Govt must push for 24X7 cargo movement through Attari border
As a new government has taken charge in Punjab, the major economic challenge it faces is to create a conducive investment environment. Punjab’s locational disadvantage makes production of and trade in goods uncompetitive.
To illustrate, a Mumbai exporter has to pay $1,400 (around ₹91,000) as ocean freight for shipping a container from Mumbai to Europe. An exporter from Ludhiana has to incur an additional $490 (around ₹32,000) as inland haulage cost of moving a container from Ludhiana to Mumbai, apart from the additional time of three to four days in transit. In other words, a Punjab exporter incurs anything between 30-35% additional freight costs, thus virtually making exports uncompetitive.
According to the Economic Survey (2015-16), after Delhi, the states that attracted maximum foreign direct investment (FDI) were Maharashtra, Karnataka, Gujarat and Andhra Pradesh – all four with seaports.
Punjab’s economic salvation lies in opening the gates of the Attari-Wagah border to trade and commerce that will make Punjab a port state with the world’s largest market literally on its doorstep – if not at its feet. Apart from our immediate neighbour, Pakistan, this region includes Afghanistan, Iran and the Commonwealth of Independent States (CIS) of the former Soviet Union: Turkmenistan, Tajikistan, Kazakhstan, Uzbekistan and Kyrgyzstan. Beyond, through Turkey, this region opens up to Europe.
Given the existing rail and road network linking Northwest Punjab to Zahedan in Iran, which is further connected to the CIS through an excellent road infrastructure and the transnational rail, links can be operationalised immediately.
An all-weather road connects Attari to Zahedan via Lahore, Muzzafargarh, Rohri, Quetta, Dalbandin, Mirjaveh.
A cargo truck from Amritsar (or even Delhi) can reach Zahedan in about the same time it takes to reach Mumbai for shipment of cargo by sea to foreign ports.
From Zahedan, the container trucks travel a distance of 1,455 km to reach Ashgabat, the gateway to Central Asia, from where these can reach Europe through Turkey.
According to a study more than a decade ago, at least 10,000 trucks will cross the India-Pakistan border at Attari daily from both sides if it is opened to vehicular movement. Almost 80% container traffic from Asia’s largest container freight station at Tughlaqabad, Delhi, which presently moves to Mumbai, will find it more economical to divert to the land route via Attari-Wagah border. The direct and indirect employment potential of such a huge movement of trucks is staggering.
A significant development is a proposed meeting of railway officials from five countries — Bangladesh, India, Pakistan, Iran, and Turkey — in New Delhi, later this month, to fine-tune the plan to operationalise the Trans-Asian Railway southern corridor, connecting Thailand to Turkey, and, if all goes well, the demonstration run can happen this year itself.
A 1,676-km broad gauge railway line already exists, running through Amritsar-Quetta-Dalbandin-Mirjaveh and extending up to Zahedan in Iran. From Zahedan to Tehran, Iranians are constructing an 80-km missing link of rail tracks. Since the gauge is uniform throughout, no transhipment is involved.
If India, Pakistan, Iran and Dhaka reach to an agreement, the existing Samjhauta Express can make the trial inaugural run from Dhaka to Zahedan within two months, given the common operational protocols that govern the railways in India, Pakistan and Bangladesh.
There are some issues that require immediate attention:
n Punjab should urge the Government of India (GoI) to be actively involved in all initiatives relating to transnational rail and road discussions because of Punjab’s strategic location. This will keep Punjab in the loop and help in advance planning.
n Attari is the last railhead on Indian side and will therefore have to be transformed into a modern, fully automated terminal to provide seamless travel as happens in Europe. Punjab will have to prepare the necessary infrastructure in advance, including state-of-the-art multilevel warehousing.
n The Attari integrated check post (ICP) is uniquely placed to be a modern multimodal hub, because of the presence of international rail and road terminals. In other words, containerised cargo arriving by rail can move on road and vice versa.
n Unfortunately, the Attari ICP is plagued by multiple problems, including inefficiency and high cargohandling costs because of exorbitant rates charged by truck unions and organised labour, virtually nullifying the intended benefits of the inland container depot (ICD).
n The Punjab government should move the GoI to appoint a senior Indian Administrative Services (IAS) officer of the Punjab cadre at Attari so that operations are run in accordance with internationally accepted competitive standards. The chairman of the JNPT container terminal at Navi Mumbai, India’s biggest, has traditionally been a very senior IAS officer of the Maharashtra cadre.
n But the most important issue on which Punjab must push the GoI is implementation of the agreement signed between India and Pakistan in 2014 to allow 24x7 movement of containers by road through the Attari-Wagah border. The Pakistan government withheld implementation of this agreement till after the 2014 elections in India. Because of the strained relationship since then, the agreement has been put in the cold storage.
The 24x7 movement of containers will be a gamechanger for both Pakistan and India, especially Punjab. In international trade, the critical factor in container logistics is the turnaround time of containers, especially empty ones. If the Attari-Wagah border is opened to container movement, shipping lines can move empty containers from Ludhiana ICD to Lahore ICD and vice versa. This will reduce time and freight costs and become a trigger for international trade. Subject to the GoI approval, a joint survey team can be formed to undertake the road journey from Attari to Zahedan to make an assessment of the road conditions and the feasibility of movement of cargo.