The federal government has attached "high priority" to the development of Transport infrastructure as the prime engine for economic growth and a comprehensive national transport policy will be enforced with the financial and technical assistance of the Asian Development Bank.
Official sources said the strategic investment in infrastructure was necessary for Pakistan to take advantage of the geopolitical situation in the region and benefit from regional opportunities for co-operation in trade and commerce.
The government would have to address four major challenges: (i) lack of an integrated national transport policy to guide the development of sub-sector policies, (ii) poor governance, (iii) weak public institutions, and (iv) the need for targeted investment based on sound economic criteria.
It was pointed out that the total cost of the Transport Sector has been estimated at $14.68 million with the foreign exchange costs and local currency costs estimated at $8.14 million and $6.54 million, respectively.
The ADB undertakes to finance $11.0 million of the transport sector costs, which will cover the foreign exchange costs and $2.86 million of the local currency costs. The government undertakes to finance domestic currency costs amounting to $3.68 million equivalent.
It is worth mentioning that the government made several attempts in the past to articulate a comprehensive transport policy that encompasses all sub-sectors. Under a transport sector development initiative (TSDI) sponsored by the World Bank, major stakeholder consultation involving the public and private sectors and civil society was undertaken through a series of workshops and focal group discussions to elicit views on a transport development strategy.
The findings of TSDI were shared with the Ministry of Communications to help in formulating a national transport policy.
The TSDI recommendations included (i) development of an enabling policy framework that incorporates the perspectives of the three key stakeholders; (ii) establishment of a national transport policy board; (iii) creation of a unified Ministry of Transport that encompasses all sub-sectors; (iv) policy reforms and incentives to encourage the private sector; (v) development of human resources in the sector; and (vi) enforcement of existing legislation on safety standards, environment etc.
The National Transport Research Center (NTRC) under Ministry of communication was assigned the responsibility to use the TSDI findings in developing a comprehensive transport policy.
Due to lack of capacity, NTRC was unable to develop a draft policy document acceptable to the government. The quality of the drafts prepared by the NTRC failed to meet the government's approval.
Accordingly, the government sought the ADB's assistance to help in framing a national transport policy for the country. ADB is currently providing advisory assistance to the government for the preparation of a national transport policy covering road, rail, air, shipping, and ports sub-sectors.
The subproject selection for the transport sector component was prepared together with the Planning Commission and the relevant line Ministries (Ministry of Communications, Ministry of Railways, and Ministry of Ports and Shipping), in close co-ordination with the relevant sub-sector agencies, primarily National Highways Authority and Pakistan Railways.
It is expected that the preparation of about four road projects will be covered under the TA loan, primarily the projects included in the ADB lending programme for 2005-2006, and the projects to be initiated in 2007 and 2008. The TA loan may also cover the preparation of a railway project, subject to agreement between the ADB and the government on the development of a reform programme for the sector.
Subject to government request, the TA loan may also accommodate non-ADB projects that are consistent with the government development plan, economically viable, and environmentally and socially sustainable.
The transport sector sub-projects covers the following areas (i) road project preparatory facilities, (ii) railway project preparatory facilities, (iii) model concession and project preparatory facility for a PPP pilot project in NHs, (iv) capacity building for NHA, (v) policy development and capacity building for Pakistan Railways, and (vi) policy development and capacity building for Ministry of Ports.
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