Federal government is preparing for 'Ports Master Plan' under Second Trade and Transport Facilitation Project-2 (TTFP-2) along with the preparation of an implementation strategy for trucking policy, including piloting implementation of the policy, with the co-operation of World Bank (WB) and Asian Development Bank (ADB).
According to World Bank Project report, High port costs and high port profits, resulting in higher charges to users than might be considered as desirable in terms of overall economic policy, increasing openness to the world economy and stimulating trade. Long dwell times for inbound containers, resulting in congested terminals and the need to construct additional facilities.
WB report revealed that a fragmented approach towards trade facilitation with improvements to be made in the National Trade and Transport Facilitation Committee (NTTFC), the public-private forum on trade facilitation issues.
A weak and relatively under-developed freight forwarding/logistics sector, which has yet to provide the breadth of services and levels of vertical integration, which are increasingly found elsewhere.
WB report suggested that a railway system with the haul distances and engineering standards which should provide the potential for rail to take a substantial share of the long distance freight market but carries insignificant levels of freight traffic and has been largely abandoned by the private sector.
A main road infrastructure, which requires major investment to provide the accessibility, capacity and quality required for rapid and reliable road services. A trucking sector, operating old and technologically outdated trucks, which offers low freight rates but long transit times and unreliable service quality unless shippers are prepared to introduce additional and costly measures. Import regulations and tariff structures that inhibit the modernisation of the trucking fleet. A trucking sector which has low private costs but high external costs in terms of vehicle overloading, leading to road damage and high accident rates, and congestion, WB report added.
According to WB report, the National Trade Corridor (NTC) components includes studies and technical assistance, which will underpin the reforms and investments in support of NTCIP in each sub-sector: Ports, Railways, Road Freight Industry, Highways, Air Transport, Energy Logistics, and other Transport Logistics.
WB report stated that the ongoing project will help update annual rolling five-year business plans for the various sectors involved in NTCIP and consolidate in one single NTCIP business plan that will provide the sectoral objectives, performance indicators and financial resources required to achieve the objectives. The project will also provide support to targeted industries to improve their in-house logistics. This has been estimated to generate ten times the benefits expected from reforms and improved efficiencies in the public transport and logistics sector.
The required support is being defined in an on-going study carried out by IFC. The project will continue support started under an Australian Aid grant for non-lending technical assistance to build a monitoring and evaluation framework of NTCIP and a decision support system for reforms and investment in the Planning Commission.
A fourth logistics costs study will be carried out at end of project to evaluate progress since the similar studies in 1996, 2000 and 2006. WB report revealed that activities already identified for the subsequent years, including definition and support to implementation of a strategy to improve governance and increase implementation capacity in the construction industry, (additional activities to be defined at appraisal).
This project will also support multi-modal poverty and social impact assessments to implement the recommendations of the Strategic Environmental, Poverty and Social Assessment (SEPSA) that is being carried out.
The component will also provide the resources necessary to strengthen the capacity of the relevant sector ministries to manage environment, poverty related issues.
Additional activities during the subsequent years will be defined by annual need assessments. This may include development of public-private partnership in the transport sector as well as feasibility of investments as identified in the business plans. A media and communication program will be carried out to promote public understanding of the NTCIP, report added.
According to a project study of World Bank, the proposed operation for Trade and Transport Facilitation Project (TTFP) is fully consistent with the strategic objective of the FY 06-09 Country Assistance Strategy (CAS) to remove infrastructure bottlenecks, support sustained economic growth and improve competitiveness.
The CAS identifies the need for significant investment in Pakistan's infrastructure, in particular for the modernisation of the National Trade Corridor, to support Pakistan's growth and service delivery goals. The second Poverty Reduction Strategy Paper (PRSP) under preparation by the government of Pakistan for the period 2009-2011 is based on ten pillars with pillar 7 "Removing Infrastructure bottlenecks through Public-Private Partnerships" providing the objective to which the transport sector is expected to contribute. The PRSP confirms the importance that the government gives to NTCIP as a key program to achieve this objective, WB report added.
WB report disclosed that NTCIP as "Medium Term Transport Master Plan" for Pakistan provides the basis for donor engagement in the sector and is supported by the donor community.
ADB will be a strong partner for the implementation of NTCIP. The financing plan for the highway component of NTCIP envisages that ADB's contribution will amount to $1.1 billion, about 30 per cent of the total cost of the component. ADB is also presently funding in the following sectors, including (a) the Port Management Unit in the Ministry of Ports and Shipping; (b) technical assistance to prepare a framework for Public Private Partnership (PPP) in infrastructure; (c) technical assistance to prepare a trucking strategy which will become integral part of the overall strategy for NTCIP; and (d) technical assistance to prepare a new transport sector policy. Meanwhile, the Japan Bank for International Co-operation (JBIC) is expected to co-finance with ADB one section of the highway component of NTCIP. The exact contribution from each donor has not yet been defined, report admitted.