipped headlights; and unnecessary use of spotlights on front of vehicles. Strict control of use of agricultural vehicles for goods movement and carrying of passengers on narrow urban / rural roads Provision of new, or strengthening of existing, emergency response services such as ambulances, paramedics, fire brigade and hazardous situation response teams. Training The above aspects give a comprehensive list of issues to be addressed. It may be appropriate to hold seminars and training exercises for specific groups, such as: Traffic safety education in primary, junior and high schools Periodic Traffic Safety Campaigns by the police in cooperation with local people and NGOs such as ARUP Seminars for authorities such as police and administrators Round Table working groups with road users such as commercial operators and transporters 6-33

220 6.4 Intermodal Facilities Development Current Situation (1) Introduction In an efficient strategic transportation environment multi-modal terminal/facilities are essential and have a definite role to play. These facilities provide an interface between long haul and short distance movements of people and goods. For an efficient and cost effective use of transport infrastructure it is important to make use of high capacity transport systems for medium to long distances, where as for shorter journeys of people from these multi-modal facilities to inner city area or for the distribution of goods to local shops/markets or even homes, the use of low capacity transport systems is most desirable. The location, design and operation of these facilities need to be optimized to keep the cost of transport down. In the case of strategic transportation (inter-city - which is the subject of this study) such terminals have a vital role to play. For the movement of freight, these terminals include seaports, rail goods yards and freight terminals, and dry ports (inland freight terminals with facilities for customs clearance and processing of documentation). In the case of passenger transportation such terminals include airports, railway stations, and long distance bus terminals. Seaports, airports and railway stations have been studied and discussed under the respective headings of these transportation systems. This section is therefore devoted to cargo/freight centres (dry ports) and passenger terminals. (2) Freight Terminals in Pakistan Pakistan has two major seaports and both of these are located at the southern end of the country. The rest of the country relies on these ports for imports and exports. But the majority of the country s population centres and industrial heartland (except the port city of Karachi) lies in the province of Punjab at a distance of 600 to 1200 km from the ports. This requires efficient movement of goods over land for import and export over land. Because of excessive bureaucracy, the cost of land access to/from port within Pakistan could easily be several times the cost of maritime transportation to the origin/destination country. The main reasons and issues for this could be summarized as: Lack of containerization, mostly due to lack of container handling equipment inland, and lack to transportation facilities for the movement of containers. Therefore, it is essential that country s inland transportation infrastructure matches that of the maritime infrastructure. Non-Simplification of trade/customs documents: In Pakistan this seems an impossible task, as in most cases it is considered a job creation scheme, whether any document(s) is necessary or relevant is neither understood by authorities, and neither does the public have the right to question the Government officials. e.g. someone clearing goods at Lahore airport may have to make several cost charges at several points, as each agency has its own levies and does not trust an other agency/department to collect levies on their behalf, with the inherent reason of receiving commissions at each stage of payments. Lack of Efficient Freight Forwarding Agencies for efficient collection and delivery of goods where a third party collects and deliver goods. In Pakistan this third party logistics is almost in its infancy, and mostly used for domestics movement of goods, and a little for import and export. However, there are agencies that will handle your goods and carry out custom clearance for both import and or export. In the past (early seventies) the port handling and customs clearance was so poor that it lead to ports being clogged with goods needing approval for both import and export. As result, ships had to wait for days, further adding to the cost of transportation, and Pakistan 6-34

221 continuously lost its competitiveness in import and export. Mainly in order to alleviate the clogging of the port rather than to improve the efficiency of inland transport, the Government started to set up dry ports further inland, where customs clearance blessings could be obtained rather than only at the port. There are several such ports dotted around Pakistan, some closer to big cities, some within the city (e.g. Lahore), while the location of others had benefits to some third parties, and had nothing to do with the efficient handling and carriage of goods. In order to understand the operation of these ports traffic surveys were conducted at ten (10) dry ports in Pakistan. Table below summarises the survey results. It can be seen that none of these ports handled large volumes of goods by any standards. The highest volumes were observed at Lahore, Faisalabad, and Port Qasim itself. Even the traffic at Karachi dry port was found to be less than that observed at other Inland sites, given that Karachi is the biggest metropolis of Pakistan. PTPS study examined these results. As the traffic volumes were so low at all these centres, only qualitative and collective judgments could made about their location, use, operation, and future role as a part of this strategic study. Any close analysis and approach would need further detailed analysis and more data collection, for that dry port. This was considered to be not necessary for this study. Table Summary of Dry Port Traffic Survey Results Dry Port City Survey Date Total (In+Out) Trucks Trucks Interviewed Lahore 30-August Karachi 3-September Quetta 5-September Peshawar 1-September Multan 10-September Rawalpindi 6-September Hyderabad 31-August Port Qasim 3-September Faisalabad 2-September Source: PTPS Traffic Surveys (3) Long Distance Bus Terminals In almost every city of Pakistan there is a long distance bus terminal. The main reason is that most of the inter-city travel is by public bus, due to low car ownership, high cost and low access and poor service of railway, and very high cost travel by Air. The main traffic survey carried out for PTPS revealed that on almost all major/minor intercity roads about one-third of the traffic is public buses. This proves the points made in the above paragraph, about the use of buses as almost the only means of inter-city travel. The operation of intercity public buses is almost entirely in private hands, with little or no government subsidy. However, the fares are set by the Government, and generally obeyed by the operators. Such intercity bus services are also available in a variety of level of services. That varies from non-stop comfortable/ convenient air conditioned services to over crowded buses with passengers occupying every inch of space, including the roof. In any case the majority of these services operate out of bus terminals. The high-end of the market tend to have their own terminal, operated by the bus company exclusively for their own company buses. Whereas the lower end of the market operations start and stop from Public bus terminals, usually provided and operated by city authorities. These terminals are usually located with reasonable access to local intra-city transport services. In the case of Lahore, a nice terminal was built and operated by the city authorities in the mid-1960s. Now it is considered a disgrace for such a historic city, and what makes it current condition seem even more 6-35

222 unbearable is its close proximity to world class monuments such as Badshahi Mosque and Lahore fort. Hence a lot could be proposed for such termini. The surveys and comments from passengers noted during the interviews from other cities were also less than encouraging Policies for Intermodal Facility Development (1) Freight Terminal Only in the case of Lahore could it be said that the city needs a better, well planned, and operationally efficient freight terminal. Such a center should combine the handling of both international and domestic goods movement operation at one location. The location of such a terminal would have to be out side the city, and not within the city link to the existing terminal. The most suitable location from a simple qualitative assessment is somewhere north of the River Ravi with access to National Highway N-5, Motorway M-2, and the Lahore Sheikhupura Road and, especially, the railway Junction of Lahore. As from such a location the terminal could serve both the domestic market of Lahore and at the same time act as a regional collection and distribution centre for the Northern areas of Lahore district, and the districts of Narowal, Gujranwala, Sheikhupura. These districts do have considerable industrial outputs for transportation to the rest of Pakistan and abroad. The main advantage of this location is the excellent road and rail accessibility it offers for the movement of long haul operation and at the same time access to Metropolitan Lahore would be easy and convenient. In order to promote refrigerated transport, investment in cold storage warehouses is necessary at the two ports in Karachi and freight terminals in major large cities. As the capital cost of cold storage facilities and the maintenance cost are expensive in general, it is necessary to establish a multi-modal transport system for refrigerated transport, namely, cold chain. Railway should be included in the cold chain and cold storage warehouses should be constructed in dry depots of Pakistan Railways. (2) Long Distance Bus Terminal General amenities at these locations should be improved for convenience of passengers and for the access/egress of local distribution modes of transport. Relocation of such terminals is not necessary the answer, the answer lies in controlling the activities which takes place within the confines of the bus terminal area, which could easily be carried out elsewhere, such as overnight parking, routine maintenance and oil change, etc etc. Their operation could be enhanced by making them public/private control, where private sector has vested interest in its up-keep and smooth operation. A single bus terminal from which both low and higher class services could operate is also more favourable than allowing the high-end of the market its own luxury confines. In such cases some cross-subsidy for social reason could provide a wider choice of services to more customers. Thus improving the access to public of all types of services. Bus Terminal location(s) could be more than one for a single city depending upon its geographical size, location, geographical constraints of access to/from inter-city bus routes, and the volume of demand from each direction or inter-city route. Location of local distribution modes is also essential, and should be fully taken into consideration. An integrated intercity-bus and local mass transit system could be ideally planned, located and operated by single public/private authorities for the best interest of the public at large. 6-36

223 6.5 Cross Border Facilities Development Current Situation (1) Introduction Pakistan has common borders with four countries, namely, Iran in the west, Afghanistan in the north, China in the north east and India in the east. The main overland trade routes with these countries are: 1. Taftan (Balochistan) (Pak-Iran border) 2. Chaman (Balochistan) (Pak-Afghan (South)) 3. Torkham (NWFP) (Pak-Afghan (North)) 4. Sust (Gilgit, N.A.) (Pak-China) 5. Wagah (Punjab) (Pak-India) The movement of vehicles from neighbouring countries is regulated by bilateral agreements on a reciprocal basis. In all cases, vehicles of Pakistan and neighbouring countries are allowed up to the nearest custom posts which are, in all cases, located well inside the countries. The conditions at each location are briefly described below. a) Taftan (Pak-Iran) The customs post for Taftan is located at Quetta. Iranian trucks are allowed up to Quetta, 635 km inside the country and Pakistani trucks are allowed up to Zahidan, 100 km inside Iran. They operate on Carnet de Passages en Douane, issued by Automobile Associations of the two countries on a reciprocal basis. The vehicles to and from Quetta are escorted by Customs staff stationed for that purpose. However, some scrap from Iran is downloaded at Taftan where NLC has built a scrap yard. There is a nominal Customs staff at Taftan to check documents and arrange escort for movement to Quetta. The Immigration authorities check passports and visas at the border. Security at the border is provided by paramilitary forces, FC, rangers, etc. stationed at the border who are responsible for opening and closing of the gate at the mutually agreed timings on both sides. The border is open from dawn to dusk. Pakistan and Iran are also linked by rail. There is a broad gauge line from Quetta to Zahedan (732 km). There are two passenger trains a month, running from on the 1 st and 15 th of every month from Quetta to Zahedan and 3 rd and 17 th from Zahedan to Quetta 1. However, they carry few passengers, as buses on the route take much less time (less than 12 hours) and charge less. In addition, there are two or more goods trains a month with wagons of 20 ton capacity. Customs formalities by Pakistan Customs are performed at Taftan Station on the Pakistan side of the border and on Iran side of the station by Iranian Authorities. b) Chaman (Pak-Afghan) At Chaman, Custom s post is located in the city 3.5 km away from the border. On the Afghanistan side, the nearest town is Spin Boldak, 8.5 km inside Afghanistan, but the main Custom Post is at Kandahar where most of the imports and exports are processed. Afghan trucks are allowed upto Chaman in Pakistan and Pakistani trucks can go up to Kandhar. However, due to security conditions in Afghanistan, few Pakistani trucks go to Afghanistan. Most of the goods are carried by Afghan trucks. Chaman is also linked by rail by a broad gauge from Quetta. Out of the distance of 142 km, 60 km are double track from Gulistan to Chaman. The rail passes under the Khojak Pass through the longest tunnel in Pakistan. There is a daily passenger train service in each 1 Pakistan Railways, Time and Fare Table, Nov April

