MEDIUM TERM DEVELOPMENT FRAMEWORK

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(No Transcript)
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National Trade Corridor A Strategic
Framework to Sustain National Economic Growth
Presentation to the Prime Minister
by the Prime Ministers Task Force Headed by
Deputy Chairman, Planning Commission 20th
September, 2005
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Strategic Thrust
Prime Ministers Task Force on NTC Development

• A Holistic and Integrated Approach to
• Reduce the cost of doing business by improving
  trade logistics to international standards
• The strategic thrust evolved through an extensive
  consultation and consensus building process with
  all the public and private sector stakeholders.
  It focuses on
• Quick results through policy interventions,
  systemic and procedural improvements, and cutting
  administrative red-tape involving small
  investments
• Longer term higher cost investments and deep
  rooted institutional reforms to ensure
  sustainability
• Pragmatic investment assessment from private
  sector

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Strategic Theme
Prime Ministers Task Force on NTC Development

• Make ports through-put more efficienttime and
  cost
• Provide timely rail and limited access road
  connectivity between ports and upcountry
• Substantially increase rails land freight share
• Increase rail efficiencies while reducing overall
  state subsidies
• Increase fuel efficiency in the NTC
• Modernize trucking fleet
• Reduce procedural costs and time

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Efficiency Gains in Trade Logistics
Prime Ministers Task Force on NTC Development
High
Port/Rail/Road bulky infrastructure investments
Port berths, other investments
Cumulative Benefits
Low
2007
2008
2009
2006
2005
2010
Time Cost
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Ports Karachi Port Port QasimObjective
Enhance ports efficiencies, for reducing cost of
doing business, and saving the national economy
up to Rs.27 billion / year (in 5 years)

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Targeted Outcomes vis-à-vis Existing Situation
Prime Ministers Task Force on NTC Development

• By June 2006
• Reduce port entry charges (15 reduction from
  current KPT charges of USD 30,000 / call)
• By June 2007
• Accommodate larger ships giving economies of size
  (from present maximum of 2000 TEUs to 4500 TEUs)
  resulting in major shipping lines calling at
  Karachi Port Port Qasim
• End double charging of terminal handling charges
  by container terminal operators and lines
  (effectively from USD 54 to USD 27)

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Port Entry (Wet) Charges
Prime Ministers Task Force on NTC Development

• HOW DOES PAKISTAN COMPARE?
• (Comparative Analysis based on container ship of
  approx 3000 TEU)
• US per call
• Karachi 30,000
• Nhava Sheva (India) 26,000
• Yantian (China) 14,000
• Singapore 6,000
• Hong Kong 6,000
• Colombo 5,500
• Jebel Ali 3,100

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Targeted Outcomes vis-à-vis Existing Situation
(contd.)
Prime Ministers Task Force on NTC Development

• By June 2008
• Have free flowing access to national highways and
  rail lines (from presently congested access)
• Provide 24/7 navigation 365 days of the year
  (from present reliance on tide hours)
• By June 2010
• Reduce port entry charges progressively to
  regional average (both for KPT PQA)
• Accommodate even larger ships (8,000 TEUs) at
  both ports

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Ports Plan of Action
Prime Ministers Task Force on NTC Development

• By June 2006
• Close the KDLB (by KPT)
• Update the National Ports Master Plan,
  specifically defining the relative roles of
  Karachi Port, Port Qasim and Gawadar Port (by
  Ministry of Ports Shipping)
• By June 2007
• Reduce port staff by 25-40 (by KPT)
• Streamline container handling charges by phasing
  out double charging (by container terminal
  operators lines)
• During 2008 - 2010
• Deepen channels by 2-3 metres (by KPT PQA)
• Procure tugs and dredgers (by KPT PQA)

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KPT PQA Development Plans
Prime Ministers Task Force on NTC Development

• KPT
• By 2007
• Deepening of Channel from 11.3 m (inner harbor)
  to 14 m (outer approach)
• By 2008
• Replacement/procurement of Floating Craft
• Trailer Suction Hopper Dredger (6,000 m3
  capacity)
• Backhoe Dredger (5 cu. m. bucket)
• 2 No Hopper Barges (1200 m3 capacity)
• 2 No Tug Boats (50 T Bollard Pull)
• Debris Collection Boat and other ancillary crafts
• By 2010
• Reconstruction of Berths/Deepening of Quay Walls
  (14m) for Berths 10 17
• Deep Draft Container Handling Berth at Keamari
  (2 Berths Protection Works dredging to -14.5
  m)
• Development of Cargo Village, Phase I 330
  acres and dredging
• Note Container terminal at Keamari will be
  constructed by the selected private operator

