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Group
Coordinators |
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1 |
Mr.
K Raffat Zaheer
Secretary General
Association of Road Users of
Pakistan |
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2 |
Mr. A
Aleem Khan
Planning and Consulting Engineer
A. A
Associates |
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Administration of Transport:
Three federal ministries and the four provincial
governments share responsibility for the transport sector. At the
Federal level recently created Ministry of Communications and
Railways is responsible for Roads, Road Transport, Ports, Shipping,
Post, and Railways, while Ministry of Defense looks after Civil
Aviation and National Logistics Cell is an attached department of
the Planning Commission. The Provincial Governments are responsible
for provincial roads and road transport.
National Economic
Council (NEC) is the apex body headed by the Chief Executive setting
policy guidelines and approval of macro-economic development
programmes of the country. Planning Commission prepares the national
five-year development plans and the annual Public Sector Development
Program (PSDP) for the approval by NEC, beside appraisal of
individual transport projects for approval by the CDWP and ECNEC.
PDWPs approve provincial projects upto Rs. 200
million. |
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The
International Scenario
For
international trade purposes, Pakistan is essentially an "Island" as
over 95% of the trade is through seaports and shipping. Globally,
helped by telecom revolution, transport is becoming increasingly
efficient and cost of passenger and freight services are falling.
Since the 1990s, the maritime part of the international cost has
decreased considerably, especially on the major east-west route.
However, in the lesser developed countries, the traditional trade
barriers, inadequate transport infrastructure and higher logistic
costs are impeding the chances of sharing the fruits of global
economy.
What is
Transport Policy?
Transport
policy is the fundamental document, which guides the development of
transport in any country. Without such a framework, the development
activities in this vital sector would be like a rudderless ship
adrift on the high seas. Being on the total mercy of the wind, the
probability of such vessel reaching its ultimate destination on time
would be abysmally low. The present sorry state of transport in the
country, to a large extent, is due to absence of a clear policy
document.
A careful perusal of the transport policy documents
of the developed countries reveal that it is actually the political
philosophy of the regime in power concerning fiscal, administrative
and other relevant measures for the development of transport. It
lays down in clear, precise and common sense terminology, the
approach of the Government to deal with issues relating to
transport.
The Transport Policy must set realistic
socio-economic development goals achievable within the available
resource and other constraints, must be comprehensive and fully
integrated, must be responsive to the needs of the users in general
and most vulnerable segment of the society in
particular.
Key Issues
Addressed
The Policy is
currently being prepared by National Transport Research Centre (NTRC) of MOCommunnications with support from MOFinance and the
Planning Commission. It has formally requested the Bank to assist in
this effort through the TSDI. The Government has already prepared a
first draft Policy Paper on Transport. This has been sent to the
Bank and the wider TSDI team for review and for forming the basis of
the final policy after wider consultations and deliberations. The
MOC's web site currently announces this effort, and links interested
browsers to the TSDI site.