224 direction and numerous goods trains, according to traffic requirements. Transit trade of Pakistan moves by rail only in accordance with the Agreement of 1965, which recognises two border points only, namely, Torkham and Chaman. Goods arriving by train are transhipped at railway yard where a separate customs post is located. Onward, goods vehicles are escorted by Customs Authorities up to the Afghan border. c) Torkham (Pak-Afghan) Torkham handles the largest amount of cross border traffic in the country. Its Custom post is located in the west of Peshawar beyond the famous Khyber Pass. As for Chaman, Afghan trucks can come up to Peshawar from where goods are transshipped to rail or road vehicles. They carry mainly dry/fresh fruits, vegetables, poultry, marble, minerals and so on. Similarly, Pakistan trucks can go up to the nearest Afghan custom post at Jalalabad. However, in view of current security situation in Afghanistan, few do that. The major cargo items are cement, steel, oil, machinery, etc. Peshawar is the main rail head in the north. All Afghan transit goods which arrive from Karachi by rail are moved to transit sheds at city and cantonment stations from where they are loaded on trucks for onward movement. A truck terminal is also located near a cantonment railway station for other than transit goods to and from Afghanistan. Customs clearance is done at city and cantonment railways stations and truck terminal/dry port in the city. The vehicles cleared by Customs in Peshawar are sealed and escorted to the border. There is some custom staff at the border as well for receipt and dispatch of vehicles. They check seals and in certain cases goods as well and let the vehicles cross the gate. The security and opening/closing of gates is the responsibility of paramilitary forces stationed there for that purpose. The gate is open from dawn to dusk. Because of traffic congestion, trucks are not allowed on roads in the city during daytime. They have to wait for to enter and leave the city, sometimes up to 12 hours. Photo: Torkham Border Post d) Sust (Pak-China) The Pak-China border is located at the Khunjerub Pass, 4,600 m above sea level. Sust is a Custom and Immigration post 75 km from the border at 1,800 m altitude. The border is snow covered in winter and becomes impassable frequently. Smooth traffic movement is only assured in summer only (May-November). There is only security staff at the border who check gate passes and let the vehicles go. As for other places, Chinese trucks are allowed up to Sust and Pakistan trucks can go up to 6-38

225 the nearest custom post in China, 100 km inside the country. However, the movement of vehicles is more restricted here. Only vehicles of designated transport agencies of the two countries can operate vehicles. The agency responsible on the Pakistan side is Northern Area Transport Corporation (NATCO). They also operate passenger coaches. Similarly, there is a Chinese state agency operating trucks and coaches. Return loads are not allowed by either country. Chinese vehicles bring their goods to Sust and go back empty. Similarly, Pakistani vehicles go up to Chinese the nearest Chinese Custom Post and come back empty. A warehouse has been built at Sust with the help of China where transhipment is carried out. Photo: Khyber Pass e) Wagah (Pak-India) Wagah is located 28 km from Lahore city centre. The only trade allowed at Wagah is some Pakistani vegetables and poultry and Afghan dry and fresh fruits to India. The goods are unloaded on the Pakistan side, inspected by custom staff there and carried by hand by Pakistani security cleared labour across no man s land and then handed over to Indian labour for clearance by their Customs and onward movement. At present, only relief goods from India for the large earthquake that hit the Kashmir area of Pakistan on October 8 th, 2005 are allowed back-to-back loading/unloading. The border is open from dawn to dusk. There is also passenger traffic including regular buses connecting Lahore and Delhi two times a week both by Pakistani and Indian bus companies (four round trips in total). They cross the border on foot, completing custom and immigration formalities on both sides. Tourist cars can pass the border based on the usual Carnet de Passage procedure. A significant amount of import and export goods are carried by rail. Wagah rail station is located some two km west of Wagah road crossing. There are two trains both incoming and outgoing every week. Pakistani and Indian rolling stock is used on a six-month rotation basis. Each train consists of 10 passenger cars (capacity 600 per train) and 2-3 freight cars (one 20 foot container per car). Although there are no legal constraints on the cargo items imported/exported, no high value or manufactured goods are being traded. Customs formalities of this traffic are carried out at Wagah railway station on the Pakistan side and Atari Railway station on the Indian side. 6-39

226 (2) Present Traffic Volume a) Cross-border Traffic Table summarizes the results of the PTPS field survey which was conducted from August 30 th to September 8 th, 2005 on five (5) cross-border points between Pakistan and neighbouring countries. Table No. of Vehicles Counted and Goods Tonnage Estimated Across Border Posts, 2005 Taftan Chaman Torkham Sust Wagah Total (Iran) (Afghan) (Afghan) (China) (India) No. of Vehicles/day motorcycle car minibus large bus light truck medium truck heavy truck container truck agriculture equipment total Goods Tonnage/day motorcycle car minibus large bus light truck medium truck heavy truck ,396 container truck ,191 agriculture equipment total , ,879 Note: both incoming and outgoing directions Source: PTPS field survey Judging from the results, the volume of cross-border traffic remains relatively low. Only Torkham has higher levels of traffic, with about 400 vehicles a day and 700,000 tons of goods per year. This accounts for about 70% and 50% of the total Pakistani cross-border traffic for vehicles and goods tonnage, respectively. Particularly with India, road traffic volume is still minimal despite the current government initiatives to improve the relationship between Pakistan and India. Bus and/or passenger coach are also operated across the border. Although details are yet to be confirmed, the following is known: With Iran, passenger buses operate several times a month between Quetta and Zahedan With Afghanistan, a bus is operated reportedly once a day through Chaman between Quetta and Kandahar. But this was not recorded in the PTPS traffic count survey. Through Torkham, five (5) regular bus services are available daily between Peshawar and Kabul. PTPS survey counted 16 minibuses and 24 large buses a day for both directions. With China, the PTPS survey counted four (4) minibuses and two (2) large buses a day for both directions. Although the Pak-China agreement on transit traffic refers to regular passenger coach services, their frequency is unknown. With India, there are four (4) regular round bus services between Lahore and Delhi through Wagah. 6-40

227 Regarding rail traffic, the following is known: With Iran, there are two (2) regular round services of passenger trains a month through Taftan between Quetta and Zahedan. More goods trains are operated on the same route. With Afghanistan, one (1) round trip by a passenger train and several round trips by goods trains are operated every day up to the Chaman border. No train services are available at the Torkham border (upto Peshawar only). With China, there is no railway link. With India, there are two (2) round trips of passenger cum goods trains a week between Lahore and Delhi. b) Commodity Trade with Neighboring Countries Table shows the commodity trade in 2003 between countries of the Region. Table Commodity trade between countries of the Region, 2003 US$ Million (from) / (to) PAK IND IRA AFG CHI KAZ KYR TAJ TRM UZB Rest Total Pakistan ,579 12,695 India , ,890 63,029 Iran , ,086 33,788 Afghanistan China 1,503 3,674 1, , , ,228 Kazakhstan , ,071 12,927 Kyrgyzstan Tajikistan Turkmenistan ,503 3,720 Uzbekistan ,122 3,725 Rest of the World 13,303 73,099 22, ,966 6, ,183 2,501 Total 15,549 77,201 25,638 1, ,760 8, ,450 2,964 Source) compiled from Commodity Trade Statistics Database, UN and World Development Indicators, WB Pakistan s commodity trade with adjacent countries of the Region is not active so far. The largest amount of exports to neighbouring countries is to Afghanistan, but this is still only about 4% of total exports. The largest amount of imports from neighbouring countries is from China, which accounts for about 10% of the total. Most of the trade with China is seaborne, and it has little to do with cross-border transport. The trade with double-landlocked Central Asian States is still at a very low level except for the imports to Pakistan from Kazakhstan. This is considered to be oil and other mineral products. Apart from Pakistan, the regional trade seems to be dominated by China. Its trade with India, Iran and Kazakhstan is significant and is growing rapidly. (3) Current institutional Arrangement As to cross-border transport, Pakistan has entered a bilateral or multilateral agreement with neighboring countries as briefly described below: a) With Afghanistan Pakistan first entered a transit cross-border trade agreement with Afghanistan in However, in 1965, a new agreement came into force. Actually the new one is an amendment of the old one, but a mixture of both is used as customs formalities at present. The new agreement stipulates the following, among others: guarantee to each other the freedom of transit to/from their territories designates two routes, i.e. Peshawar Torkham and Chaman Spin Boldak 6-41

