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Railways

Railways
The rail network inherited at the time of independence experienced marginal expansion upto 1980. During last two decades almost all the branch lines have either been abandoned or sealed down. The track rehabilitation has not kept pace with the requirements, there is serious shortage of locomotives and there is only a small proportion of bogie wagons. The productivity is very low (about half that of India) and PR is one of the largest loss making public sector entities in Pakistan with annual losses amounted to Rs. 7.000 billion. Together with outdated management practices pertaining to late 19th century, no infusion of new blood, in-appropriate organizational and manpower structure with no R&D effort and in-service training to improve professional skills, etc, rampant corruption and political interference, the railway has been brought to virtual stand still.

Pakistan Railways (PR) has gradually lost its market share of long haul traffic, i.e. its comparative advantage/niche to the road sector. All efforts over last fifty years to reverse this trend have failed and there does not seem any likelihood of success in the near future. There is obvious need for re-appraisal of the past strategy and adopt a more realistic approach of targeting quality of services rather than an elusive quantitative figure.

Although railway is basically an excellent mode for long haul bulk freight traffic, nevertheless the proportion of the passenger traffic as percent of total railway traffic is very high (70%) whereas passenger fares are only 40% of average freight tariff. The average speed of passenger trains in case of mail trains is about 100 KPH and for ordinary trains it is 55 KPH while the goods train manage only about 60 KPH for mail trains and 35 KPH for ordinary trains. The fastest passenger train has a speed of 120 KPH.

The achievement of higher speed is a very capital intensive proposition requiring huge amounts for track improvements, signaling and rolling stock, etc. It also needs a very large and highly sophisticated technological base. Since the financial constraints are going to be a factor in the foreseeable future, therefore, it would not be advisable to aim for very high speed rail.

Decline of Railways
The decline in the performance of railways over the last forty years in passengers and freight traffic characterized the neglect of this sub-sector. There was a need to get more goods off the road and on the rail. Preference had to be given to railways for long haulage and bulk transport but before this could be done there is a need for re-orientation of the railways to provide the requisite service level as a priority.

Inadequate Investment
Inadequate investment in railways had resulted in the in-operation of the existing locomotives and deterioration in the physical infrastructure of the Pakistan Railways. There was need for rehabilitation and modernization of the railways, improve conditions of tracks, modernization of rolling stock, signaling equipment etc.

Poor Customer Orientation
The private sector has to deal with the poor performance of PR. The transit time for rake trains is generally higher compared with road transport due to the shortage of locomotives and poor condition of existing locomotives, railway tracks and wagons. There is complete lag of customer orientation in the railways. Priority is given to handling GoP wheat imports and fertilizers. The rail monitoring system is week and loaded wagons are often difficult to locate. The procedure for claim settlements is tedious and lengthy.

Inadequate Planning Capacity
There is inadequate planning capacity in the railway department which even lack a transport economist. There is need for unbundling different kinds of rail services and reviewing the specific needs for investment, planning and management of each such as tracks, signaling, passengers and freight traffic.

Private Sector Participation
There is need to allow the private sector to invest in the running of freight trains efficiently and on professional basis.

Pakistan Railways (PR), which has traditionally been run as a central government ministry, is in a sad state of affairs. Since the 1960's. PR has gradually lost its market share of long haul freight (its' comparative advantage/ niche) to the private sector trucking. Currently PR accounts for only 5% of freight traffic compared to 73 % in 1955-60. Today PR carries only 60 % of the freight in absolute terms ( 4.7 vs. 7.89 billion ton km) compared to what it carried in 1970, whereas the total freight volume has increased 247 % during the same period. The situation on the passenger side is not encouraging either. In 1998, PR carried only 18.70 billion passenger km. compared with 16.73 in 1970. It's share of the passenger market has dropped from 42% in 1955-60 to 9% at present. PR is the largest loss making entity in Pakistan; annual losses on operations currently amount to Rps 7.17 billion or 77% of the revenue receipts-projected losses for this FY are 9 bil Rs.

Roads

Roads
Although the road system has expanded to 250,000 km during the last 50 years but there is still a shortfall of 150,000 Km, primarily in tertiary rural roads. This is depriving almost 40 percent of rural population from getting into main stream of the economy. Not only the problem is too large to be solved by conventional financial means those adversely affected can not wait for ever. There is an urgent need of bridging this gap by launching a radical programme of road construction by : (a) allowing public use of 56,000 km canal roads, which are presently exclusively used for inspection purposes by the Provincial Irrigation Officials. These roads are ideally situated to serve the farming community and at a very low cost can reduce the gap by 56,000 km in a short period, (b) requiring every able bodied rural male to either work for 10 days a year on road building or pay equivalent amount of daily wages as was done in U.S.A. to construct the basic network of roads in their respective areas till need is met, (c) keeping the unit cost of construction to the minimum by confining the scope of work to the demand, and (d) adopting most economical design evolved by NTRC for the low cost roads.

