The Afghan Transit Trade (ATT) has been severely hit following the countrywide turbulence that erupted in the wake of the assassination of Benazir Bhutto on December 27.

Afghan traders and their local counterparts claim that their financial losses could run into billions of rupees in the form of looting, damages of goods and the dismantling of logistic chain from the Karachi port to Afghanistan via land route.

Pakistan Railways (PR)--the main agency providing logistic services for transport of goods in transit from Karachi to Peshawar was paralysed.

According to media reports, the PR has suffered losses worth Rs12-15 billion during the ongoing unrest. At least, 165 different railway stations, 118 railway engines and 150 coaches of various trains were burnt or damaged in different parts of the country.

The internal rail communication system in Sindh was completely destroyed, disrupting the link of high PR officials at many railway stations.

The caretaker Federal Minister for Railways, Mansoor Tariq says that rioters have caused damages of billions of dollars and the PR is not in a position to absorb such heavy losses.

The federal government has been approached to extend its financial support to PR but it might take a month to restore normal operations, he explains.

The financial loss which will over burden the national kitty, has equally impacted the business of hundreds of Afghan traders, who are unable to know the current status of their goods stranded at different railway stations in Sindh.

Haji Gul Afzal Shinwari, president Pak-Afghan Traders Group, says the rioters had torched at least 70 wagons loaded with GITA at different railway stations of Sindh, out of which most of the items are believed to be burnt or looted.

“At the moment, we have no clear idea about the value of goods damaged or looted in the riots because we have not been given any information by the PR. We are waiting for the wagons to reach Peshawar, which is not possible at least for three weeks as announced by the PR,” says Mr Shinwari.

As uncertainty prevails about the goods, which were on way to Peshawar, the PR is also losing huge revenue which it generates by offering logistic services for the movement of GITA-- as for the last one week, not a single consignment could cross the border.

According to an official, the PR earn average Rs40 million per month through its 1250 cargo wagons made available for the GITA transportation from Karachi to Peshawar.

Pakistan is providing transit facility to land locked Afghanistan since 1965. Under the transit agreement, the government is bound to provide all logistic services for the Afghan imports reaching Karachi seaport to cross the border at two points--Chaman (Bulochistan) and Torkham (NWFP).

Apart from PR, the National Logistic Cell (NLC) transports transit goods from Karachi to Peshawar. It has also suffered losses as according to Mr Shinwari, a couple of its trucks were hit during the violence. Disruption of supply chain is a matter of concern for Afghan importers.

According to Mr Shinwari, 25-30 ship-load of transit goods reach Karachi port which are dumped there because neither the PR nor NLC is in position to carry them to Peshawar.

“This has not only damaged the quality of some of the goods of sensitive nature, but also increased the liabilities of the importers in the shape of detention charges and demurrage,” he explains.

The Afghan importers have to pay extra detention charges to the shipping companies, if they withhold the containers for more than the specified time period, whereas they also pay demurrage charges to Karachi Port Trust (KPT) for prolonging use of its warehouses.Many complain that ATT has never been a priority for the PR, as even when there were no riots or damages to its network, it was least bothered to allocate sufficient wagons for transportation.

Zia-ul-Haq Sarhadi, chairman Frontier Custom Agents Group, explains; “Because of the suspension of the PR, the Afghan importers have been compelled to pay almost the double to the NLC for timely delivery of the transit goods at Peshawar from where it is transported across the border through local trucks.”

According to him, per wagon fare of PR is Rs43,000, whereas the NLC charges Rs82,000 for transportation of same quantity from Karachi to Peshawar.

In his views, in spite of the fact the NLC charges are higher than PR, the importers consider it more viable than PR because if they don’t opt for NLC,they will have to pay for detention charges and demurrage. Daily 80 to 120 container-loads reach NLC Amangarh station from Karachi.

Mr Sarhadi was part of a delegation of traders dealing with GITA, which met the caretaker railway minister on Monday last.

“We told the minister that disruption of railway service will further deprive the country of handsome revenue, which it generates through GITA. Thus the PR has to allocate at least 40 wagons a day for it,” Mr Sarhadi said.

Geographical location makes Pakistan a natural hub for regional transit activities, but the fragile logistic and transport network, exposed in the last week violence, is sufficient to conclude that with this state of affairs, the country cannot turn itself into a transit corridor.