• PQA
• By 2007
• Vessel Traffic Management System (VTMS)
• By 2008
• Deepening of Channel, Outer 17.5 m, Inner
  15.0 m and Reach 13.5 m
• Night Navigation / Fixed Beacons
• By 2009
• Replacement/Procurement of Floating Craft
• 4 No Tug Boats (50-60 T Bollard Pull)
• 2 No Pilot Boats (20 knots)
• Trailer Suction Hopper Dredger (3,000 m3
  capacity)
• Grab Dredger (5 m3 Grab)
• Ancillary Craft and Equipment

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Ports Plan of Action
Prime Ministers Task Force on NTC Development

• By June 2010 Institutional, Financial and
  Procedural Actions
• Induction of port specialists (planners,
  constructors and operators) to be maximized
  (by KPT PQA)
• Corporatize Ports (by Ministry of Ports
  Shipping)
• Overhaul port finances to focus on cost recovery
  rather than profit maximisation, with
  transactions in foreign exchange. Future
  infrastructure development to be accelerated
  based on current savings, operational surpluses
  and development of KPT port real estate (by KPT
  PQA)
• Remove bottlenecks in clearances (working with
  customs) in phaseswith full application of
  paperless transactions for port and customs
  procedures and payments by June 2010 (by
  Customs, KPT, PQA private sector operators)

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Trade FacilitationObjective Facilitate
international trade through systematic
simplification and standardization of procedures
and information flows
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Targeted Outcomes vis-à-vis Existing Situation
Prime Ministers Task Force on NTC Development

• By June 2006
• Port Dwell Time reduced from present 9-11 days to
  5 days
• Customs Clearance Time reduced from 4 days to 2
  days
• Ports storage period reduced from 7-9 days to
  4-5 days
• By June 2008
• Port Dwell Time reduced to 4 days
• Customs Clearance Time reduced to 1 day

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Targeted Outcomes vis-à-vis Existing Situation
(contd..)
Prime Ministers Task Force on NTC Development

• By June 2007
• Trade Facilitation Strategy finalized approved
  (no agreed TF strategy at present)
• By June 2010
• In-land clearance facilities major proportion of
  FCL cargo destined for upcountry cleared at
  destination (presently, very little FCL cargo
  cleared at destination)
• Ports Community IT Network, currently
  non-existent, made fully operational enabling
  complete electronic data interchange
• Pakistan based Freight Forwarders targeted to
  control at least 25 percent of trade logistics
  (presently negligible )
• Exports of perishable goods (fruits, vegetables,
  fish fisheries products) to be at least doubled
  through improvements in the cold chain from
  about USD 300 million to USD 600 million

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Trade Facilitation Plan of Action
Prime Ministers Task Force on NTC Development

• By June 2007
• Reduce Port Dwell Time by advance filing of
  manifests before ships arrival electronic
  customs clearance limited face to face contact
  with customs officials limited physical
  examinations and removal of long stay containers
  from port (by private sector service providers
  Customs).
• Reduce private sector port charges (by shipping
  and freight agents) to adopt transparent pricing
  practices, via agreed code of practice
• Encourage the removal of high receipt and
  delivery charges at container terminals (by
  terminal operators)

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Trade Facilitation Plan of Action (Contd)
Prime Ministers Task Force on NTC Development

• By June 2007 (contd)
• Dry Ports
• Formulation of Standard Operating Procedures for
  Dry Ports (by Dry Ports Association)
• Implementation of CARE at Dry ports (Customs
  Dry Ports)
• Utilization of Customs Direct Delivery System for
  reducing the Seaport dwell time to Dry Port cargo
  to almost zero (Customs Dry Ports)
• Customs Examination of FCL export cargo at
  factory premises (Customs)
• Fast track loading on the ships at the seaports
  of Karachi of export consignments which are
  Customs cleared at Dry Ports (Customs)

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Trade Facilitation Plan of Action (Contd)
Prime Ministers Task Force on NTC Development

• By June 2007 (contd)
• Pakistans Second TF Conference on Dec 8, 2005,
  in Karachi (organized by Ministry of Commerce)
• Customs Reform roll-out to be acceleratedbeginnin
  g with all port container terminals and dry ports
  (by Customs)
• Ports, Port Service Providers, Terminals, Freight
  Forwarders, Shipping Agents/Shipping Lines, and
  Customs to work on Pre- and Post- Clearance time
  reductionsbased on recommendations of Port Dwell
  Time Reduction Committee, GOP (M/o Ports
  Shipping and CBR) to act on removing public
  sector constraints
• By June 2008
• Establish a training institute for freight
  forwarders (by M/o Ports Shipping / Private
  Sector)

