NTCIP - Keynote Presentation by Planning Commission

Transit & Trade Corridor

Pakistan Trade & Transit Facilitation

Regional

NTCIP represents Pakistan's ambitious and extensive trade, transport and transit facilitation programme. The NTCIP objectives range from automation of port clearance systems, to reducing cargo dwell time, to building new infrastructure, to increasing overall efficiencies in each segment of its port and border management.

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NTCIP - Pakistan’s Vision 2030

Dr Asad Ali Shah, Member Planning Commission, Pakistan

A.            NTCIP IS GEARED TOWARDS DEVELOPING -

1.            industrialized, just and prosperous Pakistan through rapid and sustainable development in a resource constrained economy by deploying knowledge inputs “

2.            improving competitiveness of Pakistani trade internationally by -

(a)          enhancing Pakistan’s share of world trade (currently only 0.2%)

(b)          increasing Pakistan’s exports to US$ 200–250 billion by 2030

3.            establishing an efficient and well integrated transport system that will facilitate the development of a competitive economy

4.            reducing transport costs and enhance affordability

5.            ensuring safety in mobility

6.            enhancing regional connectivity

B.            NATIONAL TRADE CORRIDOR (NTC)

Development of multi-modal links to -

1.            Central Asian States

2.            Afghanistan

3.            Iran

4.            China

5.            India

C.            PAKISTAN’S TOTAL TRADE (By Volume)

(billion ton-km)

1.            Total Present Land Trade (Demand) 123

2.            Total North South Corridor Trade (80%) 100

3.            Present N-S System Capacity 136

4.            Total Projected Trade on NTC by 2010 138

5.            Total Projected Trade on NTC by 2012

6.            Under the NTC Improvement Program, the NTC capacity would be increased to 204 btk by 2012

D.            National Targets

Year

Railways

Roads

Air Transport

 

Passenger (Billion Pass.Km)

Freight (Billion Ton-Km)

Passenger (Billion Pass.Km)

Freight (Billion Ton-Km)

Passenger (Billion Pass.Km)

Freight (Billion Ton-Km)

2006-07

27

6

251

126

28

0.30

2007-08

29

8

271

135

30

0.33

2008-09

31

11

293

145

32

0.35

2009-10

34

14

316

155

34

0.38

2010-11

36

18

341

166

37

0.41

2011-12

39

23

368

177

39

0.45

ACGR %

12

30

8

7

7

8

E.            EXISTING SITUATION

1.            Container dwell times at ports are 7 days—3 times that of developed countries / East Asia

2.            Road freight (which carries 95 % of land freight) takes 4–6 days between ports and north country—Twice the equivalent time in Europe / East Asia, and there are delays in connectivity

3.            Trucking quality, speed and service are low, obsolete models / non- euro compliant, individual ownership (not an industry)

4.            Rail carries < 5 % of freight and takes from 1–2 days on main line (Khi-Lhr); and upto 16 days (Khi-Quetta) to deliver upcountry—2 to times slower than in China and US

5.            Low performance costing economy 4–6 % of GDP (per annum)

6.            Projected growth will double demand by 2015, and require much higher levels of service

7.            Additionally, passenger demand will need to be simultaneously met

F.            THE EXISTING CAPACITY CANNOT SUPPORT 7–8 % SUSTAINED GROWTH

F.            NTC VISION

1.            Evolve strategic plan to tackle the logistics and business development to contribute to economic growth

2.            Upgrade existing transport infrastructure and create new assets

3.            Create greater synergy between the rural, provincial and federally supported transport infrastructure to reduce cost and increase affordability

4.            Develop broad range of support services such as shipping, freight management, trucking, insurance, and banking

5.            Bring about substantive and qualitative changes to the industrial and services base by better economic mix to promote value addition, job creation and poverty reduction

G.           NTC STRATEGIC THRUST

Rationale:

1.            To gain competitive advantage in the fast globalizing world

2.            Enhance efficiencies and affordability through:

(a)          provision of world class infrastructure,

(b)          efficient logistics chain,

(c)           smooth interface between the public and private sectors,

(d)          better rural-urban connectivity with affordable options

3.            NTC development adopts a

4.            Holistic and Integrated Approach to: Reduce the cost of doing business by improving trade logistics to international standards

