Econimics Term Paper

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A Macro Economic Perspective

A short over-view to the Government Corporations and other segments in the Transport Sector of Pakistan including the M2 Motorway, the Railways, Pakistan International Airlines Corporation and Pakistan National Shipping Corporation.


Different Segments of the Transport Sector of Pakistan

Land Transport including the Railways

Shipping Sector

Aviation Sector

Ports and Shipping

Roads and Highways

Karachi Mass Transit Program

M2 Motorway-Lahore to Islamabad

Pakistan National Shipping Corporation

Pakistan International Airlines Corporation

Pakistan Railways

National Tanker Company




Pakistan is standing at the cross roads of the 21st Century. The new millenium is just round the corner and every country in the this part of the world is competing for fewer and fewer resources to make the lives of its country men better and better.

When it comes to the economy of Pakistan, it is in its shambles at the present moment. There is hardly any investment in the private sector and a complete absence in the public sector due to the past experiences of the governments in running the large corporations of the country in related or not related to the transport or infrastructure of the country.

Perhaps the best example of these corporations would be Pakistan International Airlines, Pakistan Railways and the Pakistan National Shipping Corporation; all of these corporations reading like a "who is who" of the transport sector of the country.

The time has now come that there is a point of no return prevalent in this sector of the economy. That is the reason that the present government has taken concrete steps in order to over come the difficulties been faced by the employees as well as the clients who are served by these airlines. The major restructuring steps includes laying off considerable surplus staff, better management of resources and the abolition of different perks and preferences given to the senior management of these corporations.

Otherwise, the government has embarked on a brisk plan to improve the transport infrastructure of the country which is visible in Karachi and other parts of the nation. The Pakistan Motorway built with the help of the private sector is a testament to the fact. The new roads, fly-overs and mass transit plans in Karachi also speak volumes that things are finally been given notice. The port of Gwadar is also going to be developed into a full-fledged container terminal in-order to provide a third alternative to the ports of Karachi and Bin Qasim. Even in these two locations, i.e. Karachi and Bin Qasim, the facilities are being improved to accommodate the increasing volumes of international trade and container terminals, oil installations and petroleum refineries are all being introduced to stay ahead with the times.

Different Segments of the

Transport Sector of Pakistan

As in all countries of the world, the transport sector in Pakistan is also diversified into different modes and segments. These transport routes, modes and fields span the length and breath of the nation and provide the infrastructure to accommodate the international trade obligations of the country.

These segments include:

h Shipping Sector including ports

h Aviation Sector

h Land Transport including the Railways

Shipping Sector including Ports:

Pakistan has a relatively small shipping sector with only one company in the lead and that also one of the state run corporations like Pakistan National Shipping Corporation. Other smaller companies like Tri-Star Shipping Lines, Cowasjee and Sons, etc. have a relatively small share of the market and can in no way play an international role like the famous shipping companies of Singapore, Greece and Hong-Kong. The ports are also small in number, bearing in mind the fact that the Ports of Pakistan serve the western regions of China, the whole of Afghanistan and Azad Kashmir.

The two ports at Karachi and Bin Qasim have a combined handling capacity of 30 million tonnes of cargo. There are plans to complete the Port of Gwadar and use its resources as a fishing harbor as well as a mini port, nonetheless like with all other things, the port has been substantially delayed and the business sector awaits its completion so that the provinces of Baluchistan's resources are utilized fully and this would also give a boost to the regional economy of the province.

Aviation Sector including Airports:

The aviation sector of Pakistan is also in its infancy at the present moment. The government had de-regulated the sector only as recently as 1993. This is when new airlines started their operations and have been in operations ever since. But this has not been necessarily true. Many have closed down soon after they started their operations due to their own financial policies and too many airlines fighting for too few passengers.

Secondly, the Civil Aviation Authority which was formed as an autonomous body of the Government has been running 50 airports in the country ever since its inception. Out of these 50 airports, only 3 of them are profitable and the rest are all sustained by the Authority from the revenues which are generated from the 3 profitable airports. Not surprisingly, the 3 airports are located in the 3 metropolitan areas of Pakistan, namely Karachi, Lahore and Islamabad and all of them are international with international flights arriving and departing from their premises as well as the presence of international carriers other than the National Flag Carrier, Pakistan International Airlines.

The only large international Airline owned by the Government of Pakistan is Pakistan International Airlines and it has a significant presence in all the major cities of the world. Again, not surprisingly, the airline is occurring heavy losses due to mismanagement, over staffing, poor service and poor quality of the staff in general. PIA has a significant share in the Pakistani Market but the same cannot be said for its foreign markets. Nonetheless, due to the competition being faced on the domestic front from private airlines, some revenues have been lost in the face of growing competition from the free market economy.

Land Transport including the Railways:

Over the past one year, there has been substantial investments in the land transport sector of the national economy. The construction of the M2 motorway connecting Lahore and Islamabad is a good example. The motorways if built through out the country would open up the remote regions of the provinces and provide temporary and permanent job to countless people. Otherwise, when it comes to roads, the net work of Grand Trunk Roads and highways laid down by the members of the British Raja are still in place and they are still used to this day. After the departure of the British, there hasn't been much development in the country in terms of transport infrastructure, nonetheless the maintenance of these projects has been sufficient to an extent where they are still used by modern transport to this day.

The Pakistan Railways, again are a legacy of the British Raj and there has been no development whatsoever ever since their departure from the Indian Sub-Continent. The Pakistan Railways today as a symbol of neglect, corruption and politicization of the state run corporations of the country. It is suffering heavy losses although its seats are booked almost 100% most of the time; schedules are not followed; there is hardly any efficiency or motivation in the employees and everything is mismanaged to a great extent.

Land Transport Including Railways

The total length of all kinds of roads in Pakistan is presently estimated at 228,206 km of which high type roads are 124,711 km and low type roads 103,495 kms. National Highway Authority is responsible for the construction, development, repair and maintenance, expansion and improvement of national highways and strategic roads.

The Government is giving high priority to the improvement of the existing roads network as well as construction of new highways. The Lahore Islamabad Motorway was thus selected as the first segment of this link and is operating fully by now. The second segment was Islamabad Peshawar Motorway, completion of which would provide an access highway for fast traffic from Peshawar to Lahore. Pakistan has also signed MOUs for the development of trade routes between Pakistan and Central Asian Republics. The National Highway Authority ahas undertaken a number of feasibility studies and design work.

Pakistan Railways network compromises of 8,775-km route and 781 stations. Its major assets include 631 locomotives, 2,130 passenger coaches and 26,683 freight wagons. During July 96- March 97, it carried 57 million passengers.

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