228 impose no taxes, duties and charges of any kind except actual transport and administrative expenses for Pakistani government to provide earmarked sheds and open spaces in Karachi Port Area for transit goods to/from Afghanistan recognize the importance of the Kabul Torkham Peshawar route (suggesting the possibility to extend the railway from Landi Khana to Torkham) appoint liaison officers on both sides ensure the most favourable treatment with each other Although not stated clearly, it is assumed that the mode of transport would be rail. In this context, this agreement has been already outdated at present where road transport is dominant everywhere. In addition, there is reportedly a sister agreement regarding Afghan transit cargo to India. Although the signed document cannot be found anywhere, actual practises follow this agreement; the only possible route is Torkham Wagha, and the transportable goods are limited to dried and fresh fruits from Afghanistan. b) With China, Kyrgyzstan and Kazakhstan Pakistan, China, Kyrgyzstan and Kazakhstan have agreed in 1995 to the following points on land transit trade: Border posts and Land Routes a. Border posts Pakistan :Sust and Karachi seaports. China :Khunjerab, Torugard and Khorgos Kyrgyzstan :Torugard and Ak-Jol Kazakhstan :Kordai and Khorgos b. Land Routes Karachi Seaports (Pakistan) to Peshawar (N-55) or Karachi Seaports to Islamabad/Rawalpindi Dry Port (N-5 or Motorways) to Hassanabdal - Gilgit - Sust (Pakistan) - Khunjerab (China) - Kashgar - Torugart(China) - Torugart (Kyrgyzstan) - Bishkek - Ak-Jol (Kyrgyzstan) - Kordai (Kazakhstan) - Almaty - Khorgos (Kazakhstan) - Khorogos (China), and Vice versa. No vehicle duties and taxes on transit transport except for the cost of rendered services Uniform customs procedures and formalities Providing sheds and open spaces at points of entry/exit in addition to the efforts of infrastructure improvement Equal national treatment in relation to freight and other charges Right to apply all prohibitions and restrictions deriving from national legislation of each country Free transit not only to member countries but also non-member countries Appointment of liaison officers in each country However, the Khunjerab Pass which links Pakistan with China has an altitude of 4,600 m and it often becomes impassable from November to May due to snow and ice. Moreover the both sides of this pass are high steep mountain areas that make road maintenance extremely difficult. Due to these natural conditions, which are hard to overcome, the role of this agreement is quite limited for Pakistan. For other member countries, this agreement seems to be very effective in view of the current surge of goods from China to Central Asian Countries. In addition, prior to this agreement, Pakistan tried to enter an agreement with China in 1993 on the general rules of international road transport. Although this agreement is yet to come 6-42

229 into force, vigorous negotiations are being done at present with the Chinese government. Principles and basic procedures as to permission issuance for regular and non-regular transport services are stipulated there. c) With India There is no agreement between Pakistan and India as to cross-border trade. However, actual trade is being carried out as stated earlier, though at a minimal scale. This has reportedly become possible through ad-hoc communications between the two countries. Regarding railways, however, there is a fairly long history of negotiations on cross-border rail operations. In 1976, both governments finally entered into an agreement to resume railway operations across the border after long discussions. It remained valid until 1991 when a new agreement was reached. It was reviewed again in 2001, but soon after this, on December 31 st, 2001, railway operations were suspended due to political conflict. After two (2) years, in December 2003, a new agreement was reached and rail operations were resumed from the beginning of The following is an outline of the 2003 agreement: to resume international train operations between Lahore and Amritzar in January 2004 to carry international traffic only to limit train running between sunrise and sunset to share the rakes for running passenger services equally by the two railways to limit the weight of passenger luggage below 35 kg per person (50 kg for first class) other detailed procedures relating to rates, fares, document processing, problem solving, penalties, mechanical fitting, etc. According to a report of Gulf News of January 7, 2006, India and Pakistan agreed on January 6, 2006 to reopen a second railroad link on February 1 between Khokrapar, a border town of Sindh province and Munabao, a desert town in western India. The passenger train would be called Thar Express, named after the desert that straddles the border of the region. To begin with, it would be a weekly service and trains will alternate every six months: a Pakistani train will cross into India to Munabao for the first six months of the year, followed by an Indian train for the remaining six months. In addition, the commencement of new regular bus services is now under negotiation between Pakistani and Indian governments. It is expected to become valid soon. d) With Iran There are two (2) agreements between Pakistan and Iran. One is about cross-border railway operation agreed in 1959 and the other is regarding road transport across the border agreed in The outline of the old agreement on railway operation is: The North Western Railway located in Lahore transferred the section it operated inside Iran (Zahedan to Pak-Iran border) to Iranian State Railways. The Iranian Railways in turn transferred the control of the section to the North Western Railway with all immovable assets. The North Western Railway is responsible for train operation on the section including the supply of rolling stock. The schedule of Standard Dimensions relating to the broad gauge shall be used. Mirjawa shall be the only junction for mechanical interchange and joint billing. The Iranian State Railways shall make payment for power for running, coaches, shunting, repair, relief train, etc. For passengers and freight, Iranian portion is collected by the Iranian State Railways at Mirjawa and Pakistani portion by the North Western Railway at Mirjawa as well. The Iranian State Railway will not charge for coals for railway use on the section. 6-43

230 Other procedural matters. The 1987 agreement for cross-border road traffic and transport between the two (2) countries does not include transit movement. Its outline is: Internal transport is prohibited. Each authorized company of either country is allowed to appoint its representative at the final destination in the other country. Drivers need to have an international driving license. The trucks used are exempted from charges and taxes levied on foreign vehicles. The route of transportation is limited to Quetta Taftan 72 Post Mirjawa Zahedan. Other rules on vehicle weight and dimensions, violations, joint commission, etc Policies for Cross Border Facility Development (1) Conditions to Accelerate Cross-border Transport In general, the conditions which determine the magnitude or importance of cross-border transport are: Natural Political/institutional Economical (complementarity and potential growth) Social/cultural Competition with sea and air routes a) Natural Conditions Pakistan generally has severe constraints in natural conditions with the neighbouring countries. The only exception is with India. The border area is well populated, flat and equipped with roads and railways. Moreover, the largest activity centers of both countries are located near the border; Lahore and Delhi. The border area with Afghanistan is mountainous, both for the Torkham route and Chaman route. The bald rocks of the mountains are extremely fragile and the roads and railways are poorly maintained. However, activity centers are located relatively near the border (Kabul/Jalalabad and Peshawar for Torkham route, and Kandahar and Quetta for Chaman route). With Iran, the natural conditions of the border area are not so friendly to cross-border traffic. Several hundred kilometers of desert lies on both sides of the border, and the border is located very far from the activity centers of both countries. China border is the most prohibitive, having the Khunjerab Pass of 4,600m high which practically restricts cross-border movement only to summer. Moreover, the area lying on both sides of the border is steep mountains or hazardous desert for more than 1,000 km. Road maintenance is very difficult due to frequent landslides and falling rocks. Furthermore, there is no alternative potential route over the Pamir Plateau. b) Political Environment The political environment surrounding Pakistan and the surrounding countries is a delicate matter. Pakistan has good political relations with China, partially because of the need to stand together as a counterpoise to India. Although the interrelations with Afghanistan and Iran are stable so far, their attitude on cross-border trade is protectionist in general. The interrelation with India has long been quite hostile and remains so at present despite the recent initiatives taken by both governments. Reflecting the history of political conflict to some extent, the institutional arrangement on cross-border trade is poor if existing, as described in the previous sections. In most cases, the existing agreements impose a number of irrational constraints on cross-border movements. 6-44

231 Some cover only a fragment of entire cross-border transport while some others are outdated. Although the political environment is one of the absolute determinants of quality and quantity of cross-border transport, it is not a matter for planning nor projection. Political decisions have to come first. c) Economical Condition The economical conditions of both countries determine the magnitude of cross-border trade if other conditions are the same. This is related not only to the economic scale but the mutual complementarity of the economies of the related nations. Table compares GDP and trade volume of neighboring countries with Pakistan. Although this is quite indicative, the following can be pointed out: The trade volume between Pakistan and Afghanistan is almost equivalent to 10% of Afghanistan s GDP. Hence cross-border trade is more critical to Afghanistan than to Pakistan. The trade between Pakistan and India is negligible compared to the economic scale of both nations. The trade of Pakistan with China and Iran is still small and identical in relative terms compared to their GDP. In absolute terms, however, China is 10 times larger than Iran or Pakistan. The trade of Pakistan with Central Asian States is still underdeveloped. Considering that Pakistan has an agreement with China and Afghanistan in relation to transit trade, the future possibility of increasing trade between Pakistan and CAS would be large. Table Comparison of GDP and Trade Volume with Pakistan of Neighboring Countries A GDP 2003 (US$ million) B Trade Volume with Pakistan 2003 (US$ million) India 600, ,469 Iran 137, Afghanistan 4, China 1,417,000 1, Kazakhstan 29, Kyrgyzstan 1, Tajikistan 1, Turkmenistan 6, ,240 Uzbekistan 9, ,244 Source) World Development Indicators, WB and Commodity Trade Statisti d) Social/cultural Socially and culturally, Afghanistan is the nearest to Pakistan. Iran and CAS come next because of the common religion. China is quite different in social/cultural features from Pakistan though its Xinjiang Wigur Province has an Islamic tradition. Social/cultural characteristics of India seem to be similar to Pakistan by appearance and by history. However, both people deny this resemblance. e) Competition with Sea and Air Routes Pakistan has sea and air routes between Iran, India and China as an alternative means to land cross-border transport. Particularly for bulky or high-value goods and long-distance passengers, sea and air are much more economical and efficient than land transport. For Afghanistan and CAS, however, land transport can play a vital role. For these landlocked or doubly landlocked countries, cross-border transport is essential except for long-distance A-B 6-45

