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Pakistan Railways Traffic (Million Units) Report No.36523-PKReport No. Pakistan36523- in Pakistan Competitiveness Transport PK Pakistan Transport Competitiveness in Pakistan Analytical Underpinning for National Trade Corridor Public Disclosure Authorized Public Disclosure Authorized Improvement Program July 18, 2006 Energy and Infrastructure Operations Unit South Asia Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Public Disclosure Authorized Public Disclosure Authorized NTTFC National Trade and Transport Facilitation Committee OECD Organization for Economic Co-operation and Development PACCS Pakistan Customs Computerized System PIFFA Pakistan International Freight Forwarders Association PIFFC Pakistan International Freight Forwarders Council PIL Pacific International Lines PNSC Pakistan National Shipping Company NTCIP National Trade Corridor Improvement Program NYK Nippon Yusen Kaisha PONL PONL Royal P&O Nedlloyd N.V. PQA Qasim Port Authority PR Pakistan Railways PRCAS Pakistan Railways Advisory and Consultancy Services PRAL Pakistan Revenue Administration Limited PRC Pakistan Railways Corporation PSO Public Service Obligation QICT Qasim International Container Terminal SME Small and Medium Enterprise TARP Tax Administration Reform Project TEU Twenty Foot Equivalent Unit THC Terminal Handling Charge TIR Transport Internationaux Routiers (French acronym) TRRL Transport and Road Research Laboratory TTFP Trade and Transport FacilitationProject UNCTAD United Nations Conference on Trade and Development vss Voluntary Separation Scheme VTMS Vessel Traffic Management System WTO World Trade Organization CURRENCY AND EQUIVALENTS Pakistan Rupee (PKR) US$l = PKR 59.86 (February 6,2006) GOVERNMENT’S FISCAL YEAR July 1 -June 30 Vice President Praful Patel, SARVP Country Director John W. Wall, SACPK Sector Manager Guang Z. Chen Task Manager Simon Thomas -3- Acknowledgements This report summarizes the results of action-oriented modal studies to provide advice to the Government of Pakistan (GOP) on enhancing the performance of the Transport Sector and its contribution to the country's growth agenda. The analysis and recommendations of this study underpin the Bank support and advice to GOP on the strategic framework for the National Trade Corridor (NTC) which was initiated by the Prime Minister in August 2005. The data used to prepare the report were obtained through various studies conducted during 2004/2005 by individual international and national consultants. These studies collected information from public and private entities and benefited from extensive meetings with both the public and private sectors in Pakistan. The information provided and numerous discussions are gratefully acknowledged. The report has been prepared by a team of Bank staff led by Simon Thomas, Lead Transport Economist. The team included herZafar Durrani, Cordula Rastogi, Mohammed Dalil Essakali, Navaid A. Qureshi, and Zafar Iqbal Raja. Shaukat Javed and Rajesh Dongol provided administrative assistance throughout. The report benefited from studies undertaken by Edward T. Laing, Farooque Chaudhry, John Arnold, John Terry, Richard Bullock, and Sardar Humayun Khan. The report has been prepared under the general guidance of Guang Z. Chen, Sector Manager for Transport South Asia 'Region. Peer reviewers were Michel Zarnowiecki (Sr. Trade Facilitation Specialist, former World Bank staff, currently France Customs staff) and Zhi Liu (Senior Infrastructure Specialist, EASTR). Table of Contents Abbreviations and Acronyms .......................................................................................................................... 2 - Acknowledgements ........................................................................................................................................... 4 - Table of Figures ................................................................................................................................................ 7 - EXECUTIVE SUMMARY ............................................................................................................................. - 8 - CONCLUSIONS AND RECOMMENDATIONS....................................................................................... - 13 - 1. A TRADE FACILITATION AGENDA .................................................................................................. .- 17 - 1.1. INTRODUCTION........................................................................................................................... - 17 - 1.2. EVOLUTION OF IMPROVEMENTS IN TRADE AND TRANSPORT LOGISTICS............ - 18 - 1.2.1. Pakistan’s Export Characteristics ........................................................................................ - 18 - 1.2.3. Trade Facilitation and Logistics at the core ofNTCIP ....................................................... - 20 - 1.3. DIAGNOSTIC OF TRADE LOGISTICS IN PAKISTAN .......................................................... - 21 - 1.3.1. Customs Modernization: Simplified Procedures............................................................... ..- 22 - 1.3.2. Ancillary Logistics Providers.. ............................................................................................ - 23 - 1.3.3. Opportunities with respect to Supply Chain Security ....................................................... ..- 25 - 1.4. THE WAY FORWARD: A TRADE FACILITATION AGENDA ............................................. - 25 - 1.4.1. Develop national trade facilitation strategy ......................................................................... - 26 - 1.4.2 Establish effective public-private partnership ..................................................................... - 26 - 1.4.3. Rapid roll out ofCARE approach and refinement .............................................................. - 27 - 1.4.4. Improve range and quality oflogistics services .................................................................. - 28 - 1.4.5. Increase efficiency at dry ports ........................................................................................... - 28 - 1.4.6. Establish systematic performance monitoring system......................................................... - 29 - 2. PAKISTAN PORTS POLICY ........................................................................................................... .......- 30 - 2.1. INTERNATIONAL PORT REFORM .......................................................................................... - 30 - 2.2. PROGRESS IN PAKISTAN’S PORT REFORM ...................................... ............................. - 30 - 2.3. NEED FOR FURTHER REFORM ............................................................................................... - 32 - 2.3.1 Port Authorities ................................................................................................................... - 32 - 2.3.2 Karachi Dock Labor Board ................................................................................................ .- 35 - 2.4. INVESTMENT REQUIRED.......................................................................................................... - 36 - 2.5. OTHER ACTIONS NEEDED ........................................................................................................ - 37 - 2.6. REGULATION................................................................................................................................ - 38 - 2.7. SUMMARY OF MAIN RECOMMENDATIONS........................................................................ - 38 - 3. PAKISTAN SHIPPING POLICY ............................................................................................................ - 39 - 3.1. INTERNATIONAL SHIPPING TRENDS .................................................................................... - 39 - 3.2. OBJECTIVES OF SHIPPING POLICY ....................................................................................... - 39 - 3.3. PERFORMANCE OF EXISTING SHIPPING SERVICES ........................................................ - 39 - 3.3.1. Container Shipping Services ............................................................................................... - 39 - 3.3.2. Bulk Shipping Services ....................................................................................................... - 41 - 3.3.3. Overall Assessment ofShipping Services ........................................................................... - 4 1 - 3.4. THE NEED FOR GOVERNMENT INTERVENTION............................................................... - 42 - 3.5. THE PROMOTION OF NATIONAL SHIPPING ....................................................................... - 42 - 3.5.1. The Role ofthe Pakistan National Shipping Corporation (PNSC) ................................... ...- 42 - 3.5.2. Attempts to Promote Private Shipping ................................................................................ - 43 - 3.5.3. Merchant Marine ................................................................................................................. - 43 - 3.5.4. Recommendations for the Promotion ofPakistan’s Shipping Industry............................... - 44 - 4. THE RAIL SECTOR IN PAKISTAN: POLICY AGENDA ............................................................... ...- 45 - 4.1. INTRODUCTION........................................................................................................................... - 45 -
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