H.           NTC STRATEGIC THEMES

1.            Reduce costs and improve affordability

2.            Make ports through-put more efficient (time and cost)

3.            Provide timely rail and road (limited access) connectivity between ports and upcountry

4.            Substantially increase rail’s land freight share and increase rail efficiencies

5.            Modernize trucking fleet and increase fuel efficiency

6.            Modernize Aviation & Air Transport fleet

I.             NTC DEVELOPMENT FOCUSES ON OVERHAULING COMPLETE LOGISTICS SYSTEM

1.            Procedures—legislation, regulation, administration and documentation

2.            Services—shipping and port services, trucking, railways, handling, warehousing, customs, insurance, banking, freight forwarding

3.            Infrastructure—ports, roads, rail, aviation / air transport warehouses / dry-ports, and pipelines–Longer term higher cost investments

4.            The institutional needs and policy measures incorporated within the sectoral programs

J.             WORKING ARRANGMENTS, METHODOLOGY & OUTCOMES

Prime Minister’s Inter-agency NTC Task Force chaired by Deputy Chairman, Planning Commission (PC)

Task Force operating through seven committees, each chaired by the Federal Secretary concerned. NTCIP objectives will be met by authorities concerning -

1.            Ports & Shipping

2.            Trade facilitation

3.            Highways Modernization

4.            Trucking Modernization

5.            Railways Restructuring and Modernization

6.            Aviation and Air Transport Modernization

7.            Energy Logistics

K.            HIGHWAYS MODERNIZATION

1.            Enhance capacity of North-South (N-S) & allied National

2.            Highways

3.            Commercial management of N-S highways and introduction of Intelligent Transport System (starting with electronic tolling)

4.            Segregation between non-motorized / local & motorized traffic and through traffic

5.            Highways modernization can save Pakistan US$ 2 bill annually

L.             TARGETS & TIME LINE FOR HIGHWAYS

1.            Report on Termination of Interventions on National Highways by

2.            Federal/Provincial Agencies Other than NH&MP

3.            Complete Preparatory / Feasibility/Design Work on Highway Projects, which include: E-4; E-5; E-6

4.            Realignment of M-2 at Salt Range & Wazirabad-Pindi Bhattian Link Road

5.            Establish Performance Monitoring Indicators & Benchmarks

6.            Complete Implementation Plan for Limited Access Expressway Treatment of NHA’s Existing Debt Stock & Future Financing Conduct a Thorough Audit of NHA’a Debt

7.            Restructure NHA Board; Co-opted Non-Government Professional Members

8.            Recruit Professionals on Market-Based Packages

9.            Realignment of NHA on Corporate Business Lines under NHA Act

10.          Reduce Fatal Accidents by 50%

11.          Reduce Travel Time from Lahore to Karachi by 50% Reduce Transport Costs by 25%

M.          TRUCKING MODERNIZATION

1.            Make Pakistan regional hub for international trade / facilitate expanding trade volume

2.            Effectively control overloading, environmental externalities and fuels quality

3.            Reduce operating costs, achieve fuel efficiency & save road assets

4.            Replace obsolete 2-axle and 3-axle rigid trucks

5.            Encourage introduction of modern prime movers / multi- axle, euro standard trucks by rationalizing import tariffs

6.            Incentivize fleet operations–declare trucking as an industry

7.            Replace ineffective MVE System

8.            Revise National Truck Specifications and mainstream roadside assembly / conversion / modification accordingly

N.           TARGETS AND TIME LINE FOR TRUCKING

1.            Rationalize Truck Import Tariffs

2.            Allow Import of Trailers that are No Older than 5 years

3.            Achieve EU Compliance

4.            Establish Performance Monitoring Indicators & Benchmarks

5.            Agree on TIR Implementation Modalities

6.            Provinces Revamp MVT Registration, Inspection Systems

7.            Enforce Axle Load Control Plan Launch Truck Financing Scheme Establish Truck Driver Training Facility Reform Truckers Association

8.            Increase Number of Formal Truck Operators by 25%

9.            De-link and “corporatize” National Logistics Cell’s Trucking Unit to Lead Trucking

10.          Modernization

11.          Revise National Truck Specs for 2, 3, and Multi-Axle Prime Movers

12.          Complete 1/4th Trucking Facilities along the National Highway Corridor Further Rationalize Truck Import Tariffs to Increase Prime-Mover Trailer Combination in Long-Haul Freight by 50%

