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Pakistan at the time of inception in 1947 inherited a system of transport, which though limited in scope, was functioning quite efficiently despite the severe strains of World War II. During the last fifty years, however, the system has undergone radical transformation, Some of the old and established modes e.g. railway have lost their pre-eminent role, road transport has acquired a predominant position and civil aviation has emerged as an important carrier. Other modes have also experienced sea change, both negative and positive. Nationally, the freight and passenger traffic has been growing at about 3% and 4.5% per year for the last 30 years. The road sector now accounts for 91 % of passenger traffic and 95 % of freight traffic.

While a lot of investments were made during this period the improvements in the system were not commensurate with the amount spent. Some of the major factors which contributed to the problem were:
(a) arbitrary and autocratic decisions regarding investments,
(b) inflated costs,
(c) absence of quality control,
(d) lack of professional competence, and
(e) last but not the least, total disregard for general public point of view

As a result, there were wide spread mal-administration, mismanagement and waste of scarce financial resources.

The existing transport infrastructure is inadequate and poorly maintained. The trade facilitation systems are archaic. Together with wide spread inefficiency of operation, Pakistan's transport system is imposing a cost, in excess of Rs. 220 billion annually on the economy. The country cannot afford such a huge 'transport liability' and needs transport to make a positive contribution rather than hinder the economic growth.

The problem will persist till such time radical steps are not taken to remove the root cause(s). Some of the measures which are imperative for ensuring economic and efficient development of the sector must be aimed at ensuring total transparency in decision making, professional handling, sanctity of tax prayers' money and ascendancy of public wishes. These measures are the corner stone of the proposed transport policy.

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 up to Rs. 200 million.

For international trade purposes, Pakistan is essentially an "island" as over 95% of the trade is through seaports and shipping. Globally, helped by the telecom revolution, the transportation sector is becoming increasingly efficient and the 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.

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 the 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 the transportation sector.

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.

Transport is no longer just the movement of passengers and goods. The ramification of transport movement is visible, directly and indirectly, throughout the socio-economic fabric of the country. Transportation plays a pivotal role in socio-economic development and welfare of the population of any country and contributes substantially to the Gross Domestic Product. Transport provides the space and time utility without which even the most precious assets are of very little value. This is true for all man-made as well as natural resources.

Nevertheless, transport is not all heavenly blessings, as it has quite a few negative effects also. Transport causes enormous problem of economic loss on account of ecological degradation and human suffering due to accidents and pollution.

Preparation of policy for a complex sector like transport is therefore a very difficult task and need to be evolved very carefully as briefly described below:

1 Priority Area: It is obvious that given the resource constraints, all the problems faced by the transport system cannot be rooted out simultaneously. Experience has however, shown that like all socio-economic problems, 85-90 per cent of the difficulties are caused by few important factors. Therefore, it is most prudent to focus all effort on a few major areas to achieve maximum dividends from the financial and other investments.

2 Scientific Bias: Although, transport policy is basically an expression of political philosophy of any party in power, it cannot be devoid of sound scientific principles and plain common sense. Any policy divorced of techno-economic realities would have no chance whatsoever of any success. It is therefore, essential that the policy must have strong scientific bias but tempered with political needs and popular public sentiments.

3 Consistency: Since policy package contains some of the measures which have long gestation period, this requires a certain degree of stability in national politics of the country. Unfortunately, the policies followed in the past have been swinging from one extreme to other over relatively short periods of time.

4 Public Acceptance: All said and done, the ultimate test of success or failure of any policy is the degree of acceptability by the public. Granted that it is not possible to achieve one hundred percent unanimity of view on any issue of national importance, nevertheless, it is utmost important that overwhelming majority of the population must go along with the strategy. Experience has shown that any policy based on the felt-needs of the community has the strongest chance of succeeding. Therefore, it is imperative that there should be fullest agreement of the public representatives, leaders of public opinion, professionals and intellectuals.

5 Continuous Activity: Experience has shown that problems are not going to disapear altogether, while every problem solving effort brings fresh problems in its wake. There is, therefore, need to create institutional arrangements to continuously monitor the sector and identify any serious problem(s) in its initial stage and suggest the best course to correct it before it goes out of hand.

