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WB offers Pakistan $2 billion for logistics network
ISLAMABAD, Aug 19 : The World Bank would give $2 billion for rehabilitation of roads, railways and port facilities in Pakistan.
The bank indicated this at its high-level presentation to Prime Minister Shaukat Aziz for improving infrastructure and logistic network at the PM House here.
The Prime Minister directed the Planning Commission to set up a coordination cell and come up with a plan along with WB experts within four weeks so that an appropriate decision can be taken on a fast track basis.
During the presentation, the bank experts analyzed in detail the present conditions of the infrastructure in the country with particular reference to ports and shipping facilities, railways network and roads. They stressed the need for improving logistics, which will not only save costs but also meet the future requirements of a growing economy.
The premier said an efficient end-to-end logistic network is an essential requirement to meet the high trajectory growth in the economy.
According to the WB, Pakistan Railway is among the second largest cash-bleeding entity in public sector institutions that faces billions of rupees annual loss.
The Pakistan Railway is on the decline for the last three decades as its contribution to the freight traffic stands at 4 per cent in 2005 which was used to be 60 per cent during 70s and 80s.
The World Bank pointed out problems in Pakistan Railways signals system and suggested to the government to involve private sector to ensure its smooth functioning. The Bank also urged to implement the Pakistan Railways Ordinance that will help set up Rail Regulatory Authority (RRA).
According to a report prepared by the World Bank under the title “Reform of the Pakistan Rail Sector”, the freight service being offered by the railways is cost effective and five times more efficient than the road transport.
The Pakistan Railways is one of the largest loss making public sector entity after KESC as it faced a loss of Rs 6.957 billion in 1999-2000, Rs 5.430 billion in 2000-2001, Rs 4.529 billion in 2001-2002, Rs 5.972 billion in 2002-03 and Rs 7.748 billion in 2003-04.
The existing market share of Pakistan Railways is 4 per cent of freight traffic and 9 per cent of passenger traffic. Its infrastructure is 7,800 km network, 786 stations, 595 locos, 1956 coaches and 23,906 freight wagons. The existing number of employees of Pakistan Railways is 93,000 and most of them are unskilled. There are 70 to 80 per cent non-professional people working in the Pakistan Railways.
The employees productivity as well as average annual output per freight wagon is low in comparison with Sweden, Greece, France, Austria, India, China, Thailand, Malaysia, Korea, Indonesia and Bangladesh.
Keeping in view this dismal situation of Pakistan Railways, the World Bank recommended the government to initiate railway corporatisation and financial reforms.
The Bank says Pakistan Railways does not appear to have given sufficient management attention on resources to develop properly the freight business. Its freight business has inadequate loco availability, obsolete wagons and little scheduling priority.
International experience, the bank report says is that these problems will be resolved only when Pakistan Railways creates freight business entity, with dedicated staff and motive power. In Pakistan it will also require investment in freight locomotives and modern bogie wagons, the recommended the bank.
The Pakistan Railways has at least 13 low-density branch lines, which it has not been able to operate profitability. Traditionally in USA and more recently in parts of Europe, these short lines may be better operated by small specialized firms operating from a low cost base with focus on local markets.