Pakistan Vision 2025 Regional Connectivity Initiative

Working group on Strategic Regional Initiative
to develop the vision for
Modernisation of Infrastructure and
Regional Connectivity
Pakistan Vision 2025
Planning Commission, Islamabad
December 11, 2013

Karachi Port
East Wharf and West Wharf
Pakistan Vision 2025 - Moazzam Husain

Benefits of Regional Integration
• Economic growth and development
• Investment & Trade
• Reduce confict
• Examples
– EU
– ASEAN
– NAFTA
– ECO
– SAARC

Benefits of Strategic Regional Initiative
(Present exercise)
• Materialise benefits of regional integration
• Open up strategic space
• Widen policy options and policy flexibility

Regional Connectivity Outcomes/Output Indicators
• Flow-in, flow-out of :
– Bulk and container traffic
– Oil flow
– Passenger/ visitors traffic
– Regional water sharing
– Electric power and regional grid inter connectivity
– Regional trade in services
– Labour mobility across region

DP World
Port Qasim, Karachi

Expected outcomes 2025
Scenario Outcome
Business as Usual Present volumes will organically grow at
6 – 8 % p.a
Medium Resource Present volumes would balloon to 10
times present size by 2025
Ambitious Exponential growth crossing $ 250 billion
in goods and services flowing each year

Opportunities & Strengths for regional
connectivity
• Opening trade with India
• Allowing Indian goods access to Iran and Afghanistan
and charge a transit fee
• Realise Gwadar port’s potential as a bulk break facility
serving countries on Indian Ocean rim
• Connect another 100 m people with Pakistani ports
– Xinjiang, Western China (20 m)
– Punjab, Haryana & Himachal Pradesh (60 m)
– Growing Afghan Transit trade
– Outlet for mineral resources of Afghanistan (copper, iron
ore)

Our building blocks: Endowments with
which to create opportunities
Let’s talk reality without grandiose geostrategic delusions
• Population resource
• Food production potential
• Water availability
– Storage capacity and seasonality are issues
• Mineral deposits
– Limestone, gypsum, rock salt, silica
• Landlocked Afghanistan
Other working groups are working on how to address this

Challenges
• To our West and North, thinly populated regions
of Iran and China. Implies long distance overland
haulage
– Cost per ton km: If Sea is 100 then rail is 200 and lorry is 600
• Energy deficiency
• Conflict
– Low intensity but continuous
• Weak industrial base
– Technical
– Financial

Instruments to attain the Outcomes
1. Extend MFN to India and implement free visa regime
2. Open borders for trade
a) Wagah – Atari
b) Ganda Singhwala, Kasur – Ferozepur
c) Link Badin to Ahmedabad
d) Open display centres & bonded warehouses on both sides
e) Currency swap and bank branches on both sides
f) Prepare SME’s & sectors to take maximum benefit of 1.2 billion Indian
market
g) Allow border markets for fresh produce and livestock
h) Karachi – Mumbai ferry
3. Upgrade Nankana Sahib to a top international destination for religious
tourism
4. Grid connectivity between NTDC and Indian counterpart agency
– Contd next slide =

Gwadar to Kandahar Rail link, connecting to Afghanistan ring
road

Linked with
Bandar Abbas to
Mashad railway

Instruments to attain the Outcomes
5. Rail line from Gwadar to Kandahar –branch lines to Reko Diq/ Saindak
6. Upgrade PR main line and put the freight back on rail
7. Build following strategic rail segments:
• Link Gwadar port with PR main line at Ratodero
• Rohri – Quetta upgrade
• Connect Gwadar with Chahbahar (Iran) 70 km rail line
• Quetta to Taftan road is in terrible condition. Rebuild
8. Develop river barges on Indus river
• Mari Indus/ Kalabagh upstream to Tarbela
• Downstream to Taunsa
• Movement of cement & indigenous gypsum , coal & iron ore deposits
9. A roadmap to making Gwadar port a functioning bulk breaking facility for Indian Ocean rim
states
10. Iran Pakistan pipeline
11. Feasibility and Financial plan for road/ rail link with Iran to access Caspian region
12. Identify possible vertical linkages with Urumqi Technical and Economic Development Zone
13. Leverage Horgos Free Trade Zone as a springboard to Central Asia
14. Havelian – Kashgar link
• Develop Havelian as a nodal railhead
• Develop dry port and container terminal at Havelian
• Container trucks from Havelian to Kashgar & Urumqi on KKH

A reality check …
• Transporting crude oil from Gwadar to Kashgar as is being suggested is not feasible
• At any rate western China is located in an oil rich region and pipes oil to the
Eastern seaboard
• China’s population is located on the Eastern seaboard and the Gwadar – Kashgar
route is inconsequential except :
– To 22 m population of the Xinjiang region
– Possibly to Kazakhstan that is situated to the west of Xinjiang
• Pakistani goods already enjoy an FTA with China.
– Currency swap is also in place
– Chinese importers can open an L/C
– Sending goods whether overland or by sea via Karachi is not an issue
– The main job is marketing our goods to procure orders !
– Shipping time for a container Karachi to Shanghai by sea is 14 days
• Is a rail link really feasible across the Karakorams?
– More daunting than the recently inaugurated Qinghai – Tibet railway
– Cost can approach $ 30 m per km ( as opposed to $ 1m on flat land)
– Who will finance it?