Bank's
[internal] agreed WPA outcomes for Pakistan's Transport Sector
support GOP's effort through TSDI-
The medium-term outcomes are: Enhanced facilitation of trade
and transport initiatives and an improved basis for delivery of
essential and accessible transport services. The FY-01 outcomes are:
commencement of a transport facilitation program and preparation of
a draft National Transport Policy Document. TSDI will have a major
contribution in delivering the Bank's agreed medium and short-term
outcomes for Pakistan's Transport Sector. |
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Major Policy Issues
There is need to address the following major policy issues,
which have hindered the development of an efficient transport system
todate :- |
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(a) |
Role of government:
The government in the past has provided
infrastructure, operated transport and regulated the system. These
are the conflicting roles of being financier, executor, auditor, and
regulator at the same time. The government has also focused on
individual projects rather than programs to meet the deficiencies in
the transport sector. The approach adopted by the successful federal
governments around the world is to reduce direct involvement in the
provision and operation of infrastructure and services, especially
as individual projects and focus on policy, planning, coordination,
financing and regulation on program basis only, covering all major
areas, particularly hitherto neglected such as Urban Transport,
Highway Safety, Human Resource Development, R & D, institution
building trade, facilitation and other social and environmental
issues. |
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(b) |
Administration of transport:
Since 1976, railways and roads have been competing,
rather than complementing each other. With the integration of
Ministries of Railways and Communications recently, the problem has
been alleviated to a large extent. Nevertheless, there is still very
little interaction at the working level for planning and
coordination. To achieve the objective, it is imperative to create a
Ministry of Transport, with Civil Aviation & NLC as its part and
a Planning and Coordination Wing manned by skilled transport
professionals in all the core technical areas. |
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(c) |
Organizational structure :
The various federal transport agencies such as
National Highway Authority, Karachi Port Trust, Port Qasim
Authority, Railway Board, Pakistan National Shipping Corporation,
National Tanker Corporation, Pakistan International Airlines,
National Logistic Cell, and Civil Aviation Authority do not have the
required organizational structure to bring about the desired
improvements in delivery of services as per their charter. The most
glaring deficiency is the absence of quality control, monitoring and
research. |
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(d) |
Public Participation:
Considering that not only each and every development
scheme is aimed at public welfare and every rupee spent on such
projects come from the public, it is the fundamental right of the
citizens to have the final say in such matters. Unfortunately, till
todate the public had almost no say in transport investments. There
is a general lack of transparency in the decision making process in
the transport sector. All PDWD, CDWP and ECNEC working papers are
secret/confidential documents. In the developed countries with
democratic set-up, this is achieved by the mechanism of public
hearing. There is need to evolve a statutory framework to ensure
user feedback regarding all development projects from local to
national level. |
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(e) |
Financing:
Financing is one of the most potent tools in the hand of the
federal government to ensure implementation of its transport policy.
Unfortunately, in the past this tool has not been effectively used.
As a result, the federal government was not able to secure
implementation of its policies. There has been two serious problems
in this regard. Firstly, federal government has been generally
providing 100 percent financing for individual projects and
secondly, distribution of available finances among approved projects
has not been equitable. Since in a democratic set up "Planning by
Directives" is not feasible, financing is the only instrument
through which voluntary implementation of the policy is assured.
This is generally achieved by using financing as an incentive for
wider acceptance of policy objectives. |
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(f) |
Large Portfolio:
The international experience has shown that the public sector
will continue to bear primary responsibility for provision of
transport infrastructure, as it is generally not as attractive to
private investors and operators as power or telecommunications
infrastructure. Despite the fact that every project document
indicates a clear time frame for execution, no attention is paid at
the time of approval to the annual financial outlays available to
achieve the timely completion. As a result, a large number of
projects lag behind. The resulting delays cause cost escalation,
deprive the user of the benefits and eventually cost the public
exchequer very heavy. There is urgent need to prune the project
portfolio to the sustainable level where the allocation indicated in
the project documents are fully met. |
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(g) |
Cost Recovery:
Transport improvements are generally not self-sustaining.
Nevertheless, as a principle, users should pay costs incurred on
transport improvements, which must be kept to the minimum by making
the scope of work confined to bare minimum required to meet the
genuine demand of the users. Government subsidy should be considered
only in well-defined cases of social welfare such as urban transport
and Public Service Obligations of the Railways,
etc. |
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(h) |
Regulation:
Regulatory power of the federal government is another
important tool for implementation of its policy agenda.
Unfortunately, in the past, this has not been fully and fairly
utilized. On one hand, it has been excessive and on the other, too
little. Experience has shown that too much or too little is always
detrimental and maximum return is obtained by a balanced approach.