232 city-to-city passengers and high-value goods. Moreover, land transport of this type contributes to vitalize the life of people living in poor remote border areas. Table Comparison of Cross-border Trade Natural Political Economical Social/ Modal cultural Competitio India *** * *** * ** China * *** ** * * Afghanistan * ** ** *** *** Iran ** ** ** ** * Note) *** favorable ** fair * bad (2) Preceding Examples in Asia The following describes briefly some preceding trials for improving cross-border transport. a) Asian Highway The concept of Asian Highway (AH) was advocated at first in the 1950s by the UN. The purpose was to contribute to accelerate the social and economic developments as well as to boost international and regional trade and tourism by linking Asian countries by road. Due, however, to the lack of fund and geopolitical situation affected by the Cold War, the road development was not smoothly conducted except for some countries. It was the late 1980s when bright signs were observed. As a result of the dissolution of the Cold War and the introduction of market mechanisms in socialist countries, globalization has become highlighted and infrastructure of international communication and transportation became important tools for promoting trade and attracting foreign direct investment. This tailwind has revitalized the Asian Highway. Particularly when China, Mongolia and Myanmar became members of AH in , the region restarted the efforts to realize the Asian Highway Network. Led by ESCAP, the AH now has 32 member countries from Japan on the east end to Turkey on the west end. Pakistan has long been a member country since its foundation in Donors have been vigorously supporting the development of AH roads inside Pakistan. The AH network is now composed of numerous roads amounting to about 141,000 km. b) The GMS Cross-Border Transport Agreement The GMS Cross-Border Transport Agreement (GMS Agreement) initially advocated by the Asian Development Bank is a multilateral instrument to facilitate cross-border transport. The GMS Agreement includes references to existing international conventions that have demonstrated their usefulness in a number of countries. Similar initiatives are also undertaken by ASEAN. The GMS Agreement covers all the relevant aspects of cross-border transport facilitation. These include: a. single-stop/single-window customs inspection b. cross-border movement of persons (i.e., visas for persons engaged in transport operations) c. transit traffic regimes, including exemptions from physical customs inspection, bond deposit, escort, and phytosanitary and veterinary inspection d. requirements that road vehicles will have to meet to be eligible for cross-border traffic e. exchange of commercial traffic rights f. infrastructure, including road and bridge design standards, road signs and signals The GMS Agreement will apply to selected and mutually agreed upon routes and points of entry and exits in the signatory countries (Cambodia, China, Lao, Myanmar, Thailand and 6-46

233 Vietnam). Although some countries seem to be reluctant to proceed, bilateral talks are still continuing. c) Central Asian Republics Economic Cooperation (CAREC) The CAREC initiative, supported by ADB, intends to enhance economic cooperation among Kazakhstan, Kyrgyzstan, Uzbekistan, Mongolia and the Xinjian Uygur Autonomous Region of China. In its phase I program , infrastructure needs and policy issues that impede cross-border trade were identified, and in the phase II (1999-present), several projects selected in the previous phase have been assessed for implementation focusing mainly on trade, road railway and electric power. However, most countries of this region have trade-restrictive policies due to their similarity of economic structure, and the deteriorated infrastructure and political instability in some countries further adds difficulties in promoting cross-border trade. As a result, the share of intraregional trade in total trade has decreased during the period 1998 to 2003; 3.4 to 1.8% for Kazakhstan, 24.8 to 16.6% for Kyrgyzstan and 32.6 to 22.4% for Tajikistan. Obstacles for cross-border trade are numerous. In addition to high customs tax and import quotas imposed by Kazakhstan, China, etc., there are transit fees, high loading/unloading cost and corrupt border practises. Hence, the CAREC initiative has not been so successful so far. However, the volume of cross-border trade has been rapidly increasing in these years between China and CAS countries particularly Kazakhstan, and cross-border infrastructure is being improved as well. Moreover, CAREC countries have taken steps to simplify the procedures of cross border transport. A transit agreement was signed in March 2004 between Kyrgyzstan and Kazakhstan, and a similar agreement is being negotiated between Tajikistan and Kyrgyzstan Recommendations Since it is impossible to have a clear perspective for the future on the political environment surrounding cross-border transport of Pakistan, it would be more realistic for the Pakistan government to concentrate on the interrelation between: - Afghanistan and Central Asian States in the short term, and - India in the medium to long term. The outdated and prohibitive agreements with neighbouring countries regarding cross-border trade and transit trade should be amended and updated. With Afghanistan, the 1958 and 1965 agreements on transit traffic should be amended to cover both road and rail, and both bilateral and transit traffic. The fees, taxes and procedures needed on the border should be clearly and transparently stipulated so that arbitrary judgement of customs officers can be avoided. In addition, the border offices of both Pakistan and Afghanistan should be linked directly by data communication to avoid duplication of document processing and declaration of different figures (weight, value, etc) at both sides. With India, the same arrangement should be taken as well in principle. However considering the hostility seen at present even between the labourers of both sides, at least back-to-back loading/unloading of trucks should be allowed immediately to avoid ridiculous inefficiency. At present, the time required for goods transportation by truck is reportedly 25 days from Karachi Port to Jalalabad in Afghanistan. Out of these 25 days, only 1-2 days are consumed in the Torkham Pak-Afghan border. This means that cross-border transport cannot be enhanced solely by improving the cross-border facility. Strengthening of port functions and road/rail development/improvement must be pursued in combination with the proposed enhancement of cross-border facilities. 6-47

234 Figure illustrates the existing international corridors and the future new international corridors. Recently, the government of Pakistan launched National Trade Corridor Improvement Program (NTCIP), which intends to strengthen the existing international corridor for transport of import and export goods. The development of multi-modal facilities should be incorporated in the program. Existing Cross-border Trade Facilities Existing International Corridor The Future New International Corridor Sust China Afghanistan Qilli Ghulam Khan Torkham Chaman Wagha Taftan Iran India Muna Boa Gwadar Barmer Source: JICA Study Team Karachi/ Qasim Figure Proposed Corridor Development of Cross Border Route 6-48

235 6.6 Institutional Capacity Enhancement Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) Institutional Capacity of Road Administration Mismanagement of investments has led to inadequate road rehabilitation and maintenance, resulting in rapidly deteriorating roads and a large and ever increasing maintenance backlog. There is also an urgent need to develop management and professional skills in the institutions that are tasked with managing the road network. The need for institutional strengthening and well designed road sector development plans are particularly apparent at the provincial level, where the greater portion of the network exists. Institutional deficiencies of the national and provincial road administrations are not unique from other sub-sectors: i.e. over-staffing, low salary structure, lack of management and operational improvements, absence of research and development, and highly centralized decision-making. What is unique is the NHA s role; it has a dual function as both financier as well as executor. This may have contributed to problem of poorly justified investments, maintenance neglect and the selection of projects without confirming the scope of the work to the need, checking cost inflation, insuring quality control, doing research and development to protect investments. Governments, in the past, provided infrastructure, operated transport and regulated the system. These are conflicting roles to being financier, executor, auditor, and regulator at the same time. There is a need to re-organize NHA so that it becomes only a financing and regulatory agency and the project execution functions can be transferred to the provincial departments of Communications and Works. NHA will be able to exercise strict financial and quality control checks. (1) NHA s Mismanagement of Investments The NHA project portfolio (Rs. 276 billion) is a product of unplanned and uncoordinated investments in the transport sector during the early 1990s. The centralized project review and approval mechanisms CDWP and ECNEC which are supposed to provide institutional checks and balance and determine inter-sectoral priorities, were compromised and totally bypassed by the powerful National Highway Council (NHC) headed by the Prime Minister to enable rapid approval of politically high profile projects. In addition to dualization and rehabilitation of existing national highways, the NHA s ambitious highway expansion program included a grandiose motorways construction program. New projects were poorly justified and prioritized with a bias towards capital construction over asset conservation. A proliferation of new projects without completing ongoing projects and ineffective management of project implementation has resulted in very limited economic benefits from the investments, significant deterioration in traffic conditions along some heavily travelled national highway sections, delays in completion and the subsequent increase in construction costs. (2) Governance Improvement Amendment to the NHA Act 1991 has restored the centralized review and approval of all NHA s projects by the CDWP/ECNEC. The 2001 amendment removed the Board s power to approve projects of more than Rs.60 million and for projects over Rs.100 million the NHA Executive Board is required to submit PC-I to CDWP and ECNEC for review and approval like other implementing agencies. During the past five years NHA management has been strengthened, streamlined and right sized. Overall agency staffing has been reduced from 1900 to Standard Operating Procedures have been developed and a system of enhanced staff accountability and merit based promotions has been introduced. In addition, NHA has recruited a chartered accountant and other financial management professionals from the market to strengthen its financial management capacity. 6-49

236 (3) Implementation Capacity At present, NHA management has three-tiers: Policy, Management and execution. Policy is set by the Chairman, Board members and NHA s Diector General (Administration). Management is carried out by Board members, NHA s General Managers and Directors. Execution of physical tasks is carried out by NHA s General Managers, Directors, Deputy Directors and Assistant Directors. NHA is in charge of enforcement on only 9,000 of the total road network of 258,000 km in the country. This represents about 3% of the entire road network yet the traffic on the motorways and national highways is 75% of the commercial road traffic in the country. (4) Maintenance Management a) Control and Enforcement of Overloading Overloading of trucks has caused extensive damage to the highway network. Overloading control and enforcement efforts over the past two decades have been very limited and largely ineffective. Overloading, coupled with high summer time temperatures have proven the inapplicability of the commonly accepted international standards of pavement designs. b) Maintenance Backlog A persistent bias in favour of capital construction, together with the modal shift from rail to road and significant increase in vehicle axel loads has caused a rapid and premature deterioration of the road network. The national highway network has developed a huge maintenance backlog now requiring Rs. 30 billion per annum to restore it to acceptable conditions. c) Financing of Development Program NHA s development programme is approved annually by the central government. Financing is currently provided by the Government in the form of Cash Development Loans (CDLs). The government allowed NHA to borrow Rs.140 billion in the form of the CDLs at an interest rate of 13%, resulting in the outstanding Rs.23 billion Foreign re-lent loans, US$58 million of foreign direct loans from Turkish Exim Bank for the construction of the M-1 Motorway and US$667 million from a Korean contractor (Daewoo) for the M-2 Motorway by government guarantees (payment of US$188 million has been made so far but a balance of US$793 million still remains) and US$200 million from the World Bank s National Highway Improvement program (NHIP) loan. According to a recently published report, at the end of this financial year, NHA will be in arrears of loan payments by Rs.100 billion. (Refer to the Final Report Available Options for Sustainable Financing of NHA s Programme, January 2005 prepared by Dr. Ronald R. Alan, Consultant) d) Financing of Maintenance Cost Maintenance of the national highway network is funded annually by grants from the federal government separately from PSDP. The fund, however, is insufficient to cover the needs of maintenance of national highways. In order to supplement the fund for maintenance NHA has been taking various measures including increasing revenues by toll rate escalation. At the same time, NHA has been requesting funds from external assistance that focuses on the reconstruction and improvements of national highways, i.e. National Highway Improvement Program (NHIP) by the World Bank. 6-50