The road sector has been the main recipient of the public sector funding from the public exchequer and currently accounts about 86% of PSDP of Transport Sector. Despite this, the maintenance backlog has assumed alarming proportion due to the past policies where the main focus has been on the new construction. Even rehabilitation of N-5, which serves as the main economic corridor between Karachi and Peshawar has been lagging behind. Over 50% of national and provincial roads are in poor condition due to insufficient maintenance, overloading, and poor construction quality. Deferred road maintenance, on the federal and provincial road network alone, is costing the economy Rs. 140 billions per year. Efforts to seek private sector investment in road sector have not been very successful. It is therefore imperative that not only the funds collected as toll charges must be spent on the maintenance of the respective roads, a dedicated Road Fund administered by Joint-Public-Private Board by imposing additional tariffs on the users.

The role of National Highway Authority (NHA) also need to be reviewed. The present charter of NHA has not been effective in judicious selection of the projects, confining the scope of the work to the need, checking cost inflation, assuring quality control, doing much needed R&D to protect the investment and last but not the least, preventing or even limiting the mis-appropriation of funds to an acceptable level. The problem stems from the dual role of financier as well as executor of the projects. There is need to re-organize NHA as only a financing and regulatory agency. All the projects execution should be carried out through the provincial highway agencies, exercising strict financial and quality control check.

From capacity point of view, the primary network of roads is quite adequate and can serve the traffic demand thus precluding any need for construction of high capacity facilities such as motorways.

Another very serious problem, which has already reached alarming proportion is the extent of encroachments both on urban as well as inter-city roads. The net result is that a large part of the investment made cannot be put to public use. No amount of infrastructure expansion can be of any benefit if fool proof arrangements are not made to ensure that it is used for the purpose for which it is made. It is therefore absolutely necessary to check encroachments effectively through the relevant Traffic Police and Highway Departments.

Road Transport
There are approximately 4.000 million vehicles in the country, out of which nearly 50% are motor cycles and 15% agricultural tractors. More than half are concentrated in few major cities. The vehicular population has been growing at the rate of 8.5% during last ten years. The road transport is almost entirely in the Private Sector. The fleet ranges from multi ownership of single vehicle to few hundred.

The public sector corporations, which operated nearly 2,250 buses in major cities of Punjab, Sind and NWFP, employing about 50,000 staff have been closed down and operation handed over to the private sector. The private sector public road transport services, while being somewhat efficient, lack quality and reliability. Efforts are currently underway in some large cities to introduce private franchised services to improve service quality. The inter-city bus operations are also in private hands.

The road freight services are mostly (95%) in the private sector, though fragmented but very efficient. The public sponsored National Logistic Cell has a 5% market share, and enjoys a preferred status.

One of the major hurdles hampering the growth of quality services is the lack of availability of finances for the private sector road transport. The usurious terms of hire-purchase currently prevailing in the country (upto 60% interest rate) has totally strangulated the Industry as no legitimate business can survive under such harsh condition, much less flourish. To over-come the problem, the scheme of providing bank loans on easy terms i.e. 12% with 7 years repayment against the comprehensively Insured vehicle as collateral launched during,.1988-89 need to be reactivated.

The trucking industry is operating with 9 ton Bedford truck as its main stock. The vehicle is very expensive to operate fuel in-efficient and under-powered to be economically used for long-haul. Lately bigger trucks and trailers have been introduced but rate of induction is very slow. There is urgent need to encourage use of bigger trucks and trailers to reduce the transportation costs and minimize the damage to road system.
National Logistic Cell was created in response to a national emergency in 1978 to overcome the shortages of essential commodities due to choking of distribution systems at Port and the Railways. The task was admirably performed by them. To operate as a commercial concern vitiate against its very charter and hence not desirable. The chances of NLC succeeding as purely commercial venture are very meager especially In view of highly competitive nature of trucking industry in the country. NLC has become a very important national asset and may be treated as such. The present arrangements may therefore continue for the time being but constantly monitored to ensure its continued relevance to rapidly changing transport scene.
The automobile industry in the country is in a very nascent stage. The present levels of activities are confined to only the assembly process. The pace of deletion is very slow. Considering that the automobile industry is extremely capital intensive, require high labour productivity, solid support from vendor agencies and need a large enough market to enable it to become a viable proposition, the potential for a major breakthrough in this sector is not likely in the near future.

