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Shifts in the Energy Sector

Salman Zaida.jpg
Director Jinnah Institute

As part of the country’s infrastructure, road transport has emerged as a dominant segment with a share of 10% in Pakistan’s GDP.  Massive road infrastructure development in the country is on the horizon, and it’s expected to yield a multiplier effect. The transportation industry is undergoing a paradigm shift with robust demand, higher investments, support in liquidity and significant policy support changing the face of the sector. The government’s ambitious plans for 2023 entail several uplift development initiatives including key highways like N-25 from Karachi - Khuzdar, among other similar mega projects.

But with the growing network, funding needs of NHA are growing rapidly as well, as it continues to inherit state highways owing to its perceived maintenance capacity. However, most of these highways come with backlog maintenance, limited usage, and consequently lukewarm potential for revenue generation. ADB has recently claimed that Pakistan’s motorway toll fees are remarkably low, recommending higher toll fees as well as alternate means for the department to generate revenue as it expands its network. Even so, increasing the toll is not a feasible alternative mainly because the usage of toll roads is already limited, and increasing them would only encourage road users to opt for toll-free routes.

Pakistan’s current road assets management system is adequate to generate the finances for maintenance and growth, but without any stream of revenue NHA might face difficulties in generating revenues needed for the maintenance of the growing network. If NHA doesn’t optimise the development pace & continues developing the highway grid, it might jeopardise the maintenance of the rest of the network as well.

While infrastructure development continues on a grand scale and at a rapid pace in the country, as expected with a growing and urbanising population, it has also shown a detrimental impact on the environment and local communities. On one hand, the roads accessibility positively impacts the sustainable development of these communities, with government sought to bring much needed connectivity and housing to populations residing in far flung areas, on the other the development is adversely impacting the environment, causing an increase in the air pollution from construction materials and waste.

While crucial, development needs to be in harmony with the geography and local needs of the environment, something has been long overlooked.  Authorities would do well to make sustainable choices in selecting building materials and planning road maps.

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