237 6.6.2 Institutional Reform of Road Administration (1) Maintenance Management Current situation where the maintenance backlog has become an alarming proportion and according to the results of the RAMD Study on pavement conditions by NHA, the condition of 47% of the national highway network, which caters to more than 70% of the total inland traffic, is classified as poor. (The level of deteriorations on provincial roads is less critical in comparison with those on the national highway network). At the rate of deterioration of the network, road administration needs to focus on the network maintenance management and devote a substantial portion of its financial and human resources to capital development. The maintenance management programme needs to be supported by accelerated research and development efforts and tighten the quality and cost control though the enforcement of new design standards and material specifications which will be developed by new research and development efforts on an urgent basis. (2) Research and Development Problems of pavement deterioration can be slowed down through pavement thickness design and material specifications for the local environment and traffic conditions. NTRC, the research wing of MOC, launched a comprehensive research program of test sections covering flexible and semi-rigid pavement for evolution of pavement thickness design procedures specifically for Pakistan. NHA, faced with the problems of pavement deteriorations has not utilized the existing research centre. Instead, it has accepted the technical and financial assistance to create two separate research centres under the NHA, one by the World Bank and the other by JICA. The World Bank s research centre will be a part of NHIP. Meanwhile, the existing National Transport Research Centre (NTRC) has within the premises a pavement testing facility and qualified professionals specializing in pavement design and materials. To avoid duplication and wasting the financial and human resources, the existing and proposed R&D facilities need to be combined into a single research and training centre. The facilities and professionals of the NTRC Road Research Section need to be transferred to the new centre as the first step of the consolidation. (3) Private Sector Participation in National Highways and Motorways With so many projects competing for PSDP allocation of additional financial resources, and to achieve the objectives defined by economic policy, there is no choice but to pursue a BOT approach in full knowledge of the cost inflation. NHA has been the main recipient of public sector funding and external assistance, bilateral and multilateral. Under these circumstances, it might be questioned whether it is worthwhile for NHA to invite the private sector to join in the financing of multi-million dollar motorway constriction in the hope that by doing so these already matured projects may be implemented sooner than if they were to wait for public funding opportunities. The key element that should always be evaluated carefully, in this respect, is the estimated time period by which the projects would probably have to be delayed until such an opportunity arose. On that basis, for the time period under consideration the socio-economic benefits at stake, i.e. which would be lost if the project was not implemented at an optimal date, could be calculated. The period starts in the year when traditionally used parameters characterizing project efficiency such as net present value (NPV) or internal rate of return (IRR) exceed previously approved and generally acknowledged threshold values which characterize mature projects. That amount is the socio-economic benefit in jeopardy and should be compared to the cost increase caused by private sector involvement in financing the project. If, and when, the ratio of the benefits in jeopardy and the cost increase is above 1.0 or exceeds a previously identified and approved limit, say 1.5, then, the selection of the project is justified. 6-51

238 6.6.3 Railway Administration (1) Institutional Reform for the Pakistan Railways PR was organized as a subordinate department of the Ministry of Railways and this form of organization proved increasingly ineffective in coping with competition, as PR s pre-eminent position was increasingly challenged in the post deregulation era. In 1995, the JICA Study on National Transport Plan in the Islamic Republic of Pakistan recommended the creation of a Pakistan Railway Corporation, similar to PIA, with Ministerial representation on the board. The ownership and overall direction of the railway would remain in the public sector, but day-to-day running of the railway would be passed on to commercially oriented managers with clearly defined targets and responsibilities. The study concluded that, ultimately, given the hope for gain in railway productivity and profitability, such a structure would be suitable for the privatization of the railways, if that was politically desirable. In 1997, GOP announced its strategy for the privatization of Pakistan Railways. The strategy is to restructure PR into three core businesses-passenger, Freight and Infrastructure. A new public entity-railway Resettlement Agency will be created to retain all surplus assets and liabilities, including labour, real estate, debts and environmental clean up obligations. In addition, a new Railway Regulatory Authority will be established under a new regulatory framework to regulate the largely private sector rail industry. This plan failed and impacted negatively on the morale of the PR employees. In 2004, after 10 years of JICA recommendation and unsuccessful attempts at privatizing PR in 1997, GOP decided to create the Pakistan Railways Corporation. The objectives and reasons were: To promote railway as the preferred mode of transport in the country; To grant Pakistan Railways Corporation sufficient autonomy to operate and to enable it to compete against other modes of transport effectively; To allow the Corporation to procure finances directly from banks/market on suitable terms. The new Board consists of a Chairman, a CEO, and nine directors: three from the GOP, three from the Corporation and three from the private sector. The CEO will be recruited from the private sector. The GOP provides the Board with more autonomy and power over its governance. (2) Management Reorganization The institutional reform calls for: Shifting from the strong social service aspects of the management structure to a commercially oriented railway, Increasing performance by creating lines of business management which enhance management responsibilities and accountabilities and enable profit centre accounting, Curtailment of surplus employees is among the top priorities Create a sustainable financing structure Financial structure of PR has been ad hoc and unsustainable with no value-for-money testing, or monitoring to underpin budgetary support. During the 1990s no investments were made in the railway infrastructure except the procurement of locomotives. In the absence of clear long-term plans or short-term goals and the Shock Treatment of 1998, the railway has failed to achieve sufficient PSDP allocation to cover maintenance of the rolling stock and rail structure. As a result, the infrastructure and rolling stock are obsolete and require a substantial amount of investment to function as one of the key transport systems of the country. Reform of Pakistan Railways is discussed in the Chapter

239 6.7 Environmental Consideration EIA Regulations In 1997, the National Assembly passed the 1997 Pakistan EP Act, which subsumed the 1983 ordinance. This act requires IEEs and EIAs for all developmental projects. Environmental impact assessment of all development projects whether public or private is a legal requirement under section 12 of PEPA 1997, which became operational in Project categories, which require an IEE, are listed in Schedule 1 (See Table 6.7.1) and the projects for which an EIA is required are in Schedule 2. The Pakistan EPA Review of IEE and EIA Regulations, 2000 (The 2000 Regulations) prepared under PEPA 1997 define the procedures for IEEs and EIAs, and give legal status to the Pakistan Environmental Assessment Procedures, prepared by the Federal EPA in The number of EIA reports submitted to EPAs has increased from 6 in 2000 to 29 in 2004 and the number of IEE s from 31 in 2000 to 189 in Mandatory list for EIA or IEE regarding the transport sector is as follows. Table Mandatory List for EIA / IEE List of Projects Requiring an EIA (Schedule 2) List of Projects Requiring an IEE (Schedule 1) Mining & Mineral Processing Mining & Mineral Processing Major mineral development including; Commercial extraction of sand, gravel, mining & processing of coal, gold, copper, iron, and precious stones Major smelting plants Major non-ferrous metals, iron and steel limestone, clay and other minerals not included in Schedule A. Crushing, grinding and separating processes Minor smelting Plants rolling Transport Major Ports and Harbors development Major Airports Federal or Provincial Highways or major roads greater than 5 crore rupees in value. Maintenance (rebuilding or reconstruction of existing roads is excepted from the requirement of an EIA). Major railway works Environmentally Sensitive Areas Any project which will be situated in an environmentally sensitive or critical area should be carefully investigated, and the results communicate to the Responsible Authority, who will advise whether an EIA is necessary (see Guidelines for sensitive and critical areas ). Any other projects that the EPA may require Transport Ports and Harbors Development for ships less than 500 gross tons Federal or Provincial Highways (except maintenance, rebuilding or reconstruction of existing metalled roads) less than 5 crore rupees in value. Any other projects that the EPA may require EIA Procedure No proponent of a project can proceed unless it has filed an Initial Environmental Examination (IEE) with the Federal Agency and received approval. No proponent of a project which is likely to cause adverse environmental effects can proceed unless an EIA has been approved by the Federal Agency. After filing the IEE, the Federal Agency must respond within 10 working days and state if the submission is acceptable or not, or if an EIA is required. If acceptable, the agency is required to review the IEE and approve it within 45 days. If an EIA is required, the Agency 6-53

240 must review the EIA and give approval subject to conditions, within 90 days, require that the EIA be re-submitted after any stipulated modifications, or reject the project. Every review of an EIA must be carried out with public participation but no commercially confidential information will be disclosed during the public participation unless such disclosure is in the public interest. The Federal Agency must communicate its approval or otherwise within four months from the date the IEE or EIA is first filed. If the submission is complete and complies with procedure, but no response is given, then the IEE or EIA shall be deemed approved. The Federal Government can, at its discretion, extend the four month period if justified by the nature of the project. The Federal Agency must maintain separate registers for IEE and EIA projects, which contain brief particulars of each project and a summary of decisions taken. These registers are to be open to the public Environmental Management Plan The project proponents will be responsible for ensuring implementation of the environmental mitigation measures recommended in the IEE or EIA. An Environmental Management Plan (EMP) should be prepared during the EIA/planning phase and should include specific mitigation measures, environmental monitoring requirements, institutional arrangements and budget. The EMP is a crucial document and should be prepared during the IEE/EIA. It must be approved by the EPA and included in the contractual obligations imposed on the contractor. Implementation of the EMP during construction is the responsibility of the contractor. The contractor is responsible for environmental monitoring and reporting. The project proponent must ensure that the performance of the contractor is in accordance with EMP. The contractor should submit a report on EMP implementation annually JICA and Pakistan EPA Guidelines A comparison has been made between JICA guidelines and the requirements of the Pak-EPA. There are no significant differences. JICA does include Strategic Environmental Assessment (SEA), which the Pak-EPA does not; however, MOE would like to see this included at a policy level. Resettlement is included in both guidelines, however MOE admit they do not have capacity to assess such issues. At technical levels there are no essential differences. A comparison is given below in Table

