Tuesday, July 24, 2012
By Saif Asif Khan
Last month, Pakistan participated in a meeting of the railway authorities of the Economic Cooperation Organisation countries in Ankara. The ensuing discussions and resulting press release have made it evident that the original Registered Community Design member countries, Pakistan, Iran and Turkey, plan to bolster their rail links in the coming few months, with the Islamabad-Istanbul cargo service to be hopefully recommenced shortly. Pakistan's business community participated wholeheartedly in the meeting; with a clear mandate that in order to elicit interest from the private sector, the service needed to be regular and punctual.
I believe that from the point of view of Pakistan, there were two very significant outcomes from this meeting. Firstly, the meeting illustrated the resolve at both the government and private levels to develop rail transport within the ECO block as a viable form of transport, which also reflects the present government's prioritisation of better trade linkages with Central Asia and the Greater Middle East region, so to say. This is a most certainly a positive development, given both the saturation and financial turmoil currently facing Pakistan in its more traditional markets in the West. Secondly, the meeting made Pakistan even more painfully aware of its poor state of rail infrastructure. Indeed, the participants noted that the current running time of the Gül Train, which is a cargo train connecting Islamabad with Istanbul via Tehran, was the longest in Pakistan (10 days). This has extended the train's total running time to an unattractive 18 days (4 days each in Iran and Turkey). Pakistan was asked to curtail the running time the train spent while traversing its territory.
However, there is an elephant in the room, which no one appears to notice. With all the talk about enhancing trade with India over the past one-and-a-half years, our policymakers are surprisingly lethargic when it comes to the issue of improving Pakistan's rail connectivity with India, located in our immediate neighbourhood. While the spillover effects from this would be enormous (think about the teeming hundreds who use the dilapidated rail wagons to visit their loved ones and holy sites in both the countries every year), let us talk about this proposal from a pure business point of view.
The existing setup: At present, two provinces of Pakistan's territory with rail networks share borders with India: Sindh and Punjab.
The Thar Express plies the tracks linking Sindh with Rajasthan. Besides being a service that is marred by severe delays and inefficiency, the tragedy is that it is utterly useless to businessmen. No cargo trains are allowed on this route, even though a considerable amount was spent by the Government on widening the track gauge prior to the reopening of the route in 2006. Opening up this route would greatly serve the interests of businesses based in Sindh, which trade with Maharashtra and Gujarat, and are presently using the Mumbai-Karachi sea route. The business community has asserted that this route will save considerable money now being paid as ocean freight to shipping lines, which take almost ten days for loading and unloading; while trains would allow cargo to reach dry ports within a period of 24 hours at much lower handling cost.
For instance, according to a 2006 study supported by the World Bank, it costs $550 to ship a 20 ft container from Mumbai to Karachi. On the other hand, a comparable container sent through the Delhi-Wagah route costs an Indian trader just $325. The distance between Delhi and Wagah (approximately 500 kilometres) is roughly comparable to that between Khokrapar and Ahmadabad (Gujarat). Therefore, we could assume a similar cost involved in using this route for container trains; a clear cost advantage to the business community of both the countries.
The other route, linking the two Punjabs, is of greater use to the business community of both countries in its present state. This is true despite the fact that there are frequent complaints about severe shortages of rolling stock, warehousing facilities, corruption, and general inefficiency at this border. But it is encouraging to hear that over the past one year, both countries have been involved in efforts to revamp the existing setup for trucks at Wagah-Attari, which should alleviate the situation somewhat, by easing the burden on the rail route. According to a study by Indian think-tank ASSOCHAM, the improved border crossing is expected to help bring trade to $8 billion annually, from the existing level of $2.6 billion.
Potential for improvement: While there is obviously plentiful room for improvement in the two routes mentioned above, let us explore the possibility of further rail linkages between India and Pakistan.