Road Safety
The safety record of the road transport, both passenger and goods, is appalling, with six to seven thousand (6000-7000), 140,000 fatalities and 1,400,000 damage only accidents is incurring a total loss of Rs. 45 billion per year. The rate of road accidents though declining over the past one decade, is still very high as compared to the developed countries. The root cause of accidents is the road-user and the other factors such as quality of roads and vehicle fitness, etc have only marginal effect. Driver training is of very poor quality as the schools are manned by the individuals who are not properly qualified to impart such training. Nevertheless, education has also proved to be of limited value as regard behaviour change, therefore, enforcement holds the key to alleviating the problem. On the other hand, the traffic police as constituted presently completely lacks professionalism and is totally ineffective as regard their primary duty i.e. ensuring discipline on the road. The matter is further aggravated by extremely out-moded laws and adjudication processes, and total absence of coordination at the national level and lack of adequate financing. . There is urgent need to : (a) set up a National Road Safety Council (NRSC) with Chief Executive as the Chairman, supported by professionally manned secretariat; (b) proper patrolling of roads by a professionally competent traffic police, (c) setting up Instructor Training School (s) to train the persons engaged in driver training as well as testing, (d) bringing the traffic laws at par with international standards, and (e) earmarking 1.00% of Road Budget for the improvement of safety, particularly low cost measures such as manpower development, accident, black spots, cycle tracks, footpath etc.

Two Systems
There is a mixture of two systems; the old and the new that worked simultaneously in Pakistan. This system led to traffic grid locks, delayed deliveries, longer turnaround time, higher vehicle depreciation and maintenance cost and non-standardization of vehicles. This mixed system is expensive, time consuming for service users and environment unfriendly.

Lack of Planning and Management
There is lack of planning and management of the highways resulting in regional disparities, poor design and maintenance. There is a need for development of a cohesive plans for improving road infrastructure.

Lack of Appropriate Institutions
The National Highway Authority is inadequate to deal with the current state of issues. There is a need to reorganize the bodies responsible for planning and coordinating the development and maintenance of roads and highways to make them operate on professional basis. There is a lack of public-private partnership and it is necessary to initiate a dialogue between the two for sustainable institutional development.

Lack of Investment
There is need for improvement of roads, construction of bridges, proper maintenance etc. For this purpose it is important to consider the establishment of a road maintenance fund and phased privatization of road maintenance.

Lack of Rural Access
Rural access roads forms only 7.5% of total road infrastructure investment. This level of investment had to be enhanced in order to achieve the objectives of poverty alleviation.

Road Safety
Another major problem posed by non-standardized vehicles with no attention to size and laden weight. There is a high degree of overloading and vehicles plying with high axle loads. There is also lack of emission control and little importance is given to road safety and environment. There is also lack of legislative control over road transportation. It is important to finalize and promulgate the Draft Road Safety Act.

The road system has expanded significantly in the last 30 years. The road infrastructure has been the main recipient of the public sector funding from the annual Public Sector Development Program (PSDP). Currently, transport sector accounts for the largest share of PSDP, about 27%, of which nearly 88% is allocated to roads. Within the roads sector, the main focus in the past 10 years or so has been on the development of the main economic corridor (N-5: Karachi- Peshawar), including construction of new motorways along this corridor. The motorway program currently accounts for about 75 % of the total federal road sector allocation, and future liabilities to the tune of 75 bil Rs plus, and an operation & maintenance budget requirement that can not be recovered from tolls due to low traffic volumes. The road network, despite increasing three-folds since 1975, is inadequate in size and connectivity, compared to other developing countries and is in poor condition due to insufficient maintenance, overloading, and poor construction quality. The funding available for overall maintenance programs, inadequate to start with in the 1980's have decreased in light of growth in the size of the network. According to a Planning Commission estimate, the current funding available for roads maintenance is only 35% of the normal needs-a substantial chunk of this money is lost to rent-seeking and that what is actually spent on the road is usually not at the right place at the right time. There are hardly any private sector investments in the roads infrastructure.

The private sector has essentially taken over the roads services. Except in one province (NWFP), the government operated inter and intra city bus services have been closed down due to inefficient and loss making operations. At one time, the public sector bus companies operated nearly 2250 buses in Punjab and Sindh, employing about 50,000 staff. Instead, private vans/ wagons became the main source of public transportation within the cities. Efforts are currently underway in some cities to introduce buses through private franchises to reduce congestion and pollution caused by wagons and private cars. A constraint on this is the huge liabilities that the defunct public transport corporations have left with provincial transport departments and banks, e.g., the Punjab Road Transport Corporation Liability with [Punjab] Transport Department is around 13 bil Rs. Another problem is that the private sector road services, which are almost entirely de-regulated, while being somewhat efficient, lack quality and reliability, and bear serious external risks vis-à-vis environment, health, gender and other social issues.