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Pakistan - Infrastructure

Infrastructure plays a pivotal role in the development and a major contributor to growth of a country. A strong efficient and affordable infrastructure is critical element of good investment climate and therefore is precondition to sustain the growth momentum. High growth in recent years is increasing pressure on existing infrastructure in Pakistan.

The domestic transportation system was not well developed at independence. Railroads were the main means of transportation, but the network in West Pakistan had been constructed under the assumption that the area formed part of a larger subcontinental economic and political entity and was not suited to the needs of the new nation. Considerable development was necessary to improve links between Karachi, Pakistan's first capital and the country's principal port and commercial center, and Punjab, where Islamabad was established as the new administrative capital in 1962.

In the 1970s and 1980s, road and air networks grew considerably faster than did the railroads. Between FY 1978 and FY 1992, the volume of freight and the number of passengers carried by rail increased only slightly, whereas road-borne freight and the number of air passengers more than doubled. In 1994 transportation policy was aimed at shifting more of the traffic back to the rail system, with a long-term goal of a railto -road freight traffic ratio of 33:67 by 2000. However, it appears unlikely that this target will be met.

The Government recognizes the importance of improving and expanding infrastructure services for sustaining economic and social development in its Medium Term Development Framework(MDTF) 2005-2010. Pakistan's infrastructure needs are massive and its resources are limited. Not only is there limited fiscal space, there are also huge gaps in public sector capacity to build and operate infrastructure. Improved quality and service coverage in power and water supply, sewerage treatment, transport and logistics are vital for Pakistan's economy and the livelihood of its people. Tight fiscal constraints require innovative approaches, away from the traditional role of the Government as the service provider, to ensure that the massive investment needs are financed with the assistance of the private sector.

Pakistan’s transportation infrastructure has suffered from government neglect. Although there are some signs of improvement, foreign observers often contend that the poor transportation infrastructure inhibits economic growth potential.

Roads

In June 1992, the road system covered 179,752 kilometers, of which asphalt roads made up 51.2 percent. The number of motor vehicles more than doubled during the 1980s. Their number was estimated at nearly 2 million in 1992, including 932,000 motorcycles, 454,000 automobiles, 220,000 tractors, 157,000 trucks and vans, and 37,000 buses. In March 1992, the government approved a five-year Rs73 billion program of road construction and rehabilitation. This plan included building a four-lane 339-kilometer highway between Lahore and Islamabad, scheduled for completion in mid-1995. Road transport is mostly in the private sector, but some passenger and freight services are provided by public-sector corporations.

Roads, road traffic, and motor vehicles all have increased substantially since the early 1990s. According to government statistics, from 1994 to 2003 total road length increased from 196,877 to 251,845 kilometers, and highways increased, from 104,001 to 151,028 kilometers. The total number of registered motor vehicles also increased from 3.5 million to 5.2 million, including 2.5 million motorcycles, 1.3 million automobiles, and 178,000 trucks. In the early 1990s, the government announced plans to shift passenger and freight traffic from roads to rail, but by 2004 the declining quality and quantity of rail service continued to prompt increases in private and commercial use of roads.

Both the quality and quantity of government-funded rail and bus service have declined, and in some cases operations have ceased altogether. As a result, private buses, taxis, autorickshaws, and horse-drawn tongas meet most urban transportation demand. These vehicles are unregulated, and safety issues abound. Various government programs have attempted to improve transportation through highway construction and automobile imports, but these endeavors have been costly, and highway capacity is substantially underutilized. Statistics show an increase in freight and passenger traffic on roads, but the increase is believed to be due to the declining quality of rail service rather than to the increasing affordability of automobiles. Studies cite significant, accompanying problems with vehicular pollution, increasing traffic density, and high numbers of traffic fatalities.

Railroad

The railroad system is government owned and covers 8,775 kilometers. In FY 1992 there were 753 locomotives and 34,851 freight wagons. The system usually runs at a loss. In mid-1992 the most profitable route, that between Lahore and Faisalabad, was privatized. It is expected that the government will attempt to privatize other rail routes, but the LahoreFaisalabad line was renationalized in September 1993 when the private operator failed to make a profit.

One of the largest organizations in the country, the Pakistan Railways is a federal Government Department under Ministry of Railways. Pakistan Railways comprises of Two Functional Units, The operations unit and the Manufacturing and Services Unit. Each headed by a General Manager who is responsible to the Secretary/ Chairman of Pakistan Railways for the performance of his unit.

The railroad system is publicly owned, but government funding has been insufficient to maintain the system. Government figures indicate that operating revenues exceeded operating expenses from FY 1994 to FY 2003, but the deterioration in the quantity and quality of service suggests that major problems persist. From 1994 to 2003, the quantity of track kilometers fell from 8,775 to 7,791 kilometers, and route kilometers dropped from 12,625 to 11,515 kilometers. Of the track kilometers, 7,346 kilometers were 1.676-millimeter gauge, and 445 kilometers were 1.000-millimeter gauge. Passenger journeys peaked at 85 million in FY 1989 and declined until FY 1999, after which they increased to 72.4 million in FY 2003. Freight tonnage fell from 8 million tons in FY 1994 to 6.2 million tons in FY 2003. In the same period, the number of locomotives decreased from 676 to 577, and the quantity of coaches fell from 2,831 to 1,843.

