NLC’s Role in Reconstruction of Afghanistan

Columnist M ZAFAR looks at what our premier logistics organisation can do for our western neighbour.

About two months ago US forces in Afghanistan carried out a big military operation that promised to root out the remaining Al Qaeda elements and establish peace in throughout the length and breadth of the country. At the conclusion of the operation the Commanding General of US forces claimed complete victory but observers drew their own conclusions. The war was far from finished, Al Qaeda far from defeated and peace in Afghanistan far away on distant horizons. Their conclusions were confirmed by the postponement of King Zahir Shah’s return to Kabul and involvement of allied forces in yet another operation in the province of Paktia. This is not good news for those who are looking for business with the country.

The six months’ limit set by the Bonn Agreement is approaching fast when the temporary arrangement headed by Mr. Hamid Karzai must give way to an order legitimized by the ‘Loeye Jirga’. The interim regime would be concentrating on internal politics and the logistics involved in holding of the big event. They would have precious little time for anything else. And if that was not enough a devastating earthquake wrought havoc in northern parts claiming immediate priority over everything else. Under the circumstances most observers assume that better part of the year will be over before work on reconstruction and rehabilitation can start.

Pakistan should utilise this time to plan and set objectives and priorities. To start off with it must be realised that our record of trade with Afghanistan or for that matter with all our neighbours has been poor.

Exports (Pk R - million)

Imports (Pk R-million)

1987-88           112,551  223   341    2384   3942

1988-89           135,841   158   614    1932   5944   

1989-90           148,853     86   816    2585   5816 

1997-98           436,338  1190   6675  6809   22046

1998-99           465,964  1831   7205  3853  19487

1999-20           533,971   2115  6595  6746   24416

Much comment is not needed. There has been some improvement in late nineties and the momentum needs to be maintained. That would demand detailed survey, better liaison between trade bodies and improvement of physical and banking infrastructure between the two countries. Some incentives are already in place but will have to be improved to make the required impact.

It is true that Afghanistan needs everything literally from a needle to a plane and it is also equally true that Pakistan can meet all their requirements except perhaps high technology goods. Pakistan could meet Afghanistan’s requirements of wheat, rice, sugar, vegetable oil, medicines, clothing, electric appliances, household utensils, plastic material, fertilisers, and a host of other consumer goods. Building materials like cement, iron, steel, bricks could also be supplied from Pakistan. To supplement local human resources Pakistan could send bankers, engineers, doctors, architects, builders and trained workers. Pakistani private sector could undertake physical infrastructure projects like roads, highways, schools, hospitals and housing.

Recently President FPCCI Mr. Iftikhar Ali Malik met with the Afghan Finance Minister Mr. Hidayat Amin Arsala at Islamabad and suggested exchange of trade delegations to identify and prioritise trade and investment opportunities for short and long-term projects. That is a step in the right direction but will need vigorous follow through. In the last analysis results will depend on our performance in a competitive market flush with goods from Russia, Iran, India and China. We will have to give better prices, fair and consistent quality, and expeditious deliveries. And that last point brings us to the crucial and natural advantage that we have over other countries — transportation. Properly exploited this can give us a prime spot in the economy of Afghanistan and open up vistas of opportunity for our own people at all rungs of economic ladder.

Take a look at the layout of our road and rail networks. It would seem that these systems were designed with only Afghanistan in view. Actually it is true. From the ports of Karachi and Bin Qasim communication lines run straight to rail/road heads at Afghanistan border. This fact of easy and fast access makes Pakistan the preferred route not only to Afghanistan but also to Central Asian countries. Add assurances of service and security and you make it irresistible.

Having said that let us take a look at the performance and promise of rail and road sectors. Over the years the performance of railways has gone down and volume of freight carried over its system has shrunk from over 12 million tons in 1987-88 to about 5 million tons in 2000. The number of freight wagons came down to 22247 in 2002.

Route Kms       Freight Wagons  Locomotives     Freight Carried

1987-88           8775                     NA   NA       12 million tons (approx.)