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Trade Facilitation Plan of Action (Contd)
Prime Ministers Task Force on NTC Development

• By June 2010
• Design and implement Ports Community Electronic
  Data Interchange (EDI) (by UNCTAD and Ministry of
  Commerce in conjunction with ports and
  stakeholders)
• Role of commercial banks in trade facilitation
  streamlined (NTTFC, M/o Commerce, M/o Finance and
  banks)
• Enhance and improve cold chain infrastructure and
  services (cold storages, export houses,
  refrigerated containers/boats etc.) (by M/o
  Commerce)

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Pakistan RailwaysObjective To reduce the
overall costs of transport to the trade and the
economy

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Targeted Outcomes vis-à-vis Existing Situation
Prime Ministers Task Force on NTC Development

• By June 2006
• PR to be professionally managed by an autonomous
  and restructured Board
• Increase from 1 to 5 daily container freight
  express trains from Karachi to Lahore /
  Faisalabad / Sialkot (24 hrs service under NTC
  program, with rest still taking 72 hrs)
• PR able to deliver a container to customer,
  booked for these express freight trains, within
  an average 48 hrs (presently the process takes
  2-4 weeks on average)
• Port to on-rails waiting time reduced to less
  than a day for these trains (present waiting
  time is around a week)
• PR linked to private Freight Forwarders and
  Truckers for door-to-door service (no such
  service at present)

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Targeted Outcomes vis-à-vis Existing Situation
(contd..)
Prime Ministers Task Force on NTC Development

• By June 2007
• All non-core assets and activities to be
  de-linked from railways and corporatised as
  independent entities
• By June 2010
• PR to control 30 percent of all long-haul freight
  (current 10)
• PR to close down loss making linesstrategic
  exceptions receiving explicit government subsidy

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Pakistan Railways Plan of Action
Prime Ministers Task Force on NTC Development

• By Dec. 2005
• PR to select a Reform Team from within PR
• PR to hire a CEO to lead PR Reform Team
• PR to hire PR transitional assistance consultants
  to support PR Reform Team
• By June 2006
• Reform team to advise on new structure of
  autonomous Railway Board
• GOP to notify new PR Board
• 2007 - 2010
• Gradual and managed restructuring of PR
• Procurement of Locos and Flatbeds/Wagons and
  investments

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TruckingObjective Modernize the trucking
industry to enhance the level of service
available to trade and to reduce overall costs to
economy resulting from overloading, environmental
externalities, and fuel inefficiencies.

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Targeted Outcomes vis-à-vis Existing Situation
Prime Ministers Task Force on NTC Development

• By June 2010
• Share of prime-mover/trailer combination in
  long-haul road freight enhanced to 50 (present
  10)
• Share of formal sector in trucking industry
  increased to 25 (none presently)
• One-fourth truck fleet modernized (less than 5
  at present)
• Completion of one-fourth of trucking facilities
  along the National Highway corridor (none
  exist presently)

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Targeted Outcomes vis-à-vis Existing Situation
(contd.)
Prime Ministers Task Force on NTC Development

• By June 2010
• Diesel with lower sulfur content made available
  in market to enable usage of Euro-spec Turbo
  Diesel Engines (not available presently)
• International Transport Carnet (TIR) to be made
  functional (currently not functional)
• Overloading of trucks to be reduced to below 15
  (from the present 43) overloading-related
  economic losses on roads lowered by Rs.5 billion
  /year

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Trucking Plan of Action
Prime Ministers Task Force on NTC Development

• By June 2007
• Truck import tariffs to be further rationalized
  to enhance the share of tractors / trailers in
  the transport fleet simultaneously encouraging
  local manufacture of products of upgraded
  specifications (by CBR)
• Truck driver training facility to be provided
  (by private sector / NLC/ Association of Road
  Users of Pakistan)
• TIR implementation modalities to be agreed (by
  CBR / Customs and Pakistan Chapter of
  International Chambers of Commerce / Pakistan TIR
  Commission)
• National Logistics Cells Trucking Unit to be
  delinked and corporatized to lead industry
  modernization (by NLC)
• Reform of trucker associations to be carried out
  (by truckers, led by PIFFA, TIR Commission
  Association of Road Users in Pakistan)

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Trucking Plan of Action
Prime Ministers Task Force on NTC Development

