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The Express Tribune

Published Date: Mar 5, 2013

Regional connectivity: railway network linked to prosperity

Pakistan
needs to connect with the South Asian region to spur its economic growth and a
revitalised railway network could be one way to achieve this goal.

This
was the crux of a seminar titled “Regional Connectivity and Economic Growth in
South Asia” organised by the Sustainable Development Policy Institute (SDPI) on
Monday.

“Lack
of connectivity is putting Pakistan’s relevance in South Asia in danger,” SDPI
Deputy Executive Director Dr Vaqar Ahmed said. “The fact that we have become a
(closed) border between Central Asia and the Far East is hurting our economic
prospects,” he added.

He
said India is investing in Afghanistan and Iran so it could bypass Pakistan
eventually and improve trade with the Central Asian states.

A
railway network from Wagah to Torkham could be the ultimate trade bridge
between countries of the Southeast Asia and Central Asia, Ahmed said.

Muhammad
Naveed Iftikhar, governance specialist at the Finance Ministry’s Economic
Reforms Unit, cited Pakistan Railways as an example of a public sector
enterprise to make the case for privatisation.

He
said Pakistan Railways owes Rs40 billion to the State Bank of Pakistan as over
draft. It has a labour crisis and does not have enough locomotives. Around 68
per cent of railway infrastructure is in need of maintenance, Ahmed added.

He
said if freight trains start operating again, people will opt for them instead
of trucking because freight trains are faster and cheaper. A significant
portion of the 80,000 railways’ workforce could be utilised if private sector
takes over the rail operations, he said.

The
government will, however, have to chip in with the infrastructure development
initially, he said.

“We
just don’t want to adopt the successful models,” Ahmed said. “If the government
is not in favour of outright privatisation, it should at least make some efforts
to reach out to the private sector.”

He
said the government could have a limited regulatory role and give the
marketing, finance and service delivery side to the private sector.

Ahmed
said he believed the finance ministers in the past have worked toward creating
debt instead of honestly resolving the problems of public sector enterprises.
He admitted that it was a tall claim but said the debt situation helps private
commercial banks who buy the government paper to underwrite the debt. These
banks, he said, were backed by influential people with political connections.