Road Transport, especially in urban areas, has been subjected to
un-reasonable tariff regulation resulting in private sector shying
away from financing quality services. On the other hand, there is
almost no regulatory mechanism for safety and environment
degradation. It is now an accepted principle that the government
must regulate all aspects of transport but only to the minimum
extent required to achieve socio-economic goals. |
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(i) |
Research and Development:
Not only rapid changes have taking place in the transport
technology during last century, the trend continues. All the
advancement has been spearheaded by the developed countries, but due
to the nature of the sector, the improvements can not be transferred
off the shelf to the developing countries. It invariably requires
considerable indegenization before yielding positive results. This
makes it imperative to have a very strong indigenous R & D base
to take advantage of the technological advancements taking place in
the developed countries. But unfortunately, many of them are very
few R&D institutions in the field of transport, some of which
are only in name and others in suspended animation. The past neglect
of R&D has resulted in adopting planning and design
specifications not relevant to local conditions and causing billion
of rupees loss to the national exchequer. The major hurdles in the
development of local R&D in the past have been : (a) negative
attitudes toward R&D and (b) Lack of adequate finances. Whereas
attitudes are likely to improve in due course with wider spread use
of Information Technology, the problem of finances are of urgent
nature. This can be overcome by earmarking one per cent of Annual
Development Budget of each and every Organizations for R&D
purposes. |
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(j) |
Human Resources:
The transport
sector requires multi-disciplinary human resources, which are not
readily available in the country. The primary reason for this being
absence of indigenous institutional arrangement to impart higher
skills and technical know-how. The local universities do not offer
graduate level courses in transportation and related fields. As a
result, the country is totally dependent on foreign universities for
meeting the domestic need.The government must develop a critical
mass of transport professionals for the transport. This can be
achieved by sponsoring a federal HRD Programme for transport
consisting of : (a) M.Sc. courses in the local universities; (b)
scholarship for Ph.D. in renowned university of the developed
countries; and (c) in-service training for practicing professionals
through seminars, symposia, workshops. The financing for the
programme should be on grant basis to the tune of 80 percent of the
cost. |
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(k) |
Social Issues:
There
is a need to protect the poor against the adverse effects of changes
in general transport policies and programs; minimize the amount of
resettlement and, where unavoidable, mitigate the effects of
resettlement; enable greater and safer use of non-motorized
transport, especially in rural areas; eliminate gender biases by
integrating the transport needs of women; emphasize access rather
than quality in rural transport networks; support cost-effective,
labor-intensive methods for constructing and maintaining tertiary
roads; ensure community participation in decision making on local
transport investment. |
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(l) |
Environmental Impacts:
The transport infrastructure and services invariably cause
environmental degradation. The new transport facilities such as
roads, railway lines, airports, etc. has adverse environmental
impact. Similarly, vehicular pollution cause serious health hazard.
The government must address health and environmental impacts of
transport as a top priority and ensure integration of environmental
and economic elements in the project at appraisal
stages. |
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Lack of Supportive Policy Framework
The private sector in Pakistan was dynamic and vibrant and
was in a position to make a significant contribution for the
development of the transport sector in Pakistan. However, it
required a supportive policy framework that did not encumber it in
bureaucratic Transport policy that embodies a well thought out
vision and objectives for the Transport
Sector. |
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Non-Participatory Process of
Policy Formulation
Policy
formulation was undertaken without any dialogue, discussion or
consensus building with the private sector. There was need for
public-private partnership. The process of policy formulation had to
be restructured to allow room for private sector participation.
There was need for public debate and the preparation of white papers
in the formulation stage to make it more inclusive. Women had to be
included in the process. |
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Lack of Security of Investments
There was need for an enabling environment that
would ensure that investments made in the transport sector by
private entrepreneurs were secure and that adequate returns on
capital invested in the transport sector. |
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Lack of incentives for Private Sector
Participation
For
private sector participation, fiscal policy had to be framed keeping
in mind the concerns of the private sector. The current policy was
irrational. Furthermore , Privatisation was only possible in a
secure policy framework in which cleat messages and inventive were
given to the private sector. |
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Encourage indigenous
Manufacture and Self-reliance
There was need to develop the indigenous capacity for
manufacture and increase the level of self-reliance. In this regard
there was a need to provide some measure of protection to the local
industry ion merit basis. |
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Fiscal Policy Protection
There was need to consider some form of fiscal
protection as well worked out policy that included protection from
custom duty and rationalisation of taxes and duties from the
perspective of transports sector needs. |
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Inadequate Information Sharing
The transport users community did mot have
adequate information on the conditions that were essential for the
satisfactory functioning of the transport industry. A principal
problem was the loss of trust between the public and private
sectors. The information offered by the private sector was generally
regarded as an attempt to justify the increases in rates. The public
sector agencies did not appreciate the conditions under which the
private sector operated and did not feel the need for sharing of
information.
