National trade corridor

Globalisation has unleashed enormous forces; only those countries will survive and prosper which can position themselves for competitive advantage. Accordingly, it would be important to improve competitiveness of Pakistani trade internationally.
The Government is examining the intensity and nature of present and future competition and the strategies and policies required to enhance Pakistan's share of global trade from the current 0.2% to say 1.0% by 2030. This would imply a fifteen-fold increase in Pakistan's exports from the targeted USD 17 billion in 2006 to around USD 250 billion by 2030.
A pre-requisite would be the establishment of an efficient and well-integrated transport system that will facilitate the development of the competitive economy. There will also be need to enhance regional connectivity, with trade links, and energy, transport and industrial corridors with China, Central Asian Republics, Afghanistan, Iran and India.
A major new initiative of the government is the National Trade Corridor (NTC) development. This programme will not only enhance Pakistan's trade competitiveness but also enhance regional trade and co-operation. The NTC development is aimed at providing fast connectivity along the north-south axis of the country from Karachi to Torkham as well as linkages with the east-west axis. The NTC is being linked with Gawadar and through KKH to the border with China.
The north-south corridor trade is currently carrying about 80 percent of Pakistan's total trade by volume or about 100 billion ton-km (btk). It is anticipated that trade on this axis will grow at between 8-10 % per annum and double to 200 btk by the year 2015. The improvement programme for NTC is being developed accordingly to cater to this trade.
Currently many problems are adversely impacting on trade competitiveness. First, the container dwell times at ports are about three times that of developed countries and East Asia. Second, road freight, the predominant mode of land freight, takes 4 to 6 days between ports and north of country, twice the equivalent time in Europe and East Asia.
Third, trucking rates for high value commodity traders are high. Fourth, rail freight is 2 to 3 times slower than in China and USA. Finally, trade facilitation measures need substantial improvements. Cumulatively, this low performance is costing the economy between 4 to 6% of GDP per annum. The existing capacity cannot support the envisaged 7 to 8% long-term growth.
The NTC development adopts a holistic and integrated approach to reduce the cost of doing business by improving trade logistics to international standards. Efficiencies are to be enhanced through provision of world-class infrastructure, an efficient logistics chain and smooth interface between the public and private sectors.
The NTC strategic thrust has been evolved through an extensive consultation and consensus building process. It includes reducing procedural cost and time, making ports through-put more efficient, providing timely rail and road connectivity between ports and upcountry, substantially increasing rail's land fright share and efficiencies, modernising trucking fleet together with an increase in fuel efficiency, and modernising aviation and air transport fleet. A feature of NTC development is that is focuses on overhauling the complete logistics system.
First it covers procedures such as legislation, regulation, administration and documentation. Second, services such as shipping and port services, trucking, railways, handling, warehousing, customs, insurance, banking and fright forwarding. Third, it adopts an integrated approach for the development of all trade related infrastructure including ports, roads, rail, air transport, warehouses and pipelines. The institutional needs and policy measures have been incorporated with in the sectoral programmes.
Under the first phase of the programme, investments are estimated at USD 6 billion over the next 5 to 6 years. These investments would be sequenced strategically, with kick-start through high priority projects. The financing options would cover public-private sector co-ordination modalities and a framework for leveraging private sector funds to incentivize private investments. Road shows are planned for investors as marketing events. The targets and timelines for each of the sectors covered under NTC development programme have been prepared for implementation during 2006-2010.
The NTC development is an important component of the Annual Plan / PSDP for 2006-2007, with major investments in ports, highways and railways. In the ports sector, a master plan study defining the roles of Karachi Port, Port Qasim and Gawadar is to be undertaken and business plans for the three ports completed. Work will continue on deepening of the Gawadar Port. The ports programme also includes commencement of the programme for the corporatization of the ports, reduction of port charges and dredging to accommodate larger ships. Comprehensive programmes are envisaged to reduce port dwell time, streamline customs clearance and ports storage, increase efficiency of dry ports, and other trade facilitation measures.
The highways modernisation will involve capacity enhancement of motorways and expressways, commercial management, and segregation between non-motorised and motorised traffic and through traffic. The major activities to be undertaken by NHA during 2006-2007 include the rehabilitation and dualization of the National Highway (N-5), Islamabad-Peshawar Motorway (M-1), Karachi Northern Bypass and Lyari Expressway. The trucking modernisation programme is being developed to control overloading, reduce operating costs, achieve fuel efficiency, replace obsolete trucks and encourages production of modern prime movers.
The railway restructuring and modernisation is envisaged to create a commercial rail environment, introduce private sector management and financing in rail freight sector, ensure fast track access and reduce travel time and provide door to door service through involvement of private road transports haulers from railway stations. The 2006-2007 programme includes track rehabilitation, procurement of locos, coaches and high capacity wagons, and construction of railway line and container terminal at Gwadar. Finally, development of aviation and air transport sector is envisaged to improve cargo infrastructure at important airports for meeting delivery needs of a modern supply chain. The thrust of cargo operations is on open sky policy, demand-based development of infrastructure, liberalisation of air services agreements and encouragement of private sector airlines to operate on international routes.
The NTC development is being carried out under the direct leadership of the Prime Minister, with a Taskforce chaired the Deputy Chairman, Planning Commission. The Taskforce is operating through committees on ports and shipping, trade facilitation, highways, trucking, railways, and aviation and air transport, each chaired by the Federal Secretary concerned.
A secretariat has been established in the Planning Commission for inter-sectoral co-ordination, analytical work, performance assessment and impact evaluation. An innovative feature of the NTC improvement programme is the inter-sectoral teamwork and need-based proposals evolved through close cooperations with development partners such as the World Bank, the Asian Development Bank and the Japan Bank for International Co-operation (JBIC), under the overall co-ordination of the Planning Commission. Action plans for each thematic area have already been prepared. These would be refined into world-class business plans with detailed information to attract investment from the private sector, both domestic and international.