• By June 2007 (contd.)
• Provincial Authorities to revamp MVT,
  Registration, Inspection system (by the
  provincial govts.)
• Axle Load Control Plan enforced on national
  highways (by NHA NHMP)
• 2007 - 2010
• Truck Financing Scheme with appropriate
  incentives launched (by GOP, SMEDA, Banks, EDB)
• Revised national truck specs for 2, 3 and
  multi-axle prime-mover/trailer combo agreed
  GVW, engine specs, tires (by GOP, EDB, CBR, NHA,
  ICC, TIR commission)
• Revised Diesel Quality Plan (by Local Refineries
  / Min of Petroleum)

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RoadsObjective To provide an optimal cost,
high speed, safe and reliable North-South
expressway corridor to enhance export
competitiveness and industrialization

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Roads Strategic Thrust
Prime Ministers Task Force on NTC Development

• 2-4 lane Highway / Expressway limited access
  corridorthe future backboneis constructed
  utilizing existing provincial and national
  highways to the extent possible
• N-5the present lifeline of economygradually
  assumes the role of an inter-city urban highway
• Corridor management is introduced operator
  responsible for all services such as e-tolling,
  emergency services, NHMP and recovery
• NHMP assumes full and sole responsibility for
  patrolling national highways for detection of
  traffic and criminal offences (reducing agencies
  intervention to a bare minimum) improving
  traffic flows and travel times/speeds

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Targeted Outcomes vis-à-vis Existing Situation
Prime Ministers Task Force on NTC Development

• By Dec 2005
• Implementation plan to be completed for the
  limited access highway/ expressway corridor
• By Dec 2006
• Preparatory / feasibility / design work on
  highway projects to be completed
• The Government and development partners work as a
  team to complete project preparatory / appraisal
  activities expeditiously

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Targeted Outcomes vis-à-vis Existing Situation
(contd.)
Prime Ministers Task Force on NTC Development

• By June 2008
• Ports connectivity to the highways enhanced,
  ensuring unhindered movement of freight (present
  access facilities congested)
• 2010 - 2015
• 50 reduction in travel time from Karachi port
  to Lahore ( from 2 days to 1 day) Peshawar
  (from 4 days to 2 days)
• 25 lower transport costs (large road freight
  share presently costing economy Rs. 60-90
  billion/yr in extra fuel cost and subsidies on
  diesel, plus Rs.30 billion//yr in additional road
  user costs and a 25 bil Rs/yr contribution to the
  infrastructure deficit)
• 50 reduction in fatal accidents (currently poor
  safety record)