"A system that provides efficient, safe, reliable, equitable, and environmentally friendly access and mobility for people and goods, thereby supporting the government's goal of increasing public welfare through economic growth, human development and poverty reduction."

To achieve this vision, the transport policy should be based on the following strategy :

(a) Focus on moving people and goods - not vehicles - and providing transport infrastructure and services, based on informed user demand while respecting the limited national resources.

(b) Acknowledge the reversing modal distributions will not yield major gains, therefore, ensure that each mode of transport carries its share of goods and passengers in the most efficient manner.

(c) Decrease the non-tariff trade barriers-to reduce the cost of transporting agricultural products, raw materials, and manufactured goods.

(d) Improve the reliability, safety, speed, and quality of transporting people and goods.

(e) Improve governance in transport institutions and ensure transparency in all transport decision making.

(f) Invest in transport infrastructure and services that shall serve economic priorities, social equity, and environmental sustainability.

(g) Encourage indigenous solutions for meeting transport services and infrastructure needs through appropriate emphasis on research and development.

(h) Replicate international successes in provision of transport services and infrastructure only after careful consideration to local circumstances and after appropriate research and development.

Almost all the sectors are facing serious problems, which have accumulated over the last fifty years. The sector wise position is as follows :

(a) Railways: The rail network inherited at the time of independence experienced marginal expansion up to 1980. During the last two decades almost all the branch lines have either been abandoned or scaled 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 Pakistan Railways (PR) is one of the largest loss making public sector entities in Pakistan with annual losses totaling Rs. 7.000 billion. Together with outdated management practices pertaining to the 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.

PR has gradually lost its market share of long haul traffic, i.e. its comparative advantage/niche to the road sector. All efforts over the last fifty years to reverse this trend have failed and there does not seem any likelihood of success in the near future. There is an 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.

(b) 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.

(c) Road Transport: There are approximately 4 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 the 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 the 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 the 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.

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.

(e) Urban transport: The urban transport is exclusively provided by the road transport. There are a number of very critical problems in Urban Transport Sector which need to be given serious consideration as enumerated below:-

(1) Urban Transport has to operate under two very powerful but dichotomous forces. On one hand is the most indigent segment of the society, which cannot afford to pay full cost of urban transport services. On the other hand there is a very vocal group of middle income group who demand quality service and can afford to pay for it. Considering the extremely capital intensive nature of the services and the severe financial constraints facing the country, it is not possible to provide uniform quality services for all users. The most viable course would therefore be to have a two-tier system whereby:

(a) Government responsibility is limited to providing urban transport to the most indigent segment of the society and on un-remunerative routes at a subsidized cost. The emphasis should, therefore, be on quantity rather than quality, possible use of Bus-Train technology developed by National Transport Research Centre (NTRC).

(b) The requirements of middle and upper middle income group should be met exclusively by the private sector providing quality services and charging full cost of operation.

(2) Regarding the urban mass transit systems, the critical examination of options has revealed as under :-

(a) The traffic problems of any large metropolitan city are spread over a number of corridors, therefore construction of small link of few kms along any one particular artery can obviously not provide any relief to the remaining areas. At least 100 km network is required to have an impact.

(b) The cost of even a very basic Subway presently is around one hundred million US dollars, which beyond the financial reach of most developing countries.

(c)There is hardly any subway system in the world which is meeting its full operating costs. The shortfalls are of the order of 50-60 percent and are met by government subsidy.

Contrary to the general misconception, there is no proof of any subway system on its own eliminating the problem of surface congestion in any city of the world.

(e) The provision of even most extensive network of subway does not do away with buses, which still remain a very important mode of any large urban transport system and invariably carry more traffic than the subway.

(f) Ports: The Ports sector essentially holds a monopoly over international trade, as over 95% is channeled through the two main ports-Karachi and Port Qasim. The growth in port traffic in the last ten years has been around 6% per annum. The berth capacity of these ports is considered adequate for the next twenty years but the approach channels need improvements. None of the two existing ports (KPT and PQA) have the required container handling facilities. There is still wide scope of containerization in the two ports.

