Karachi:”Pakistan is already not ranked high on the “doing business” scale of World Bank. With inflating input costs and appreciating foreign currency, another cost-increasing measure such as axle load regime would have wreaked havoc for aggregate growth and employment figures of the country”.
This was stated by Chairman Employers Federation of Pakistan Economic Council (EFP-EC) Chairman Ismail Suttar.
He said: “the earlier decision was taken without consulting with stakeholders and has rattled the business community’s confidence and instantly jeopardized efforts of government to boost export competitiveness. It is estimated that this move will escalate the monthly freight cost by over Rs450billion”.
Ismail Suttar endorsed government’s decision to put a halt on the limitation of axle load on the registered 310,000 truckers and 20,000 tankers in Pakistan. According to him, given the current industry’s optimal capacity to produce a mere 9000-10,000 units per annum, it will easily take 20-25 years or USD 12.5 billion of expensive import to meet the additional fleet demand.
The estimates from EFP Economic Council suggest that if the additional freight cost is injected into the input cost, then sales in the cement industry are likely to fall from 42 million tons to 20 million tons. This can significantly impact the development of key infrastructural projects by decelerating by slowing it down.
The Council also cautioned that in case agri-businesses are also hit [which seems inevitable], the subsequent cut down of fertilizer supply can lead Pakistan into famine and perhaps, even civil unrest.
Suttar said that if the Rs. 176 billion PSDP budget for national highway is to truly bear fruits, then a comprehensive framework must be drafted. While referring to the latest edition of Economic Survey, he pointed out that 93 percent freight on the 263,415 km network of inland transport in Pakistan is conducted on roads and 65 percent of these vehicles are single or double-axle Bedford Trucks. These have been running for decades and excessive overloading on them has exacerbated fuel demand and as a result, disrupted the balance of payments.
He proposed that instead of curtailing axle load, which could increase unemployment, the revenue generated through various kickbacks and commissions should be directed towards building better road infrastructure through collaboration with international expertise.
Furthermore, unscrupulous weight-bridge operators have started to engage in corrupt practices of falsifying the weights by declaring less tonnage on their receipts, this practice needs to be corrected by the authorities.
According to the EFP Economic Council, any plans of replacing the existing single and double-axle fleet, given the high interest rates and a plunging Rupee-Dollar parity, seems irrational. From another angle, the government could rationalize import tariffs to make induction of prime-movers affordable, if it is to reenact the 2000 Road Safety Ordinance effectively. If this plan succeeds, then the import bill could be reduced by as much as 25 percent.