13.          Overloading of Trucks Reduced to Below 15% (currently at 43%)

O.           RAILWAY RESTRUCTURING & MODERNIZATION

1.            Create a PR Freight Business Unit with dedicated locos and rolling stock

2.            Create a commercial rail environment eliminating cross subsidies

3.            Introduce private sector management and financing in rail freight sector

4.            Ensure Fast Track Access for PR’ freight business to reduce travel time for Karachi-Lahore container services to 28 hrs against present 56 hrs

5.            Door to Door service through involvement of private road transport haulers from Railway Stations

6.            Competitive Railways can save Pakistan USD 1.0 billion annually

P.            TARGETS AND TIME LINE FOR RAILWAYS

1.            PR to Select Reform Team from within Pakistan Railways

2.            Increase Daily Freight Express Trains from 1 to 5

3.            CEO Appointed to Lead Pakistan Railways Reform Team

4.            Business Plan Approved and Adopted

5.            Transitional Support Consultants Appointed

6.            Reform Team Prepares Rail Restructuring Plan and Gives Advice on New

7.            Structure of Autonomous Board

8.            Solicit Bids from Private Sector for Investment in Track Access

9.            Link Private Freight Forwarders and Truckers for “Door-to-Door” Services

10.          New FMIS-Based lines of Business

11.          Establish Performance Monitoring Indictors and Benchmarks

12.          Human Resources Audits Completed

13.          Autonomous, Restructured Board Established

14.          PR Corporatization Bill Agreed Upon & Enacted; PRC Established

15.          Separate Holding Company Established for Non-Core Activities & Land Assets

16.          Introduction of Private Sector Management & Investment in Freight Sector

17.          Procurement of Locos and Flatbeds / Wagons

18.          Close Down Loss Making Lines - Strategic Exceptions Receiving Explicit

19.          Subsidies from GoP

20.          PR to Control 30% of All Long-Haul Freight (current is 10%) ‘

Q.           PORTS IMPROVEMENT & MODERNIZATION

1.            Ports to reduce costs, improve logistics, and upgrade the existing infrastructure to enhance Pakistan trade competitiveness

2.            New ports sector master plan & business plan

3.            Berth draft of Karachi Port and Port Qasim to be deepened to attract larger capacity vessels

4.            Reduce free cargo dwell time to 3/4 days

5.            Reduce vessel charges to international norms

6.            Reduce port costs and terminal handling charges

7.            Professional port management

8.            Establish IT Port Community Network

9.            Efficient ports can save Pakistan US$ 450 million annually

10.          Objective

R.            AVIATION & AIR TRANSPORT MODERNIZATION

1.            Develop and improve cargo infrastructure at important airports for meeting delivery needs of a modern global supply chain.

2.            Thrust of Cargo Operations

3.            Unilateral open sky policy

4.            Demand based development of infrastructure

5.            Users charges & fuel prices to be regionally competitive

6.            Bifurcation of regulatory, commercial and operating functions

7.            Liberalization of air service agreements

8.            Encouragement of private sector airlines to operate on international routes 23

S.            TRADE FACILITATION

1.            Modernize / streamline trade & transport logistics practices

2.            Develop trade facilitation strategy

3.            Expedite implementation of Customs Administrative Reforms (CARE)

4.            Develop Freight Forwarding, Insurance, Banking to support trade logistics

5.            Strengthen National Trade & Transport Facilitation Committee

6.            Revamp / modernize other trade organizations (such as FPCCI)

7.            Publicize Trade Facilitation—WTO, SAFTA, ECO

8.            Trade facilitation can save Pakistan US$ 1.3 billion annually

T.            NEXT STEPS

1.            Evolving a new strategic framework for business development along the NTC, with action plans and road shows

(a)          diversified industrial base

(b)          diversified service industry base (warehousing, wholesale and retail) distribution,

(c)           more efficient logistics chain

(d)          development of city clusters

2.            Strengthened trading base

3.            Fully tap the potential savings of over US$ 7 billion resulting from efficiency in private sector logistics (trade to trade and government to trade transactions) by streamlining areas such as warehousing, shipping, inventory control, and efficient administration

4.            Focus on NTC development to enhance affordability and job creation for low income groups and as a vehicle for poverty reduction 26

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