ISLAMABAD, Jan 7: The World Bank has proposed Pakistan to devise a new regulatory framework to develop freight transport infrastructure to facilitate inter-modal connectivity and private sector participation since one of the major challenges facing the fractured transport system is the lack of a unified planning structure.

Freight sector inefficiencies are costing the national economy about Rs150 billion annually and low service quality is impeding Pakistan’s regional competitiveness, says a new report of the World Bank.

The current regulatory framework places transport is in the hands of a number of different ministries and agencies. The new regulatory framework should provide a platform for them to engage in dialogue with each other, much less attempt to coordinate policies and investments, emphasises the report: ‘Strategic Environmental, Poverty and Social Assessment of Trade and Transport Sector Reforms’.

In order for this new framework to effectively and efficiently facilitate private sector involvement, promote integration of different modes of transportation, and address the freight transport sector’s key challenges, it should have a broad scope covering: environment and social management, project and concession contract development, and monitoring and evaluation.

According to the Logistics Performance Index of the World Bank, Pakistan’s performance on most logistics indicators, including the quality of trade and transport infrastructure, is worse than that of other Asian countries.

The report points out that geography endows Pakistan with the potential to reap huge economic gains from becoming a hub for regional trade that will have spillovers for economic growth. China, India, Central Asia and Iran are among the dynamic economies that Pakistan could connect. However, the government’s decided action will be crucial to capitalise on this opportunity.

Citing example, it says that the granting of ‘most favoured nation’ status to India needs to be followed up with practical steps for an efficient payment system, a sensible trade policy that avoids excessive and unfair injury to Pakistan’s industry, trade facilitating government services, a sensible visa regime, and transport networks, the report suggests.

Different organisations have suggested investments in road and railway construction, rehabilitation and upgradation, as part of efforts to facilitate trade with Pakistan’s neighbors. However, most of the proposed investments still have not been justified on technical and economic grounds.

The trucking sector carries 96 per cent of the total freight traffic. The trucking sector is characterised by the presence of a small fleet of owners who generally own less than five vehicles. The bulk of trucking companies are centered in the port city of Karachi where trucking tends to be concentrated within an ethnic community.

Railways used to be the predominant mode of transportation in Pakistan. At its peak between 1955-1960, railways handled 73 per cent of freight traffic, compared to less than 4 per cent by 2011. Currently, it takes 21-28 days for railways to deliver upcountry at a distance of 1,800km, which is 4 to 7 times slower than in the US and China.

Port traffic in Pakistan increased 6 per cent annually over the period from 2000-2005, with container traffic realising the highest growth at 15 per cent per annum.

Karachi Port handles the majority of Pakistan’s sea-borne trade traffic. The bulk of the remainder of freight traffic – 25.2 million tons – is handled by the Port Qasim Authority.

Growth in bulk cargoes, namely coal, fertilisers, wheat, rice, cement, and clinker, has been even higher. Productivity per ship hour was found to be just slightly below the average for ports in the region.

Major impediments include post-customs delays and lack of rail services and logistical facilities to take containers out of the port, it says.