The counter geostrategic angle: China fears
a wartime blockade of the straits of
Malacca

Caspian / Central Asian region is rich in Oil & Gas
TAPI Pipeline is a possibility. However, Iran is more practical

Suggested Priority initiatives
1. Upgrade PR main line
2. Extend MFN to India
3. Make Gwadar port a functioning bulk breaking facility
4. Open borders for trade with India
a. Wagah – Atari (already opened)
b. Open the border at Ganda Singhwala to connect Kasur with Ferozepur
c. Link Badin to Ahmedabad
d. Open display centres & bonded warehouses on both sides
e. Currency swap and bank branches on both sides
f. Prepare SME’s & sectors to take maximum benefit of 1.2 billion Indian market
g. Allow border markets for fresh produce and livestock
h. Karachi – Mumbai ferry
5. Build the strategic rail segments:
a. Link Gwadar port with PR main line at Ratodero
b. Rohri – Quetta upgrade
c. Connect Gwadar with Chahbahar (Iran) 70 km rail line
d. Quetta to Taftan road is in terrible condition. Rebuild
6. Connect Havelian with Kashgar
1. Develop Havelian as a nodal railhead
2. Develop dry port and container storage facility at Havelian
3. Run container trucks from Havelian to Kashgar & Urumqi on KKH

Estimated resource requirements for the
prioritized instruments/Intervention
Initiative Resource requirement
Upgrade PR main line Approx $ 500 m
Extend MFN to India Legislation and policy
Make Gwadar port a functioning bulk
breaking facility
Public private Partnership mode
Open borders for trade with India • Land for display centres/ bonded warehouses
•Wet markets infrastructure
•Upgrade ferry terminal at Keamari
•$ 50 m for border crossing/ road improvement
Build the strategic rail segments •New lines cost $ 1m per running km
•Cost of 4 intiatives: $ 700 m approx
Connect Havelian with Kashgar •Public Private Partnership mode
•$ 50 m for dry port (Benchmark is Rajasthan dry port)

Risks that need to be mitigated
• Baloch insurgency
• Jihadi/ militant groups’ cross border
adventurism into India
• Sectarian groups and TTP violence along
Karakoram highway
• Rail infrastructure susceptible to sabotage
• Afghan civil war effects

BUILDING A ROAD MAP FOR FUTURE:
KEY INITIATIVES FOR REGIONAL INTEGRATION

(MEDIUM RESOURCE SCENARIO)

Short Term : 2-3 years
• Extend MFN to India
• Open Kasur – Ferozepur border
• Allow border markets for fresh produce and livestock
• Currency swap and bank branches on both sides

Medium Term : 3-5 years
• Prepare SME’s & favoured sectors to take maximum benefit
of 1.2 billion Indian market
• Karachi Mumbai Ferry
• Link Badin to Ahmedabad
• Allow Indian goods overland access to Afghanistan and Iran
• Open display centres & bonded warehouses on both sides

Long Term : 10 years
• Upgrade PR main line
• Make Gwadar port a functioning break bulking
facility
• Connect Havelian with Kashgar

(AMBITIOUS RESOURCE SCENARIO)

Short Term : 2-3 years
• Extend MFN to India
• Open Kasur – Ferozepur border
• Allow border markets for fresh produce and livestock
• Currency swap and bank branches on both sides
• Link Badin to Ahmedabad
• Rebuild Quetta to Taftan road

Medium Term : 3-5 years
• Iran Pakistan pipeline
• Upgrade PR main line
• Prepare SME’s & favoured sectors to take maximum benefit
of 1.2 billion Indian market
• Karachi Mumbai Ferry
• Allow Indian goods overland access to Afghanistan and Iran
• Link Gwadar port with PR main line at Ratodero
• Rohri – Quetta rail line upgrade
• Connect Gwadar with Chahbahar (Iran) 70 km rail line

Long Term: 10 years
• Make Gwadar port a functioning break bulking facility
• Develop Havelian as a nodal railhead
• Develop dry port and container storage facility at Havelian
• Run container trucks from Havelian to Kashgar & Urumqi on
KKH
• Upgrade Nankana Sahib to a top international destination for
religious tourism
• Grid connectivity between NTDC and Indian counterpart
agency

THANK YOU
http://en.gravatar.com/moazzamhusain

Pakistan Vision 2025 Regional Connectivity Initiative

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (17)

Similar to Pakistan Vision 2025 Regional Connectivity Initiative

Similar to Pakistan Vision 2025 Regional Connectivity Initiative (20)

More from Moazzam Husain

More from Moazzam Husain (12)

Recently uploaded

Recently uploaded (20)

Pakistan Vision 2025 Regional Connectivity Initiative