241 Table Comparisons of Requirements of JICA and Pak-EPA Environmental Guidelines Scope of Impacts to be Assessed in Environmental Assessment JICA Pak - EPA Direct and immediate impacts of projects Site selection Derivative, secondary and cumulative impacts Indirect impacts on natural resources Environmental impacts of a trans-boundary or global scale e.g. global warming Project Related Impacts Impacts on natural environment: Impacts on natural environment: Air Air quality Water, water usage Water quality, water supply, storm water management, ground water, flooding Soils, ground subsidence, sedimentation, geographical features Soil stability, soil erosion, sedimentation Waste Safe storage of materials on construction site Accidents Construction hazards, traffic accidents, disaster response plan Ecosystems, biota Flora and fauna (biota), destruction of habitats (ecosystems), loss of species Noise & vibration Noise & vibration Social considerations Social considerations: Migration of people, social institutions & infrastructure local decision-making institutions; existing social infrastructures and services Involuntary resettlement Local economy, employment and livelihood distribution of benefits and losses and equality in the development process Land use and utilization of local resources Cultural heritage Infectious diseases such as HIV/AIDS. Local conflict of interests, vulnerable social groups: poor, indigenous peoples, gender, children s rights Displacement of existing uses, breakdown of community cohesion; provide replacement community facilities Adequate resettlement and compensation to allow viable lifestyle to continue. Economic issues, loss of livelihood Landscape, visual amenity, induced land change Cultural heritage Health, spread of disease Current EIA Issues (1) Key Issues An overview of the key environmental issues facing Pakistan is presented below: The amount of available water in Pakistan has been decreasing at an alarming rate and is approaching the water scarcity level of 1,000m 3 per capita. Fresh water resources are polluted from discharge of untreated industrial and municipal wastes. Rivers are allegedly polluted by discarded waste from road construction and soil run off during heavy rain. Air pollution is increasing, especially in urban areas. Pakistan EPA surveys detected levels of suspended particulate matter six times higher than WHO guidelines. Smog seriously affects almost the entire province of Punjab during December and January every year. Noise pollution has become a serious issue in major urban centres. Degradation and encroachment into natural forests, rangelands, freshwater and marine ecosystems are destroying habitats leading to loss of biodiversity. At least four mammal species, including tiger, swamp deer, lion and rhinoceros, are known to have become extinct from Pakistan, while at least 10 ecosystems of particular value for species richness and uniqueness of their floral and fauna are critically threatened. Deforestation loss is 6-55

242 occurring at a rate of % per annum. New roads opening up such protected areas are thought to worsen this situation. Pakistan is an energy inefficient country. It uses approximately the same energy to generate $1 of GNP as the USA. The above situation has arisen due to a number of factors including high population growth rate, prevailing poverty, unplanned urban and industrial expansion, insufficient emphasis on environmental protection in the government policies, lack of public awareness and education and lack of institutional capacity and resources for effective environmental management. (Reference Draft National Environmental Policy , Ministry Of Environment, Government of Pakistan, March 2005) (2) Guiding Principles The following guiding principles have been adopted to address these environmental concerns: Principle of sustainable development. Principle of equitable access to environmental resources. Creation of demand for a better environment. Respect and care for the environment. Integration of environment into planning and implementation of policies, programs and projects. Changing personal attitudes and behaviors. Precautionary principle. Polluter pays principle. Substitution principle. Improving the efficiency of usage of environmental resources. Decentralization and empowerment. Extensive participation of communities, stakeholders and the public. Accountability and transparency. Increased coordination and cooperation among federal and provincial governments, NGOs, private sector and academia. Increased regional and international cooperation. (3) Benchmarks and Targets The current environmental benchmarks and future targets are; Increase renewable energy production (wind, solar, bio-gas etc.) Increase forest cover from the current level of 4.8% to 5.7% in 2010 and 6% in Increase land area protected for the conservation of wildlife from current level of 11.3% to 11.5% in 2010 and 12% in Finalize standards for ambient air quality and noise by Increase the number of petrol and diesel vehicles using CNG fuel from 280,000 currently to 800,000. Reduce, by 2010, the percentage of sulphur in high speed diesel fuel oil from 1% to 0.5%. Establish 40 ambient air quality and 25 water quality monitoring stations by Phase out two-stroke rickshaws by replacing them with four-stroke rickshaws or alternative modes of transport. (4) Institutional Issues The requirements for protection of the environment during construction of any major transportation projects are well defined in law and the legal procedures are laid down in regulations. These regulations give details of the procedures to be followed in the preparation 6-56

243 of an IEE or EIA, the timing of the preparation, the authorities to be consulted, the responsibilities of all parties involved, and the follow up procedure necessary to ensure that agreed remedial measures are implemented correctly. The Project Proponents such as NHA or the Provincial Highway Authorities do not have the capability to produce such documents. They need to hire a consultant to do this but even so, it would be better if each project proponent had an environmental officer of environmental cell embedded in its organization to supervise consultants. Even when the IEEs/EIAs are prepared the Provincial EPAs or the Federal EPA and Ministry of Environment do not have the capability to review the documents adequately or dispute statements made. The IEEs/EIAs should contain an EMP (Environmental Management Plan) which is to be implemented by the contractor. However, often contractors complain that they were not involved in the preparation of the EMP so regard its implementation as impractical. This is an invalid argument as the implementation of the EMP is required in the contract, and by agreeing to the contract, the contractor accepts responsibility for implementing the EMP. The implementation of the EMP should be enforced by the EPA but the project proponent is responsible for checking that the contractor is following the EMP requirements. The contractor should submit regular reports to the project proponent who should forward these to the EPA. In the event of non compliance, the project proponent should discipline the contractor by regulating payment. Enforcement of the conditions stipulated in the IEE/EIA is difficult and often contractors do not follow the EMP requirements. The improvement to Murree Road has been given as an example where contractors were dumping left over spoil material in the river and increasing sediment levels. On a more general level, the Federal Ministry of Environment would like to be more involved in decision-making at a strategic level as it feels decisions on projects have already been made before it is consulted. 6-57

244 Chapter 7. ROAD PLAN 7.1 Planning Approach Introduction As stated in Chapter 5, one of the main policies of the Master Plan is to develop a transport system to support people s economic and social activities so as to decrease regional disparities and realize the optimal modal share between road and railway. Among others, economic growth is given the top priority under the current national development plan and transportation has to shoulder an important role to attain high economic growth Planning Process (1) Demand Supply Analysis Table illustrates the flow of the planning process for the road network in PTPS. Present Network Ongoing& Committed Projects Basic Network Future Demand Demand Supply Analysis Scenario Analysis Desired Route Corridor Analysis Detour Rate Analysis Connectivity Analysis Future Network Project Evaluation and Prioritization Figure Procedure for Road Network Planning The first step of the planning is to determine a basic road network that can be regarded as the minimum investment case and the basic scenario for demand and supply analyses. The road network in the near future, after all the on-going and committed projects are completed, was regarded as the basic network. In addition to the basic network, MTDF Network was prepared to analyze a likely scenario that assumes all MTDF projects be completed but no other projects be done. Since MTDF is a government plan and has already been approved, MTDF Network should be the starting point for the road plan. Based on these road networks, the following analyses were carried out. Scenario Analysis, Corridor Analysis, 7-1

245 Desired Route Analysis, Detour Rate Analysis, Connectivity Analysis Scenario Analysis This analysis includes several scenarios. Do-Minimum Scenario shows what will happen if no project is implemented other than the on-going and committed projects. Similarly, MTDF Scenario shows the future situation with MTDF Network. Corridor Analysis This analysis compares traffic demand and capacity of transport corridors. If traffic demand exceeds the capacity along a corridor, capacity expansion of the corridor can be identified as an important transport issue. Based on the corridor analysis, future requirements of additional capacity of highway corridors are identified and proper measures such as widening of existing roads and new road construction are selected for each corridor. By doing this, new road projects are planned. Desired Route Analysis This analysis clarifies the desirable routes that road users prefer, on the assumption that all roads have unlimited capacity and therefore no congestion occurs. Detour Rate Analysis This analysis picks up pairs of two large cities between which the shortest route is very far compared to the distance in a straight line. It is economically desirable that large cities are mutually connected with a short route. For a pair of two large cities with a high detour rate, a possibility of a short cut route should be looked for. Connectivity Analysis This analysis identifies necessary alternative routes between large cities. Highways should be continuous along a corridor, so connectivity is one of factors to examine in a road network. In addition, the highway network should be stable, ensuring against a disaster or an accident. Every pair of two large cities should be connected with plural routes in order to provide a vehicle with an alternative route on any occasion. (2) Road Network Formulation The master plan road network was proposed based on the result of the demand - supply analysis. In formulating the road network, various factors such as regional development and natural resource exploitation were considered. Necessary projects for the master plan network were identified. (3) Project Evaluation and Prioritization The identified projects were evaluated economically (and financially if necessary), in order to determine their priority Ongoing and Committed Projects In order to make the base network, on-going and committed projects were identified. Currently there are a number of road projects being carried out. In addition, there are new projects that have already been committed by authorized agencies and will start soon. Figure shows the locations of these projects by donor agencies, and project sections are described in Table

