Road Infrastructure: Prosperity Needs a Pathway
Project Manager Jinnah Institute
The policy debate on overhauling Pakistan’s infrastructure has steadily grown in recent years. The roads network in particular, has emerged as a key component of infrastructure that contributes 10% of GDP; this may seem a modest statistic at present, but projected to grow significantly and yield a multiplier effect.
The transportation industry is thriving with robust demand, higher investments, support in liquidity and significant policy assistance. The government’s ambitious plans for 2023 entail several uplift development initiatives including key highways like N-25 from Karachi - Khuzdar, among other mega projects.
But with the growing roads network, funding needs of the National Highway Authority (NHA) are growing rapidly as well, as it continues to inherit state highways because of a perceived maintenance capacity. Most of these highways come with backlog maintenance, limited usage, and low potential for revenue generation. One view holds that Pakistan’s motorway toll fees are remarkably low and charging higher toll fees is in order for the department to generate revenue as it expands the network. Yet increasing charges may not be feasible as usage of toll roads is already limited; it will disincentivise transporters and place a greater affordability burden on passengers. Pakistan’s current road assets management system may still adequately generate the finances for maintenance and growth for now. However, NHA must also focus on the development of the whole network, instead of the highway grid alone. This should be a policy priority in 2023.
Urbanisation and agglomeration are potential game changers to capitalise on. There are several small and medium sized cities where manufacturing-driven growth has created industrial clusters, but their inter-city roads network or intra-city public transport remains poor. It is important to expand the network of secondary roads between major highways, and between small cities to facilitate commercial activity. Furthermore, overhauling transport logistics (including containerisation of freight transport) will bring about commercial benefits, strengthen urban-rural linkages, and reinforce supply chains. To alleviate some of these challenges, Pakistan is soliciting investments in urban and inter-urban transport, trucking, and international and air freight transportation. Whereas Specialised Economic Zones (SEZs) under CPEC are expected to create opportunities for both local and international investors to set up trade and logistic services for regional connectivity.
While infrastructure development goes on apace, partly in response to rapid demographic change and urbanisation, its detrimental impact on the environment and local communities is not fully thought through. To be sure, increased accessibility through roads positively impacts mobility, employability, and commercial activity for communities, and assists their usage of public services. But the development of mega projects often displaces and exploits them. Decision-makers must pay greater attention to project contractors undercutting the land rights of communities.
Furthermore, environmental feasibilities are now in much greater demand, with Pakistan making a bid for leaner carbon emissions in the decade ahead, as well as minimal environmental damage from infrastructure projects. Yet these too, mostly offer lip service to the idea of environmental protection. 2023 may be the best year to take a hard look at infrastructure development, and ways to find sustainable solutions that complement the natural environment. Some avenues in this regard include renewable energy sources and uptake of electric vehicles, offering a shift away from excessive carbon emissions.