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Road Corridor Development Plan
Prime Ministers Task Force on NTC Development
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Prime Ministers Task Force on NTC Development
The future backbone of Pakistans economy
Khunjrab Pass
Sust
Karimabad
CHINA
Chitral
GILGIT
N-35
Sazin
S-1
Chilas
Drosh
Dasu
Skardu
Dir
Jalkhad
N-15
N-45
Naran
Malakand
Kashmir (Disputed Territory)
Muzaffarabad
Torkham-Peshwar Expressway 46 km
Mansehra
N-75
Torkham
M-1
Nowshera
Murree
PESHAWAR
Parachinar
ISLAMABAD
Rawalpindi
Gujranwala-Pindi Bhattian Expressway 100 km
N-5
Bannu
M-2
GUJRAT
N-55
SIALKOT
WAZIRABAD
Sarai Gambila
GUJRANWALA
SHEIKHUPURA
AFGHANISTAN
DI Khan
M-3
Mughal Kot
Wahgah
Malana
LAHORE
FAISALABAD
Zhob
Faisalabad-Khanewal M-4 Motorway 184 km
N-50
Chamman
Qila Saifullah
Okara
Retra
M-4
Khanewal-Rajanpur M-5 Motorway 300 km
N-70
Sahiwal
Kuchlak
Multan
Loralai
D. G. Khan
QUETTA
INDIA
Khanewal
Muzaaffargarh
N-55
Mastung
Sibi
Nushki
Dadhar
Taftan
Bahawalpur
Rajanpur
Dalbandin
Nok Kundi
Kalat
M-5
N-5
N-65
Nuttal
N-40
Dera Murad Jamali
Surab
M-6
Rahimyar Khan
Rajanpur-Dadu M-6 Motorway 420 km
Jacobabad
Shikarpur
Ratodero
Ubauro
Khuzdar
IRAN
Sukkur
Larkana
Wad
Kakkar
N-25
Kotri Kabir
Dadu
N-5
Moro
Dadu-Hub M-7 Motorway 270 km
Awaran
Sehwan
Bela
Hoshab
M-7
N-55
Turbat
Hala
N-10
Uthal
Gabd
Liari
Hyderabad
Jiwani
Kotri
M-9
Pasni
Gwadar
Ormara
N-5
KARACHI
Thatta
ARABIAN SEA
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Prime Ministers Task Force on NTC Development
Alternate Route
Khunjrab Pass
Sust
Karimabad
CHINA
Chitral
GILGIT
N-35
Sazin
S-1
Chilas
Drosh
Dasu
Skardu
Dir
Jalkhad
N-15
N-45
Naran
Malakand
Kashmir (Disputed Territory)
Muzaffarabad
Torkham-Peshwar Expressway 46 km
Mansehra
N-75
Torkham
M-1
Nowshera
Murree
PESHAWAR
Parachinar
ISLAMABAD
Rawalpindi
N-5
Bannu
M-2
GUJRAT
N-55
SIALKOT
WAZIRABAD
Faisalabad-Atharahazari-Muzafargarh- D.G. Khan
Motorway 380 km
Sarai Gambila
GUJRANWALA
SHEIKHUPURA
AFGHANISTAN
DI Khan
M-3
Mughal Kot
Wahgah
Malana
LAHORE
FAISALABAD
Zhob
Gujranwala-Pindi Bhattian Expressway 100 km
N-50
Chamman
Qila Saifullah
Okara
Retra
M-4
Rajanpr - Dadu Motorway 420 km
N-70
Sahiwal
Kuchlak
Multan
Loralai
D. G. Khan
QUETTA
INDIA
Khanewal
Muzaaffargarh
N-55
Mastung
Sibi
Nushki
Dadhar
Taftan
Bahawalpur
Rajanpur
Dalbandin
Nok Kundi
Kalat
M-5
N-5
N-65
Nuttal
N-40
Dera Murad Jamali
Surab
M-6
Rahimyar Khan
D.G. Khan-Rajanpur Motorway 114 km
Jacobabad
Shikarpur
Ratodero
Ubauro
Khuzdar
IRAN
Sukkur
Larkana
Wad
Kakkar
N-25
Kotri Kabir
Dadu
N-5
Moro
Dadu-Hub M-7 Motorway 270 km
Awaran
Sehwan
Bela
Hoshab
M-7
N-55
Turbat
Hala
N-10
Uthal
Gabd
Liari
Hyderabad
Jiwani
Kotri
M-9
Pasni
Gwadar
Ormara
N-5
KARACHI
Thatta
ARABIAN SEA
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Overall Cost Implications of NTC Development
Prime Ministers Task Force on NTC Development

• To accelerate the development of NTC as desired
  by PM, the share of the transport sector in the
  PSDP would have to be enhanced. This adjustment
  would be possible within the overall resource
  envelope of MTDF.

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Conclusions and Recommendations
Prime Ministers Task Force on NTC Development

• Change Drivers
• Trade Facilitation
• Full automation of Customs Procedures and
  Minimization of physical examinations (scanners)
  and personal contact
• Approval and implementation of a Trade
  Facilitation Strategy
• Ports
• Closure of KLDB
• Corporatization of Ports
• Railways
• Dynamic professional CEO leading a reform team
  from within PR
• Autonomous PR Board

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Conclusions and Recommendations (Contd)
Prime Ministers Task Force on NTC Development

• Trucking
• Tariff rationalization for larger share of
  tractors / trailers
• Provincial Authorities to revamp MVT and
  Registration/ Inspection system
• TIR implementation to increase market size

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Conclusions and Recommendations (Contd)
Prime Ministers Task Force on NTC Development

• Roads
• Permission to move summary to Cabinet / ECC on
  the following
• Realigning NHA on corporate business lines under
  the NHA Act, with the NHA Board exercising full
  powers as provided in the Act
• Restructuring the NHA Board by inducting two
  Private Sector Members
• Inducting more professionals in NHA at market
  salaries
• Waiving off interest and rescheduling principal
  amount repayment to 2015 2040 in equal annual
  installments
• Converting NHAs PSDP allocations as grant
  transfers to a road development fund

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Conclusions and Recommendations (Contd)
Prime Ministers Task Force on NTC Development

• Recommendations
• Endorsement of the Strategic Framework for NTC
  Development, including
• Operational Targets agreed with the agencies
• Overall Change Drivers
• Reform Measures identified
• Institutionalization of Prime Ministers Task
  Force for continued planning and preparation of
  the NTC schemes and their coordinated
  implementation
• The Prime Minister to kindly lead the overall
  reform process with coordination, monitoring and
  submission of quarterly reports to the Prime
  Minister by the Planning Commission.

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THANK YOU