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Freight train plan raises the stakes in economy

Could Pakistan address its economic woes by turning around the freight train system? The answer would be yes in unison if hundreds of thousands of businessmen are asked this question. It is heart wrenching to see the current state of Pakistan’s freight trains which could beef up the economic activities badly needed by the country at this juncture. The World Bank deems railways a significant driver of economic development in the world. Rail transport is very cost effective mode of goods carriage over long and short distances. In fact, rail transport could be an enabler of economic progress in a country. It is staggering to know that over 50 percent of the cargo around the world is hauled by railways whereas it presents a dismal figure of barely 5 percent in Pakistan. This is literally baffling at a time when our country is going through one of the toughest economic times in history since Pakistan has to pay approximately $10 billion every year on average for its debts and liabilities.

Pakistan has lagged behind in terms of rail transport for the reasons unknown. Logistics play a vital role for the economic prosperity of a country, however, this sector seems to have been ignored which should be called a culpable negligence. Globally, it is a $4.3 trillion industry and a sector which generates thousands of jobs and addresses the issues of export competitiveness which are of enormous value in an economy. Pakistan’s dwindling exports for over a decade could also be attributed to supply chain inefficiencies in bringing products, raw materials and finished goods to market. Cost effectiveness is an aorta for the coup of a business. The lower the cost, the higher the profit margins. Railways are considered the most efficient and cost-effective mode of transportation for goods whereas over 90% of inland freight in Pakistan takes place through road networks. This may be one of the reasons for being uncompetitive in the world market.

It was consoling to know way back in 2010 when announcement was made regarding the first freight train between Pakistan, Iran and Turkey. Such steps are trade boosting steps and Pakistan’s exports could soar dramatically provided prudent decisions are made to benefit the country. Last year, the railways ministry decided to start running 15 freight trains between Quetta and Zahedan to meet the demands of the business community. Pakistan-Iran Freight Train Service is a gorgeous opportunity for Pakistan to let its exports blossom, however, Pakistan does not seem to have derived any benefit in terms of boost in its exports to the destined countries. Pakistan’s trade with the regional countries could be termed dismal, however, regional trade is one of the vital sources of economic prosperity in many regions of the world. The Pakistan Railways has been operating international passenger trains namely Samjhota Express, Zahedan Mixed Passenger and Thar Express, however, there is dire need to commence freight train service vehemently.

 

Is the freight transport landscape changing in Pakistan now? It seems as if public-private partnership is going to make its way and amelioration is in the offing in this sector. First-ever dedicated freight train under public-private partnership loaded with 75 cargo containers commenced its services in December last year. Pakistan Railways started the second dedicated freight train service in January this year. There is likelihood of investment worth billions of dollars in running freight trains. The launch of five new freight trains was announced a couple months ago which should be a splendid news for the economic activities within the borders of the country and for the exports as well. It is estimated that the launch of five freight trains would get Pakistan Railways billions of rupees. Investment in infrastructure is of core significance so that the incidents such as horrible derailment of a freight train near Rahim Yar Khan a couple of months ago should not take place. The launch of freight trains could rejuvenate the flagging exports of Pakistan and address the conundrums of twin deficits particularly the current account deficit which has crippled the economy to the hilt. Only export-oriented economies blossom whereas import-oriented economies face perennial quagmires.

Generally freight trains finance the passengers’ trains across the world since freight trains are profit-making sector whereas passenger trains could be loss making entities. It is to be seen in Pakistan whether freight trains could finance passengers’ trains which cater to over 6 million passengers in Pakistan.

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