Since 1992, various privatization ventures have been terminated and placed back on the market, and the federal government has attempted to transfer responsibility for some rail services to local and provincial authorities. Urban and suburban passenger rail service is often irregular and slower than road transport, but the government plans to build passenger rail systems in Karachi, Lahore, Islamabad, and Rawalpindi. A proposed rail line connecting Pakistan with Iran has been stalled because of a lack of funding.

Shipping

Shipping capacity decreased in the 1980s. The merchant fleet, almost all operated by the Pakistan National Shipping Corporation (PNSC), consisted in 1992 of twenty-two vessels, down from fifty vessels in 1982. Approximately half the fleet is more than fifteen years old and is unsuited to present needs. The PNSC handled 2.74 million tons of cargo in the last six months of 1991, compared with 2.77 million tons during the corresponding period in 1990. In 1992, in line with its privatization policy, the government invited applications for setting up a private shipping sector and promised to operate the PNSC on a commercial basis.

There are two international ports--Karachi and Port Muhammad bin Qasim. In the early 1990s, Karachi handled the bulk of the traffic. During the nine months ending in March 1992, Karachi handled 14.7 million tons of cargo, of which 11.0 million tons were imports and 3.7 million tons exports. This was 4.2 percent more cargo than was handled during the corresponding period of 1990-91. Port Qasim, which is fifty-three kilometers south of Karachi, handled 5.8 million tons of cargo in the first nine months of FY 1992.

According to government statistics, the tonnage handled by ports increased from 30 million tons in FY 1994 to 41.2 million tons in FY 2003. In the same period, the number of twenty-foot-equivalent-units (TEUs) increased from 409,670 to 615,826. In 2004 Pakistan had two ports, Karachi and Port Qasim, both of which were upgraded in the 1990s. Karachi handles approximately 60 percent of import and export cargo and is linked by a daily container train to an inland terminal at Lahore. Port Qasim handles about 40 percent of import and export cargo. The first phase of a multipurpose port located at Gwadar on the Balochistan coast was expected to be operational in early 2005, with a second phase still under construction. A deepwater port at Keti Bandar, 100 kilometers southeast of Karachi, is planned as part of a private power project.

Inland water transport basically has been nonexistent since the nineteenth century, although there have been government proposals to change this situation. Bridges, irrigation systems, and seasonal changes in water availability limit tremendously the navigability of former inland waterways, particularly the Indus River system. There is small-scale use between Sukkur and Kalabagh on the Indus River, and Pakistani government and transportation analysts have considered inland water routes linking Port Qasim with points on the Indus. However, the technical feasibility of these proposals is doubtful, and high capital costs limit their economic feasibility.

Civil Air Transport

In early 1994, the major airline was the government-controlled Pakistan International Airlines (PIA). PIA had a fleet of forty-seven aircraft in March 1993, of which fifteen were wide-bodied Boeing 747s and A300-B4s. The PIA network includes forty-five international and thirty-five domestic airports. There are international airports at Karachi, Islamabad, Lahore, Peshawar, and Quetta. Several small private airlines began operating domestic routes in 1993. One of these carriers, Shaheen Air International, also operated international cargo routes.

Since the 1980s, the air network has expanded. Pakistan has 50 airports with permanently surfaced runways. Karachi, Lahore, Peshawar, Quetta, and Rawalpindi handle both international passenger and cargo flights, and Multan and Turbat handle international cargo. The airports in Karachi and Lahore have expanded their facilities since 1994. From FY 1994 to FY 2003, international passengers increased from 4.1 million to 5.1 million, and international cargo increased slightly from 1.1 million tons to 1.2 million tons. In the same time period, however, domestic passengers declined from 9.1 million to 5.5 million, and domestic cargo fell from 243,000 tons to 187,000 tons. The major international airline is government-owned Pakistan International Airlines, and four other private airlines offer international passenger and cargo services. Pakistan International Airlines flights to New Delhi beginning in January 2004 have been viewed as a sign of improved relations between India and Pakistan.

Telecommunications

From 1991 to 2002, the estimated number of radios increased only slightly from 10 to 10.2 million, and the estimated number of televisions was unchanged at 2.1 million. The government runs both Azad Kashmir Radio, with three stations, and Pakistan Broadcasting Corporation, with 35 stations. Three private radio stations also are in operation. Government-run Pakistan Television Corporation maintains four domestic television channels, and there are three private television broadcasters. Foreign channels are available by satellite and cable. Domestic phone service is poor. In the early 2000s, Pakistan had approximately 3.7 million telephones, 8 million cellular telephones, 600,000 personal computers, and 500,000 Internet users.