On the land side, the main problem is the excessive handling charges and low labour productivity. As a result, the cash flow of the Karachi Port has dropped by 50% between l996 and l999.

For cargo, Karachi port is reported to be 1.5 times more expensive than Bombay, 4.5 times Colombo and 19 times Dubai. As a result, the shippers pay about Rs. 15.000 billion "extra" per year to the two ports-a cost which is passed on to the users.

Both the ports still have direct involvement in day to day operation. Experience has shown that the most desired course is the landlord concept in which the basic ports facility are provided by the public sector while all operational tasks such as stevedoring, piloting, etc are handled by the private sector.

There is serious lack of coordination among the two ports. Currently, both the ports tend of operate in competition with each other. With the creation of additional ports on Mekran Coast, the situation would be further aggravated. The problem can be overcome by creating a Supra Port Authority with both the ports under its policy control, which still maintaining day to day operational independence.

The third deep-sea port at Gwadar, on the Balochistan coast with an estimated cost of Rs. 20 billion, lacks economic and commercial viability.

(g) Shipping: The market share of the Pakistan National Shipping Corporation (PNSC) has dwindled over the years to only 5% of the national trade. Its' shipping fleet has diminished from 70 ships in the 70s to only 15 today. It has been consistently posting losses to the tune of half a billion Rupees annually.

Pakistan's private shipping sector, which was nationalized in the 70s, has not yet recovered, primarily due to lack of incentives and undue restriction on registration.

Coastal shipping along the Mekran coastal area is still far from being developed to any reasonable degree.

As a result, shipping which can be a great source of foreign exchange earning is losing this earning to foreign carriers to the tune of about 40 billion rupees per year.

The most crucial issues in shipping is the failure of the government to recognize that unlike any other mode of transport, the shipping sector is unique as its not encumbered by any bilateral agreements to allow it to call at any port. Any ship registered anywhere in the world, can pickup freight from any port and un-load at any port. This makes imposition of any kind of duty or taxes on locally registered ship totally un-necessary as it would only result in driving the ship owners out of the country in search of tax havens. To encourage shipping industry in the country, there should therefore be : (a) no duty/sales tax or any other types of tax on import/export of ships, their spares, other accessories, etc.

(h) Civil Aviation : The passenger and cargo air traffic has been stagnant in the past 5-6 years and is unlikely to increase much in the near future. With de-regulation of the domestic sector and "selective open skies" policies adopted during the 90s, the national carrier, PIA is facing stiff competition, and has been intermittently accruing substantial losses.

Major international airlines have stopped routing through, and operations to Pakistan primarily due to high landing and fuel charges viz-a-viz neighboring airports, especially Dubai as well as grant of fifth and sixth freedom rights to a few international airlines.

Only 4 out of 40 airports under the Civil Aviation Authority (CAA) are self sustaining and CAA is currently running a deficit of around Rs. 0.700 billion per year. Major new airport projects planned for Lahore and Islamabad will entail additional financial burden for CAA, which is still saddled with the repayment on the Karachi Airport.

CAA also plays conflicting role of a regulator and service provider simultaneously, which is against the established norms and has been the source of many of the industry's ills. There is pressing need to separate the regulatory functions from service provider. The regulatory responsibility should be entrusted exclusively to the CAA while Airport Development Authority (ADA) should provide the aviation infrastructure and services.

(i) Inland Water Transport: A number of past studies have shown little potential for inland water transport in Pakistan because of the multitude of dams and barrages on major rivers, all without navigation locks, and the decrease in the flow of the rivers during winter month, especially below Kotri. Some isolated links such as Sukkur to Kalabagh still have inland water transport activity, mainly for crossing purposes.

(j) Pipeline: Pipeline is an emerging mode for liquid transportation with huge potential. Since nearly half the port traffic tonnage is liquid cargo moving up-country, it can take major load off the road and rail network. But, unfortunately, the development of the pipeline has not kept pace with the demand with the result that currently only 23% of crude oil moves by pipelines, most by the effort of the private sector, especially refineries which has reduced the rail & road traffic load to some extent.