246 Table Pakistan Transport Plan Study in the Islamic Republic of Pakistan (PTPS) List of Ongoing and Committed Projects No. Project Name No. Project Name Ongoing Projects 250 Bridge over River Chenab at Shershah 10 Makran Coastal Road (Balochistan) 260 Interchange at Khangah Dogran on M-2 20 Islamabad Pashawar Motorway (M-1) 270 Interchange at Sial More on M-2 30 Pindi- Bhattan Motorway (M-3) 280 Lala Musa Gulyana Thotha Rai Bahadur Road 40 Karachi Northern Bypass 290 Nowshera Chakdara, Dir-Chitral N Lyari Expressway 470 N-5 Rehabilitation Project 60 Islamabad-Muzaffarabad Road 540 Kalat Quetta Chaman Section (N-25) 72 Indus Highway Project (Phase-III) 551 Peshawar-Torkhan Dual Carriageway 80 Mansehra Naran Jalkhad Road 552 Malana Junction-Sarai Gambia Dualization 100 Rahim Yarkharn Bahalwalpur (N-5) 553 Badabher Dara Adam Khel 110 Okara Bypass 554 Sarai Gambia-Bannu-Miran Shah-Ghulam Road 120 Karian Rawalpindi (N-5) 650 Kohat Tunnel Access Road, JBIC 130 Chablat Nowshera (N-5) 670 Karao-Wad Section, JICA 140 Lowari Tunnel & Access Road Committed Projects 150 Bridge on River Jhelum at Azad Pattan AJK 480 Rehabilitation of 518km of N-5, WB 160 Improvement of N-65 Dera Allah Yar Nutal Section 530 Gujranwala-Hafizabad-Pindi Battian, WB 170 Improvement of N-65 Nutal-Sibi-Dhadar Section 561 Hub Uthal Section N25, ADB 180 Improvement of KKH (N-35), NWFP 562 Multan Muzaffargarh, ADB 190 D.I.Khan Mugharl Kot Section (N-50) 563 Khanozai-Mughalkot N50, ADB 200 Improvement of N-70 Qila Saifullar Loralai Bewata 564 Hassanabdal-Abbotabad-Mansera, ADB 210 Ratodero-Shahdakot-Khuzdar Section (M-8) 565 Sukkur-Jaccobabad, ADB 220 Gwadar Khuzdar Road (M-8) 566 Tarnol-Fatejangh-Jand, ADB 230 Khori-Quba Seed Khan Section 567 Qila Saifullah Loralai Wiagum Rud, ADB 240 Realignment of N65 near Jaccobabad 570 Malakand Tunnel/Bypass, ADB!( PSDP PSDP ADB !( JBIC/JICA WB !( 120!( !( Figure Location of Ongoing/Committed Projects 7-3

247 7.2 Demand- Supply Analysis Growth in Travel Demand Forecast growth in travel demand to 2025 is expected to be more than 3-fold. Growth rate is expected to be higher in the 1st decade than in the following 10 years, and the demand for both freight and personal travel by road is expected to double over the next ten years. Table Growth of Transport Demand (Interzonal Transport) Year Passenger or ton (mill/year) Pax-km or ton-km (bill/year) Passenger 780 1,455 2, Freight Note: Projection by JICA Study Team On the other hand, on-going and committed projects will not be enough to increase the road network capacity to such a degree to meet with future demand. Figure illustrates the road network after the on-going and committed projects are completed with information of the number of lanes. It is noticeable that after a number of on-going and committed projects, the network will not be greatly expanded from the existing network, and most of roads will still be 1-lane or 2-lane. No. of Lanes/Dir Figure Road Network after current projects 7-4

248 7.2.2 Scenario Analysis Traffic assignment was carried out to calculate traffic volume on roads for the following scenarios: Do-Minimum Scenario: Only on-going and committed projects are carried out. MTDF Scenario: Only and all MTDF projects are carried out. Modal Shift Scenario: All the necessary projects for the target modal share are carried out as well as all MTDF projects. The results are shown in Figure 7.2.2, Figure 7.2.3, and Figure The daily traffic volume is expressed as the width of each link and volume to capacity ratio is expressed as grey colours of four categories. Although daily capacity does not necessarily mean the ultimate capacity of a road in a day, there are some important findings as: Ongoing and committed projects can provide necessary capacity to some extents in 2010 as shown in Figure [1]. Other projects are required in addition to these projects to improve service level at some points. MTDF projects provide sufficient capacity in 2010 as shown in Figure [2]. and it will be able to provide necessary capacity to some extents up to 2015 as shown in Figure [1]. However, MTDF will not be able to provide minimum service in 2025 as shown in Figure [2]. If the target modal share is achieved, the road network by MTDF is sufficient up to 2015 as shown in Figure [1], but the level of service will be still low in 2025 as shown in Figure Do-Minimum Scenario, 2010 MTDF Scenario, 2010 Volume Capacity Ratio Volume Capacity Ratio Source: JICA Study Team [1] Figure Traffic Assignment for Do-Minimum and MTDF Scenario (2010) [2] 7-5

249 MTDF Scenario, 2015 MTDF Scenario, 2025 Volume Capacity Ratio Volume Capacity Ratio Source: JICA Study Team [1] Figure Traffic Assignment for MTDF Scenario (2015, 2025) [2] Modal Shift Scenario, 2015 Modal Shift Scenario, 2025 Volume Capacity Ratio Volume Capacity Ratio Source: JICA Study Team [1] Figure Traffic Assignment for Modal Shift Scenario [2] 7-6

250 7.2.3 Desired Route Analysis Figure compares the two results of traffic assignments of 2025 demand for capacity constrained case and capacity unconstrained case. The network constrained case shows a considerable diversion from congested highways to others whose distance is relatively longer then the shortest paths. If capacity is unlimited, road users choose the shortest paths. Whereas, the unconstrained case shows that traffic volume along shorter routes is not necessarily significant. This implies that the average trip length on the network is relatively short and opportunities to divert on to shorter routes are limited. Other results can be drawn from this analysis as follows: N-5 will have been the most important corridor for road users those who prefer the shortest routs between their origin and destination. High travel demand is expected for two direct routes, Karachi Dadu (M-7) and Hyderabad Sukkur (a provincial road along Nara Canal in Sindh). There will have been few road users who regard M-2 as the shortest route between Rawalpindi and Pindi Bhattian, assuming other roads have unconstrained capacity Demand on present Network With Capacity Constraint 2025 Demand on present Network with Capacity Unconstraint / pcu / pcu Figure Assigned Traffic of 2025 Demand on Current Network 7-7

251 7.2.4 Corridor Analysis Figure depicts the travel demand for 2005, 2015 and 2025 by three histogram bars, and the cross line defines the current capacity along each corridor. The analysis across 10 major corridors in Pakistan illustrates that: All corridors west of the Indus have sufficient capacity to 2015, but four corridors out of five would need additional capacity to meet the projected 2025 demand. The scenario to the east of the Indus reflects that the current network capacity would only be sufficient for the next five years or so. Beyond that additional capacity is essential, and on three out of four corridors the additional capacity requirement is more than double the current capacity. pcu/day Present 30,000 Capacity 2005 year Figure Demand and Supply Gap on Screen Lines 7-8

252 7.2.5 Detour Rate Analysis Detour rates were calculated among the 12 largest cities. City pairs with higher detour rate are shown in Figure The cities having good connection with other cities are Lahore, Islamabad, Sialkot and Gujranwala. On the other hand, Peshawar and Quetta are connected to other major cities at a long distance (high detour rate). Road network should be improved to lessen those higher rates. Table Distance and Detour Rate among Major Cities Population Karachi 9,339-1, , ,072 1, , Lahore 5, Faisalabad 2, Islamabad 1, , Multan 1, Hyderabad 1, , Gjranwala 1, Peshawar Quetta Sargodha Sialkot Bahawalpur Note: Detour rate is defined as the ratio of road distance between two cities to the distance of a straight line directly connected the two cities. Cities Detour Rate Distance between two cities measured in straight line (km) Peshaw ar Islamabad Sargodha Sialkot Gujranw ala Lahore Faisalabad Quetta Multan Bahaw alpur Karachi Hyderabad Detour Rate Figure Geographical Distribution of High Detour Rates 7-9

253 7.2.6 Implications of the Analyses on Road Planning The implications of the analysis on the road planning are summarized as follows. M-7 and a new road between Hyderabad and Sukkur along Nara Canal can be nominated as new shortcut road of N-5. Road capacity of N-5 and N-55 in Sindh Province should be expanded as early as possible. Construction of new roads or dualization of N-55 can be considered. Road capacity of N-5 and M-2 between Rawalpindi and Lahore should also be expanded. Access control of N-5 and traffic control in urban area are important because construction of new roads may be difficult along this corridor. New bridges are necessary for the River Indus, Jhelum, Chenab, Ravi and Sutlej. River crossing demand is very high in Punjab Province. M-4 will significantly reduce the detour rate between Multan and Faisalabad, and can be given high priority. 7-10

254 7.3 Development Plan Pakistan Motorway Network Currently, 10 motorways (M1 M10) of 2,667 km are planned or already operated. In addition to these, 9 more motorways (M11 M19) with total extension of 2,140 km were identified and proposed by the PTPS. Table and Figure detail the current, committed, and indicative motorway network of Pakistan, as modeled by PTPS. The network development has two salient features: 1) It diversifies the demand away from the current single N/S corridor of N5, and 2) in the case of failure of one corridor, the alternative routes could be used effectively. Barenis Chitral Drosh Kalam Dasu C hilas Dir Madyan Kagan saidu Dadar Manasehra Peshawar Havelian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Talagang Kalabagh Jhelum L akki Mianwali Sialkot Wana Khushab Tank Kulachi Pidi Bhatt Qamr ud Dim Kerez Shahdara Lahore Zhob Kasur Chaman Samundari Musa Khel Bazar Qila Saifullah Okara Pishin Ziarat Loralai Kot Addu Khanewal Quetta Pakpattan Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi Fort Abbas Dalbadin Dera Bugti Chachran Kharan Surab Khanpur J ac obabad Qila Ladgashi Besima Shuikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Jamao head Turbat Hoshab Sanghar Uthal Tandu Adam Pasni JiwaniGwadar Ormara Hyde rabad Pithoro Khokhropar Umarkot Karachi Thatta Mirpur Sakro Badin Mithi Diplo Jati Nagar Parkar Kati Bandar M-8 M-19 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-15 M-7 M-9 M-10 M-9 M-16 M-6 M-6 M-6 M-6 M-6 M-5 M-5 M-5 M-5 M-5 M-5 M-5 M-5 M-5 M-17 M-17 M-17 M-11 M-18 M-18 M-18 M-18 M-18 M-18 M-18 M-18 M-18 M-1 M-4 M-4 M-4 M-4 M-3 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-2 M-14 M-12 M-13 Shakargar Figure Location of Proposed Motorway Network 7-11