Jaisalmer district in Rajasthan is the terminus of a broad gauge track of Indian Railways, which joins with the main system at Jodhpur. Jaisalmer is highly connected to the rest of India by air, road and rail. It is situated 217 km from Pakistan's major rail station Rohri, which is less than the distance between Karachi and Rohri (478 kms). Jaisalmer earns a large share of its income from tourism. On the other hand, Rajasthan state itself is rich in minerals, agricultural produce and industry. In particular, the establishment of a further link between Sindh and Rajasthan would serve the interests of the farming community on both sides, and help in dealing with shortages of food in times of famine and drought, which this region is susceptible to.
Another rail linkage, which could perhaps be explored with Rajasthan is with Anupgarh, which is located right on the border of Rajasthan, and is bounded on the west by Bahawalnagar district of the Pakistani Punjab, and on the north by East Punjab. Anupgarh is the hub of Rajasthan's food grain industry, and is one of the terminals for India's North Western Railway Service. To provide some perspective, keep in mind that Anupgarh is located no more than 200 kms from Multan.
If we were to move outside of Rajasthan to East Punjab, we would notice that there are some railway terminals that could almost readily be of use to us besides the Wagah-Attari terminus. Consider for instance Firozpur, which is serves as a Railway Divisional Headquarters for Indian Railways, and has easy access by road and rail to other cities such as Amritsar, Ludhiana, Jullundur, Delhi, and Chandigarh. Incidentally, until 1970, the Ganda Singh Wala-Hussainiwala route, which opens into Firozpur district of India, functioned as a conduit for the trade of fruits and food products between Pakistan and India. There is also a disused railway track, which presumably used to connect the two countries. In 2005, there were proposals to reopen the border; while there has also been indication of interest from Pakistan's business community to open this border during the recent thaw in Indo-Pak ties, but it remains closed to date (This crossing is just located at a drive of 45 minutes from Lahore).
History also tells us that there is another previously used route, which can be reinvigorated with some effort. The Indian rail terminal of Fazilka was connected by rail tracks to Mandi Sadiqganj on the route to Bahawalnagar, and then to Bahawalpur. The distance between Fazilka and Mandi Sadiqganj is approximately 150 kms. Before partition of the subcontinent, this rail line was of great importance for connecting Delhi with Karachi via Bhatinda. It may be kept in mind that Bhatinda is one of the largest railway junctions in India, with no less than six rail routes extending from it. Major industries in Bhatinda include fertilizers, energy petrochemicals, textiles, citrus fruits and sugar. All of these should be of interest to Pakistani industrialists.
In particular, according to the Hindustan Petroleum Corporation the Bhatinda oil refinery could become an important gateway to Pakistan for the supply of petroleum products from India and potentially naphtha from Pakistan, if relations between the two neighbors improve further in coming times. In this scenario, then, a working rail link between Bhatinda and Pakistan would be of great benefit to Pakistan.
Finally, I would like to identify Malout, which is located at a distance of only 45 kms from Pakistan, and used to lie on the erstwhile Bhatinda-Karachi line. Malout is famous in India for its agricultural equipment manufacturing industry; an area in which Pakistan is quite weak. Another major industry in the region is related to high cotton cultivation in the region. Since the past few years, cotton-related business has been booming in the region. It is worth mentioning here that the market for second-hand cars and two-wheelers in Malout has also grown to become one of the biggest in the region. All of these represent potential opportunities for Pakistan.
In conclusion, Pakistan stands much to gain from better rail connectivity with India, if we go by the rail terminals that I have identified above. If we look at the broader picture, India already maintains vigorous rail links with Bangladesh and Nepal, is working on building a track to Myanmar, and is studying the possibility of linkage with China. Conversely, Pakistan seems to lag far behind in this respect despite of the available endless opportunities; some of which have been highlighted above. In this regard, the private sector in Pakistan must step forward, given the present difficulties being faced by Pakistan Railways, and assume a leading role, because they are the ones who stand to gain the most.
at 9:33 AM