There is need to address the following major policy issues, which have hindered the development of an efficient transport system todate :-

(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.

(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.

[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.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

Commercial/Trade facilitation procedures and distribution/ collection systems in Pakistan do not respond to modern demands for efficient deliveries. This reduces the competitiveness of exports and increases cost of imports. Improving trade and transport facilitation for key import/exports is estimated to save around Rs. 29.000 billion annually, which is equal to the total ocean freight cost for these imports/exports.

Transport plays a key role in poverty alleviation as it provide access to basic health, education and other social facilities and increases per capita earning by reducing transportation cost. The roads in far-flung areas of the country have visible impact on the living standards of the population of the area within a few years of their construction. The tertiary rural roads, therefore, must form one of the core activities of the Poverty Alleviation Programme.

The transport projects being of long gestation period, require a degree of continuity in the policy to yield the desired result. In order to ensure the required stability, it is utmost important that the salient measures of the policy be given statutory cover.

In order to improve the transport sector, the following policy recommendations are made:-

The past policy of allocating a certain proportion of inland traffic to railway should be discarded and a more realistic approach of targeting quality of services rather than an elusive quantitative figure should be adopted.

Large scale investment need to be made for rehabilitation of the Railways physical infrastructure (tracks) and modernization and rationalization of the rolling stocks, signaling equipment etc.

Railway must operate on strict commercial basis and Government must meet the full cost of Public Service Obligations (PSO).

Railway Act of 1890 alongwith rules framed and manuals of operational prepared in nineteenth century must be updated to bring it at par with the requirement of 21st century, making full use of Information Technology.

Introduction of extensive in-service professional training for all levels and induction of new blood especially in the areas of modern management to improve efficiency and quality of Rail operations.

Considering the capital intensive nature of high speed passenger rail services, only three countries of the world have adopted this technology, only marginal improvements in the speed should be aimed at.

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

A dedicated Road Fund by imposing additional tariffs on the users and administered by Joint-Public-Private Board may be created for maintenance and upkeep of the national and major provincial highways.

The funds collected as toll charges on the national and provincial highways must only be spent on the maintenance of the respective roads

It is absolutely necessary to effectively check encroachments through the relevant Traffic Police and Highway Departments.

Unit cost of construction must be kept to the minimum by strictly confining the scope of work to the demand and adopting economical design evolved for low cost roads by NTRC.

Since the shortfall in the tertiary road network is too large to be bridged by conventional means, there is need for radical approach. The following two measures are proposed :-

The 56,000 km of canal roads, presently being used by the Irrigation Departments for inspection purposes should be opened for public use.

The successful experience of U.S.A. requiring every able bodied rural male to either work on road construction for ten days a year or pay for it may be seriously considered.

The role of NHA should be restricted to funding and regulatory agency for quality and safety leaving the execution of the projects and maintenance of network to the respective provincial highway agencies.

The scheme of providing bank loans on easy terms i.e. 12% with 7 years repayment against the comprehensively Insured vehicle as collateral need to be reactivated.

Use of bigger trucks and trailers to reduce the transportation costs and minimize the damage to road system be encouraged by appropriate incentives.

The present arrangement for NLC may continue for the time being but constantly monitored to ensure its continued relevance to rapidly changing transport scene.

The automobile industry being extremely capital intensive, require high labour productivity, solid support from vendor agencies and a large enough market is unlikely to become a viable proposition in the near future.

National Road Safety Council (NRSC) should be set up with Chief Executive as the Chairman and supported by professionally manned secretariat.

A system of proper patrolling of roads by a professionally competent traffic police must be introduced to check road accidents.

An Instructor's Training School should be set up to train persons engaged in driver training as well as testing.

The provincial traffic laws should also be updated and brought at par with the national laws.

One per cent (1%) of the Road Budget should be earmarked for the improvement of safety particularly low cost measures such as manpower training, accident black spots, etc.