The transport sector needs to make use of the
information technology that has revolutionised other
industries. |
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Absence of Performance Monitoring
There was need for a comprehensive,
structured supervisory organisation for monitoring performance data
and establishing standards in the industry on a national basis and
on the need to assess the fairness of rates, the degree of
investment, profitability of operations. |
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Fragmentation & Proliferation The fragmentation of the institutional
framework in the transport sector had led to a lack of understanding
of the problems of the private sector. The proliferation of
institutions to which the private sector had to apply for approvals
and for regulatory mattes did not contribute to the building of a
partnership between the public and private sector and had been
detrimental for the development of the transport sector in
Pakistan. |
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Institutional Collapse
The private sector participants felt that the
public sector institutions in Pakistan were experiencing
institutional collapse. There was no clear delineation regarding the
jurisdiction of some of the transport sector institutions, while
there were questions associated with the continuation of some
institutions like the NLC. There was need for institutional reform
which would determine the rationality of the institutional
infrastructure and integrate and lead to more effective
co-ordination among the existing
institutions. |
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Lack of Professionalism
Lack of professionalism in the public sector transport
providers and regulatory bodies was a principal drawback for both
private sector service providers and qualification and experience.
Recruitment at lower levels have also been undertaken on
non-professional basis. Lack of performance orientation has
contributed to inefficiencies. |
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Service Orientation
The public sector agencies needed to change their
orientation in dealing with private sector entrepreneurs, users and
service providers. Without this change of orientation the
development in the transport sector would be a difficult and slow
process. |
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Lack of Transparency in Contracting
There was little transparency in contracting
leading to poor quality construction and maintenance of the
transport infrastructure. |
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Lack of Proper Planning &
Implementation
Decision-making was ad-hoc, implementation was poor and the
management of the transport sector was being undertaken in an
extremely in-efficient manner. Many of the projects were incorrectly
designed. There was lack of professionalism in the
sector. |
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Human Resource Development
The level of skills and training of the people
engaged in the transport sector was generally deficient and was a
major obstacle in the development of the transport sector on modern
and efficient lines. |
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Environment Aspects
The transport sector was a major contributor to pollution I
Pakistan. This was a result of improper maintenance, lack of
enforcement of existing regulation, use of old vehicles. Etc. There
was need to undertake strict measures to deal with the environmental
impact of the transport sector as the problem was likely to grow in
the future. |
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Energy Conservation
The
transport sector was a principal consumer of imported energy. There
was need to undertake conservation measures, properly evaluate the
use of clean fuel such CNG and undertake energy conservation
measures. |
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Key Transport Sector Issues to be Addressed by
TSDI
26 NTRC/MOC/GOP
along with the Bank, have identified the some key sector issues that
will be the focus of the policy. These will also be the core issues
that will be dealt with in the Bank's policy and strategy note, and
are as follows.
- Role of government in
transport
- Administrative structure for
transport at federal, provincial and local government level
- Organisational structure for various
agencies dealing with transport
- Public participation in decision
making
- Financing - options available,
specifically address the issue of private investment in
transport
- Cost recovery (tariffs, user
charges, fees, etc.)
- Human resource development (critical
mass for manning agencies)
- Safety
- Environment and social
(sustainability and equity)
- Research and Development
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April 2001 |
The World Bank, in conjunction with MOC, NTRC is
organising a Transport Workshope from 24 to 26 April, 2001. |
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