Pakistan’s misguided obsession with infrastructure

[Leviza]

There is scant traffic along the 375km link between Islamabad and Lahore (pictured). Motorists can drive for miles without seeing another vehicle,

Rubbish, the author looks like never traveled on M2..

 

[VCheng]

Assuming 15 million vehicles per year, it is still only about 41,000 vehicles per day. (100,000 vehicles per day is about 36.5 million vehicles per year.)

 

[Kabira]

Assuming 15 million vehicles per year, it is still only about 41,000 vehicles per day. (100,000 vehicles per day is about 36.5 million vehicles per year.)

In one year vehicles increased from 9.6m to 10.5 million 2002-03. By now it most be over 25 million per year.

 

[Hyde]

Those disagreeing with the motorway being called underused, please keep in mind that a six lane motorway usually carries well over 100,000 vehicles per day (some much more). What are the actual usage figures for the Lahore-Islamabad section?

Sir I am not sure about the traffic on Islamabad-Lahore motorway but who on earth pays 500 rupees for only 350km of motorway that we have to pay in Pakistan?

In UK I hardly pay toll charges on motorways. There is only one toll charge that I remember near Birmingham on M-6 motorway which can easily be bypassed by staying on M-6 and avoiding the M-6 bypass There are some other toll charges on bridges such as Dartford crossing or the bridge linking England and wales but these are hundreds of miles away from each other.

M-2 was built in 1990s for around 700 million USD, the same road in 2016 would cost billions of dollars and the terms agreed to Korean company, as far as I remember the payments were made by 2012 and Now M-2 is completely owned by Pakistan. Which means they are making billions of rupees each year from toll charges only... although I am fully aware of the reconstruction project given to FWO and the same road could have been constructed with 4 lanes but the point is, you already own it now and is part of your assets

 

[VCheng]

Sir I am not sure about the traffic on Islamabad-Lahore motorway but who on earth pays 500 rupees for only 350km of motorway that we have to pay in Pakistan?

In UK I hardly pay toll charges on motorways. There is only one toll charge that I remember near Birmingham on M-6 motorway which can easily be bypassed by staying on M-6 and avoiding the M-6 bypass There are some other toll charges on bridges such as Dartford crossing or the bridge linking England and wales but these are hundreds of miles away from each other.

M-2 was built in 1990s for around 700 million USD, the same road in 2016 would cost billions of dollars and the terms agreed to Korean company, as far as I remember the payments were made by 2012 and Now M-2 is c9mpletely owned by Pakistan. Which means they are making billions of rupees each year from toll charges only... although I am fully aware of the reconstruction project given to FWO and the same road could have beem constructed with 4 lanes but the point is, you already own it now and is part of your assets

Oh I support the motorway building in Pakistan. But, for The Economist to say that they are presently under-used is not incorrect. Even 25 million vehicles per year is well below the reasonable capacity of the motorway as it presently stands. Raising tolls would drop traffic, so the incremental revenue may not be as large as projected.

 

[SMC]

Assuming 15 million vehicles per year, it is still only about 41,000 vehicles per day. (100,000 vehicles per day is about 36.5 million vehicles per year.)

That is a low ball estimate. It is likely 20 million at least now. Second, even at 100,000 AADT 6 lane motorways begin to get quite congested.

Oh I support the motorway building in Pakistan. But, for The Economist to say that they are presently under-used is not incorrect. Even 25 million vehicles per year is well below the reasonable capacity of the motorway as it presently stands. Raising tolls would drop traffic, so the incremental revenue may not be as large as projected.

Have you driven on interstates in rural areas? They are almost always well below capacity, even in populated states like California. They are only heavily used in urban areas and their surrounding suburbs. Where does the assumption come from that motorways must be operating near full capacity?

 

[VCheng]

Please keep in mind that the Economist is a British newspaper.

 

[shahbaz baig]

If one day a western power such as the US decides to sanction Pakistan for whatever reason, then their investment will go down the drain.

i agree with your opinion is based on facts.. but i don't agree that UN will decides to sanction Pakistan for whatever reason.. because there are some rules and principles to sanction any country.. until Pakistan don't attempt those conflicts with UN Sections policy till then UN cant sanction Pakistan.. and Pakistan is not doing any such things that can cause UN Sections..

• Diplomatic sanctions – the reduction or removal of diplomatic ties, such as embassies.
• Economic sanctions – typically a ban on trade, possibly limited to certain sectors such as armaments, or with certain exceptions (such as food and medicine)[1]
• Military sanctions – military intervention
• Sport sanctions – preventing one country's people and teams from competing in international events.
• Sanctions on Environment – since the declaration of the United Nations Conference on the Human Environment, international environmental protection efforts have been increased gradually.

 

[Flash_Ninja]

i agree with your opinion is based on facts.. but i don't agree that UN will decides to sanction Pakistan for whatever reason.. because there are some rules and principles to sanction any country.. until Pakistan don't attempt those conflicts with UN Sections policy till then UN cant sanction Pakistan.. and Pakistan is not doing any such things that can cause UN Sections..