Government responsibility should be limited to meeting the travel needs of the lowest income strata of the society at affordable cost. The emphasis should be on quantity rather than quality and possible use of Bus-Train technology developed by National Transport Research Center (NTRC).

The requirements of middle and upper middle income group should be met exclusively by the private sector providing quality services and charging full cost of operation.

Government must retain effective control with regard to safety and quality of service.

Urban rail mass transit system is highly capital intensive and require huge operational subsidy, therefore, it is not a viable option in the near future.

The berth capacity of these ports is considered adequate for the next twenty years but the approach channels need improvements.

Landlord concept should be introduced in which the basic ports facility are provided by the public sector while all operational tasks such as stevedoring, piloting, etc by the private sector.

None of the two existing ports (KPT and PQA) have the required container handling facilities. There is still wide scope of containerization in the two ports.

High port charges as well as cargo handling charges need to be brought at par with the other ports in the region.

A Supra Port Authority with both the ports under its policy control, while maintaining day to day operational independence for each Port, need to be created.

The third deep-sea port at Gwadar, on the Balochistan coast with an estimated cost of Rs. 20 billion, lacks economic and commercial viability.

The Pakistan National Shipping Corporation must be privatized without further delay.

To encourage shipping industry in the country, there should therefore be no duty/sales tax or any other types of tax on import/export of ships, their spares, other accessories, etc.

There is no likelihood of coastal shipping having any significant role in the near future.

The regulatory responsibility should be entrusted exclusively to the CAA while Airport Development Authority (ADA) should provide the aviation infrastructure and services.

Major new airport projects planned for Lahore and Islamabad will entail additional financial burden for CAA, which is still saddled with the repayment on the Karachi Airport.

Competition between PIA and other Pakistani private airlines on international routes need to be avoided.

The landing and fuel charges need to be brought at par with the neighboring countries.

Existing capacity of pipeline for transportation of oil cargo to up country should be augmented to reduce load on the road as well as railway, reducing transportation cost.

Direct involvement of the government in the provision and operation of infrastructure and services should be curtailed.

Government should be focussed on policy, planning, co-ordination, financing and regulation.

The Ministry of Transport should also include Civil Aviation and NLC with a "Planning and Coordination Wing" manned by skilled transport professional in all the core technical areas.

All the transport related agencies must have proper institutional arrangements for quality control, monitoring, research, etc to ensure improvements in delivery of services as per their charter.

A statutory framework be provided to ensure public participation in all development projects from local to national level.

Federal financing should be in the form of grants and loans as a percentage of the Project, with co-financing by the provincial and local bodies.

The project portfolio is far beyond the sustainable level and need to be pruned to match the allocations as indicated in the project documents to ensure timely completion and derivation of benefits.

Government subsidy should be considered only in well-defined cases of social welfare such as urban transport and PSO of Railways.

Government must regulate all aspects of transport but only to the minimum extent required to achieve socio-economic goals.

One per cent of Annual Development Budget of each and every Organizations may be earmarked for R&D purposes.

The government must develop a critical mass of transport professionals by sponsoring a Federal Human Resource Development (HRD) Programme 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 practising professionals through seminars, symposia, workshops.

Protect the poor against the adverse effects of changes in transport policies and projects.

Minimize the re-settlement and re-location of the poor community as a result of change in land use patterns for transport development.

Enable greater and safer use of non-motorized transport, especially in rural areas;

Provide employment through introduction of labor-intensive methods for constructing and maintaining tertiary roads;

Ensure community participation in decision making on local transport investment.

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.

Concept of Multi-modal Transport should be adopted for international trade to and from Pakistan.

Establishment of infrastructure facilities such as inland container depots, improvement/development of dry ports and container terminals etc for multi-modal transport.

Preference must be given to the construction of new roads in far flung areas under poverty alleviation programme.

Development of Farm to Market Roads (FMR) for facilitating access to agricultural produce of poor people should also be given high priority.

NTRC developed low cost road design should be used to achieve maximum length of roads within given resources.

Legal cover must be provided to ensure continuity in the transport policy to yield the desired result.