On February 11, the government has launched a compressed natural gas (CNG) bus service in Islamabad-Rawalpindi as part of a comprehensive programme aimed at providing modern environment-friendly public transport service.

Initially, ten buses are to ply on the roads, while arrangements have been finalised to operate in total 265 CNG buses on 10 different routes, under public-private partnership.

Indeed, the measure is salutary, but is the plan well conceived and properly coordinated? Public mobility had come to a virtual halt as most of the CNG stations in the Punjab and the NWFP remained closed during end January/early February due to gas supply suspension. The situation was worst in Islamabad-Rawalpindi where about 320,000 CNG-powered vehicles, including public transport, suffered as more than 90 CNG stations were closed down during the period. Imagine the situation on completion of another 7,000 CNG stations across the country that are in the pipeline..

According to recent reports, there could be a serious gas crisis in future, as demand of natural gas exceeds the supply. Pakistan has 52.70 trillion cubic feet (TCF) of original proven reserves of natural gas and has already produced 20.20 TCF (cumulative), whereas it produces 3.80 billion cubic feet (BCF). Natural gas is critical to the industry and economy as Pakistan meets its 50 per cent energy needs through gas. Gas demand is increasing by about 10 per cent annually whereas production is stagnant. The crunch is being felt as the cement industry switches over to the use of coal and power generation units have to use alternate fuels during three months of winter season. The World Bank estimates supply shortfall by the year 2009-10 in the range of 4-10 per cent annually and thereafter widening to 20 per cent or more.

On the other hand, plans are being implemented to introduce dedicated CNG buses, on a large scale, reportedly inducting some 5,000 large and 3,000 medium size buses within a period of five years. City District Government Karachi (CDGK) has initiated conducting Green Bus operational feasibility study on 40 identified routes in Karachi. For the purpose, the government of Sindh and CDGK will provide enabling environment to private bus operators. Punjab government has announced a 20 per cent subsidy to the CNG public transport. Also, conversion of 900 franchised diesel buses plying on the CNG mode is being undertaken in Lahore, for which duty-free import of CNG kits has been allowed. Introducing CNG buses in Peshawar is set to be launched by next month. In the second phase, the network will be extended to other cities countrywide. The government will bear 70 per cent subsidy while other stakeholders will share remaining 30 per cent interest on the initial purchase of buses on loan/leasing from banks/financial institutions on 80:20 debt-equity ratio.

The given scenario will result in increased CNG prices for the dealer and the consumer, and even the use of the CNG in vehicles on a large scale, as envisaged, could have limitations of gas supply. It may not be possible to cope up with the enhanced demand of natural gas for the transport sector on a sustainable basis. Resultantly, there would be a negative impact on the promotion of the CNG industry, in particular, and national economic growth, in general. In such a case, the public transport using the CNG will suffer most. Expansion of CNG supply network, such as construction of large CNG re-fuelling stations, has to be undertaken on a massive scale.

Comparative to diesel-operated, a CNG-fuelled bus needs frequent re-filling, and meaning high-pressure CNG will be required. There will be monetary, physical and logistic constraints to set up big re-fuelling stations for CNG buses in major cities. Price differential between diesel and the CNG is low that would further narrow in the wake of periodic increase in the CNG price, taking place in a phased manner for the last couple of years.

The latest studies in the Western countries show that environmental differences between the use of diesel and the CNG in buses are negligible, though it is generally perceived and publicized that the CNG is much cleaner fuel. In fact, while there is absence of diesel particulate emissions using the CNG, it emits a flock of chemical pollutants linked to health problems, but not yet cited and regulated by the environmental protection authorities. Thus, the use of CNG emits lower levels of oxides of nitrogen (Nox) and almost no toxic chemicals as compared to diesel-operated buses, but it produces higher levels of carbon dioxide and carbon monoxide than diesel.

These diesel-versus-CNG analysis reveal that the CNG has clearly higher fuel consumption (in diesel equivalents) than the conventional diesel bus, due to the lower average engine efficiency. Furthermore, the CNG buses are only 50-75 per cent as reliable comparable to the diesel-operated. Then there are safety concerns. The CNG buses are 2-1/2 times more prone to fire fatality risk, in comparison with diesel. Capital cost is higher by 30-35 per cent compared to standard diesel bus and also the operating and maintenance cost is higher, for technical reasons. The advanced diesel after-treatment technology, known as clean diesel technology, has been developed and will be introduced in the West within few years, replacing the CNG.

In order to sustain the capacity and capability of the CNG industry, which has already an investment of Rs70 billion, the government has to adopt practical measures ensuring that the extensive use of the CNG in vehicles would not pose any serious problems in future. This will be in the larger interest of the investor and consumer, besides that of the government that plan to give subsidy of as much as Rs37 billion to the sector during next five years, in case programme is implemented as scheduled.