255 Table List of Proposed Motorway Network Code From To Distance (km) No. of Lane Cost (US$ Million) Remark M-1 Islamabad Peshawar On-going M-2 Lahore Islamabad Existing M-3 Faisalabad Bhatian Existing M-4 Faisalabad Multan BOT/PPP M-5 Multan Rajanpur BOT/PPP(ADB) M-6 Rajanpur Ratodero PSDP M-7 Kakkar Karachi PSDP M-8 Ratodero Gwadar PSDP M-9 Karachi Hyderabad To be widened M-10 Karachi Existing M-11 Chakwal Shorkot Proposed by PTPS M-12 Lahore Faisalabad Proposed by PTPS M-13 Lahore Sialkot Proposed by PTPS M-14 Sialkot Bhatian Proposed by PTPS M-15 Quetta Khuzdar Proposed by PTPS M-16 Hyderabad Ratodero Proposed by PTPS M-17 Bargah Rajanpur Proposed by PTPS M-18 Khairgarh Fort Shorkot Proposed by PTPS M-19 Khuzdar Bela Proposed by PTPS Source: JICA Study Team The total cost of these nine motorways is estimated to be US$ 2,892 million. The main planning points are as follows: While industrialization is deemed to be a key factor in Pakistani economic growth, industries have recently been locating in Punjab north of Faisalabad, especially around Sialkot and Gujaranwala. To support these industries, the existing M-3 should be extended to the north to Sialkot via Gujaranwala (M-14). At the same time, Lahore is connected directly with Sialkot (M-13) and Faisalabad (M-12). Among the four provincial capitals, only Quetta is served with no planned motorway. In order to provide an alternative route of N15, a motorway was proposed by the PTPS (M-15). In the long term, this line should be extended to the south (M-19) and connected with M-7. The other routes were planned mainly to provide shorter routes than the route taking M-1 to M

256 7.3.2 Highway Network The highway network configuration in Pakistan has almost been completed. However, most sections except N-5 are single lane roads (one lane per direction), which has a limited capacity as well as problems to secure safe traffic. Therefore, the main focus of road investment will be widening rather than new construction. By 2025, many highways will need widening into dual-2 carriageway due to heavy demand exceeding present capacity, especially in Punjab province. Figure shows the highways to be widened and improved. They will be examined at the evaluation stage for their economic viability and appropriate timing of implementation. Improvement / Widening of Highway 4 lane Highway 2lane Road Parachinar Thal Miran Shah Barenis Chitral Drosh Kalam Dasu Chilas Dir Mady an Kagan saidu Dadar Manas ehra Mar dan Abbottabad Peshawar Attock Cit Is lamabad Kohat Lachi Jand Gujar Khan Karak Kalabagh Chakwar Jhelum Kuh i Taftan Nok Kundi Dalbadin Nushki Chaman Pishin Quetta PanjpaiSpezard Kalat Lakki Mianwali Gujrat Sialkot Phalia Wana Jauharabad Tank Gujranwala Kulachi Sargodha Pidi Bhatt Dera Is mail Khan Chiniot Qamr ud Dim Kerez Bhakkar Lahore Faisalabad Zhob Jhang Kasur Samundari Mus a Khel Bazar Okara Qila Saifullah Shorkot Ziarat Loralai Kot Addu Khanewal Pak pattan Duki Multan Marnai Vihari Bahawalnagar Kohlu Mails i Sibi Talh Mawand Kahan Bahawalpur Dera Bugti Ahmadpur East Fort Abbas Liaquatpur Shaka Kharan Surab Dera Murad Jamali Jacobabad Khanpur Raimyar Khan Qila Ladgashi Washuk Nag Bes ima Wad Khuzdar Shuikarpur Sukkar larkana Khairpur Pnajgur Sar ah Parom Awaran Dadu Naushehro Firoz Mand Turbat Hoshab Bela Nawabshah Sanghar Jiwani Gwadar Pas ni Ormara Uthal Sonmiami Tandu Adam Pithoro Hyderabad Khokhropar Umarkot Karachi Thatta Mirpur Sakro Jati Kati Bandar Badin Mithi Diplo Nagar Parkar Figure Highway Improvement and Widening Plan 7-13

257 7.3.3 Cross River Development The density of bridges over the vast network of rivers in Punjab could be considered, to be low for such a populous area by any standards. This is particularly true for the river Indus. In order to improve the cross-river interaction of communities for more balanced regional growth and increased flow of goods, WB is currently studying nine candidate locations to select four sites for new bridges. In addition provincial authorities have also indicative plans to enhance cross-river community interaction by proposing nine bridges in Punjab province for implementation in the medium to long term future. Barenis No. of Bridges Chitral Drosh Kalam Existing 48 Dasu Chilas Dir Madyan Planned 17 Kagan saidu Dadar Manasehra Mardan Peshawar Havelian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Kalabagh Chakwar Jhelum Lakki Mianwali Gujrat Phalia Sialkot Wana Tank J auharabad Gujranwala Kulachi Sargodha Dera Ismail Khan Qamr ud Dim Kerez Chiniot Bhakkar Lahore Zhob Faisalabad Jhang Kasur Chaman Samundari Musa Khel Bazar Qila Saifullah Okara Pishin Shorkot Ziarat Loralai Kot Addu Khanewal Quetta Pakpattan Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi Fort Abbas Dalbadin Kalat Dera Bugti Ahmadpur E ast Liaquatpur Kharan Surab Dera Murad J amali Khanpur Raimyar Khan J ac obabad Qila Ladgashi Besima Shuikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Turbat Hoshab Nawabshah Sanghar Uthal Tandu Adam Pasni JiwaniGwadar Ormara Hyderabad Pithoro Khokhropar Sonmiami Umarkot Karac hi Thatta Mithi Badin Diplo Jati Nagar Parkar Kati Bandar Shakar Figure Existing and Proposed Bridges 7-14

258 7.3.4 Bypass Schemes (1) Needs of Bypass Most medium to small cities of Pakistan have developed along the major arterial roads. In almost all cases the development has been gradual from small town to large town, and medium size city to large city, just growing totally unplanned as ribbon development. The increase in road space has hardly kept pace with the growth in communities. To alleviate the traffic congestion, bypass schemes have been implemented in a number of cities, and numerous new schemes have been planned. The densities of by passes in the figure below illustrate the insatiable need for such highway schemes. This is also considered a quick fix to major traffic problems. No. of Cities National Highway Provincial Highway Barenis Chitral Existing 61 4 Drosh Kalam Dasu Chilas Dir Madyan Proposed 26 9 Kagan saidu Dadar Manasehra Mardan Peshawar Havelian Parachinar Islamabad Kohat Thal Lachi Jand Gujar Khan Karak Miran Shah Kalabagh Chakwar Jhelum Lakki Mianwali Gujrat Phalia Sialkot Wana Tank J auharabad Shaka Gujranwala Kulachi Sargodha Dera Ismail Khan Qamr ud Dim Ke re z Chiniot Bhakkar Lahore Zhob Faisalabad Jhang Kasur Chaman Samundari Musa Khel Bazar Qila Saifullah Shorkot Okara Pishin Ziarat Loralai Kot Addu Khanewal Pakpattan Quetta Duki Multan Panjpai Marnai Vihari Kohlu Bahawalnagar Mailsi Nushki Sibi Talh Mawand Kuh i Taftan Kahan Bahawalpur Nok Kundi Dalbadin Kalat Dera Bugti Ahmadpur East Fort Abbas Liaquatpur Kharan Surab Dera Murad J amali Khanpur Raimyar Khan J acobabad Qila Ladgashi Besima Shuikarpur Washuk Khuzdar Sukkar Nag Wad larkana Khairpur Pnajgur Sarah Parom Dadu Naushehro Firoz Awaran Mand Bela Turbat Hoshab Nawabshah Proposed by PTPS Sanghar Uthal Tandu Adam Existing as of Dec Pasni JiwaniGwadar Ormara Hyderabad Pithoro Khokhropar Sonmiami Umarkot Karachi Thatta Badin Mithi Diplo Jati Nagar Parkar Kati Bandar Figure Location of Existing and Proposed Bypasses 7-15

259 (2) Karachi Access Road Karachi Access Road (37.5km) connects Karachi port and Qasim port directly. This road prevents Karachi city from being congested with freight from Karachi/Qasim ports The Access Road, combined with the Karachi Northern Bypass, will form an outer ring road and will contribute largely to modify the transport problems in Karachi city. The Access Road is planned to pass through southern area of Karachi city avoiding residences, buildings and mangroves. It will begin from the east side of the bridge over the Baba Channel, which is planned by the Karachi Port Trust to construct through BOT scheme. The M.A. Jinnah Road in east wharf will be connected to the Access Road by ramp structures to secure direct access to the port area. The Access Road will run easterly mostly along sea coast with viaduct structures in the section along the Clifton Beach and the sections crossing urban areas, eventually reaching Qasim Port. This Access Road will be used more effectively to manage freights from the Karachi Port if a container dry port is planned in the Qasim Port area.in planning this road, the road alignment and road structure should be studied carefully to minimize land acquisition, resettlement and construction cost. Impacts should be assessed on natural and social environment such as mangrove, resettlement and so on. Karachi Northern Bypass To Hyderabad To Quetta Super Highway (M-9) Layari Expressway N-5 Karachi Port Clifton Beach Karachi Access Road Port Qasim Source : JICA Study Team Figure Karachi Access Road (3) Lahore Strategic Peripheral Route The Punjab P&D Department proposed a strategic route that would act as a bypass for the strategic intercity traffic that currently has to find its way through the urban streets of Lahore. The route as proposed would be a major step towards the long term plan of directly linking the Pakistan motorway, international route to/from India (via GT Road & Ferozepur Road), and the strategic radial intercity routes to/from Lahore, thus keeping much of the through traffic out of the city s urban streets. In addition it would allow intercity movement of goods vehicle to cross Lahore 24-hours a day. The project would need a full-scale planning, engineering and evaluation feasibility studies. Figure depicts an indicative alignment, and the exact alignment would be the outcome 7-16