1988-89           8775                         -   -                   10” ”

1989-90           8775                         -   -                     9” ”

1997-98           8775                    24275  611              6” ”

1998-99           7791                     24456 596              6” ”

1999-20           7791                     22247 582              5” ”

In the context of transit of goods to Afghanistan, our railways would need a huge injection of investment for large-scale renewal of track, replacement and acquisition of rolling stock, locomotives and refurbishment of technical support facilities. In the short time perspective Pakistan Railway’s role can only be marginal. Pity, but its true.

Road sector, however, is more promising. In year 2000, over a network of 249,959 route kilometres, some 4.44 million registered vehicles were plying in pursuit of business and pleasure. Out of this 148,569 were load-carrying trucks of capacities of 10, 20 and 40 tons totally dedicated to the service of the economy. For growth see chart below: 

Year      1987                  1988     1989      1998      1999    2000

Trucks (10, 20, 40 ton)   81630   85436    90408  132895 141111 14856

Assuming a period of ten days between the ‘sorties’ to borrow an Air Force term, the approximate rail, road combined lift capacity of our rail and road freight carriers can be computed to be around 30,000,000 tons per annum. Compare this with tonnage of cargo handled at our ports: 

Year     1987-88           1988-89           1989-90    1997-8    1998-99              1999-2000

Tons       (000)                21438              23019       24388        30044            29414 30232

It will be seen that our transportation capacity is finely matched with the tonnage handled at the ports. More importantly it also means that we have no reserves to meet any additional loads.

Now coming specifically to the logistical requirements of transit of goods to Afghanistan, let us first take a look at the figures of Afghan cargo handled at Karachi during the last three years.

1998: 59000 tons

1999: 76000 tons

2000: 1,44000 tons

It may be noted that from in 1999, the volume of Afghan cargo increased by 50% over the previous year’s figures. Between 1999 and 2000 the volume of cargo almost doubled — from 76000 tons to 144000 tons. This year (2001-2002) by February 104,000 tons of cargo for Afghanistan had gone through Karachi harbour. It is estimated that by June this year the figure of 160,000 tons may be touched. If that happens it would mean an increase of about 10% over the last year’s figure. Slightly higher than this rate of increase say upto about 15% is likely to be sustained during the years of reconstruction. Pakistan’s logisticians need to work on ways and means of not only absorbing that much of incremental business but also for attracting customers now dependent on alternate routes by offering better service and security.

Our ports Karachi and Bin Qasim can cope with the increase in traffic with some effort. Gwadar will not be fully operational during the next five to six years expected to be the peak period in the reconstruction of Afghanistan. Main arteries leading to Afghanistan are good. Even so except for N-5, Karachi-Lahore-Peshawar (1756 Km), all others namely N-55 Karachi-Sukkur-DI Khan-Peshawar (1265 Km), N-25 Karachi-Khuzdar- Kalat-Quetta-Chaman (816 Km) N-65 Sukkur-Sibi-Quetta (385 Km) and perhaps Road Multan-Loralai-Quetta would need to be improved.

To make an effective start in that direction we should put our best foot forward. It appears reasonable to suggest that our strategy should be built around National Logistics Cell — a wonder child in the business of strategic transportation. Their involvement will at once signal safety, security and hassle free business interaction to the potential customers. NLC should be tasked to build an odd dry port near Afghan border and the Cell should by itself be thinking of establishing quite a few transhipment points duly supported by warehouses. At the rate of envisaged increase in traffic an addition of 50 to 60 long vehicles to their fleet every year should suffice. This much should be well within the investment capability of the Cell. At appropriate time they should in collaboration with Pakistan International Freight Forwarders Council of FPCCI work out ways and means of involving the private sector and sublet jobs while retaining control for assurance of quality in service and maintenance of uniform standards. This infrastructure once on ground would grow by itself and would not only meet the requirements in Afghanistan but also help our gradual ingress into the markets of Central Asia.