• Diplomatic sanctions – the reduction or removal of diplomatic ties, such as embassies.
• Economic sanctions – typically a ban on trade, possibly limited to certain sectors such as armaments, or with certain exceptions (such as food and medicine)[1]
• Military sanctions – military intervention
• Sport sanctions – preventing one country's people and teams from competing in international events.
• Sanctions on Environment – since the declaration of the United Nations Conference on the Human Environment, international environmental protection efforts have been increased gradually.

Good point, but the US under a 'liberal' Obama administration sanctioned organizations with links to our missile programs.

If Trump gets upset, or convinced that Pakistan is bad then he could easily launch full economic sanctions with the likely support of his right-wing congress. It probably wouldn't be endorsed by the UN, but could easily be done by the US and a handful of its allies.

The US alone could be significant enough to send a message to international companies that they wont be able to make as much profit since the country is under sanction and would be a risky investment.

 

[SMC]

Please keep in mind that the Economist is a British newspaper.

If you mean they are trying to apply British geography to Pakistan then it's entirely stupid. Pakistan is much bigger both in terms of land and population, and the density is different too. Britain can get away with having rails and short motorways. Pakistan should be compared to places like US in this regard. There is a lot of population but there is also a lot of land. You need both motorways AND rail.

 

[SBD-3]

And how strong they are economically and their tax-to-gdp ratio. If we were able to increase our tax-to-gdp ratio we would have no need to take debts.

If their tax/gdp is sufficient for their economic needs, their debt/gdp wouldn't be higher in the first place. Secondly, they have developed into what we call "Tax culture" where citizens paying their taxes is a cultural etho, unlike Pakistan where a dominant majority finds various excuses to evade taxation.

 

[Hareeb]

If their tax/gdp is sufficient for their economic needs, their debt/gdp wouldn't be higher in the first place. Secondly, they have developed into what we call "Tax culture" where citizens paying their taxes is a cultural etho, unlike Pakistan where a dominant majority finds various excuses to evade taxation.

Then instead of increasing tax-to-gdp ratio, should you keep taking debts and loans on high interests? Yeh kahan ki aqal-mandi ha? Governments take loans to start high-budgeted projects those can repay rather than those which cant repay and instead you have to give subsidies for them like Mass Transit Systems. And less then 1% of Pakistanis pay taxes. If this %age increase to 10% or atleast 5% of total population, we will not have any need of taking loans. To achieve this, first educate people, bring awareness among them, and bar those dont give taxes rather than voluntary return like NAB and FIA offers to corrupts. You bar 10, 100 will start paying taxes

 

[SBD-3]

Then instead of increasing tax-to-gdp ratio, should you keep taking debts and loans on high interests? Yeh kahan ki aqal-mandi ha? Governments take loans to start high-budgeted projects those can repay rather than those which cant repay and instead you have to give subsidies for them like Mass Transit Systems. And less then 1% of Pakistanis pay taxes. If this %age increase to 10% or atleast 5% of total population, we will not have any need of taking loans. To achieve this, first educate people, bring awareness among them, and bar those dont give taxes rather than voluntary return like NAB and FIA offers to corrupts. You bar 10, 100 will start paying taxes

You wana see what happens when there's no MRT just see what's happened in Karachi. Roads are now stuck with long lines because there's 1-No good alternative mode of transportation than private transport and 2-There's no investment in infrastructure to accommodate the alarming increase in private vehicles. Infrastructure is expensive and a public good because the returns are more externalities than direct financial flows. I say again not paying one's taxes is a culture in Pakistan. Property market came to standstill because of taxation as the launderers wanted to avoid being noticed by FBR.
And this was done just yesterday by the Corrupt NAB in the province which happens to have "the best" Ehtisaab Commission in the country

P:S.Just one question, do you file your returns?

 

[Hareeb]

You wana see what happens when there's no MRT just see what's happened in Karachi. Roads are now stuck with long lines because there's 1-No good alternative mode of transportation than private transport and 2-There's no investment in infrastructure to accommodate the alarming increase in private vehicles. Infrastructure is expensive and a public good because the returns are more externalities than direct financial flows. I say again not paying one's taxes is a culture in Pakistan. Property market came to standstill because of taxation as the launderers wanted to avoid being noticed by FBR.
And this was done just yesterday by the Corrupt NAB in the province which happens to have "the best" Ehtisaab Commission in the country

P:S.Just one question, do you file your returns?

Im not talking about Karachi. Im talking about Rs. 150 billion+ Metro Train project. The one going to build on upgraded Multan Road. It is economically feasible to build a new road than destroy the built one and revamp it again.
As far as people investing in estate rather than industries, whats the reason behind this? Why our garments industry is being shifted to Bangladesh and Sri lanka? There are many reason behind this. The two are power shortages and government tax policies. Government doesnt give incentives to industralists and rather taxes industries heavily while they cant maintain their production to cross breakeven due to power shortages. So why they do pay taxes when they know the taxes wont give them any benefits. Government has to change her policies and protect local industry rather than asking outsiders to invest in country with power shortage.
Yes i have shares in Ittehad Chemical Limited and I do pay tax on dividends.