Business
Pakistan must put rail before roads | The Express Tribune
KARACHI:
Pakistan has not one but two transport policies. The first, titled National Transport Policy of Pakistan 2018, was prepared by the Planning Commission. The second, the National Freight and Logistics Policy, was issued by the Ministry of Communications in 2020.
The first policy states that it “reflects the government of Pakistan’s aim to create a world-class transport sector.” The second offers up some more detail, “To drive economic growth and trade in Pakistan by increasing the country’s competitiveness through an integrated, seamless, efficient, reliable and cost-effective freight transport and logistics network, leveraging best in class technology, processes and manpower.”
These vision statements miss the point. What Pakistan needs is a transport sector that works for its people – all its people, rich and poor. It does not need it to be “world class” or leverage “best-in-class technology”.
Reading the policies themselves, one is struck by a strange disconnect: There is a complete absence or discussion of factors critical to the design and implementation of any transport system. These include demographics, population density and distribution, topology – particularly for intercity transport – per capita income, and income distribution.
Transport systems do not exist in a vacuum. There must be a full understanding of the enabling environment. Without this understanding and specific design objectives, what is likely to emerge is an unstructured, inefficient and largely dysfunctional mix of transport modes. And this, sadly, is what has happened in Pakistan.
Of particular concern is the way rail has been marginalised in favour of road transport. Over the years, many impressive multilane intercity highways have been built. Billions of rupees have been spent constructing them, and billions more are spent every year maintaining them.
Yet Pakistan does not publish an official median per capita income figure. Based on global income patterns and Pakistan’s GDP per capita – around $1,480 in 2024 and $1,820 in FY25 – the median income is likely in the range of $600 to $1,100 per year. In simple terms, even in a best-case scenario, half of Pakistan’s population lives on less than $1,100 annually.
How many of these people can buy a car to make use of our magnificent highways? A cynic would say, “Well, they can always take a bus.” And, indeed, this is what they are obliged to do. But here we run into another problem – the issue of cost, and in particular energy cost. Consider the following comparison between rail and road transport: Rail has a massive physics advantage: steel wheels on steel rails result in an extremely low rolling resistance.
A freight train requires less than one-third of the energy per tonne-kilometre compared to a truck. This is due to lower rolling resistance, better aerodynamics per unit of cargo, and the ability to move large volumes in a single consist. The same logic applies to intercity passenger rail, provided trains operate at high occupancy levels. Electrified rail systems (metros, suburban rail) are among the most energy-efficient passenger modes. Passenger buses and cars have higher per-passenger energy use unless operating at very high occupancy.
Rail also trumps road along other dimensions. Rail freight produces less than one-fifth of the greenhouse gas emissions of road freight per tonne-kilometre. Electric passenger rail systems again rank among the most efficient modes in terms of emissions.
Rail transport cost for freight can be higher than road on a per-shipment basis. But this is only the case when volumes are low. At high volumes, rail easily outcompetes road. The same argument applies to passenger transport costs. Operating costs per-passenger kilometre can only be lower when trains run at high occupancy.
Land usage in the case of rail is also much lower than road. The land needed for an up-and-down train track is a fraction of the land needed to build a dual-carriage six-lane highway. Not to mention the damage done to the environment and agriculture when forests and fields are replaced by six-lane highways.
Pakistan possesses all the characteristics that strongly favour rail over road. Almost all major cities and industrial activity lie along the Indus River basin. This basin, from Karachi to Peshawar, constitutes a natural high-density rail corridor, enabling the sort of volumes that make rail a better and cheaper alternative to road.
There is, of course, the issue of capital cost. In general, the cost per kilometre of rail is of the same order as road. Rail can be more expensive depending on other supporting infrastructure, such as stations and bridges that need to be designed to carry very heavy dynamic loads. Pakistan’s geography, demographics and economic realities all point clearly in one direction: rail should be the preferred mode of transportation. Yet, for some reason, we seem to have marginalised rail in favour of road transport.
A sensible transport policy would look very different. At the intra-city level, Pakistan’s cities are characterised by high population densities and generally low incomes. It is neither practical nor possible for everyone to own a car. Policy should, therefore, prioritise mass transit systems in all major cities. These systems would combine conventional rail, elevated rail, trams and buses. Trains should operate along high-density corridors, with trams and buses branching out to carry passengers to their final destinations.
Such systems would primarily be for people’s movement. Freight movement within cities would still have to rely mainly on trucks. And for this purpose, roads should be built to the proper standards. Trucks operating on public roads would have to comply with maximum axle load limits to prevent damage to the roads.
At the intercity level, the logic is even clearer. Given the low-income levels of most of our citizens, the only sensible system that can provide transport to most of our public at a reasonable price is rail. To this end, we need to upgrade, develop and expand our rail networks and systems to cover all major cities. Rail must be the primary mode of transportation between cities for both people and freight. The objective is to provide fast, convenient and frequent services between most urban centres.
The focus on road networks should mainly be on ‘farm to market’ or ‘farm to rail’ roads. These should be upgraded and built wherever traffic densities do not justify a rail link. Such roads are critical to our primarily agricultural economy since produce must be moved quickly to minimise loss and wastage.
Pakistan has spent enormous time and money building a road network that ultimately serves only a small minority. It is time now to put the needs of the vast majority – the poor – over the needs of the few.
The writer is chairman of Mustaqbil Pakistan and holds an MBA from Harvard Business School
Business
Ticketmaster parent Live Nation reaches settlement with Department of Justice over antitrust concerns
Signs are seen at the Live Nation NYC headquarters on May 23, 2024 in New York City.
Michael M. Santiago | Getty Images
Live Nation Entertainment has reached a settlement with the Department of Justice over antitrust concerns surrounding its Ticketmaster platform, a senior DOJ official said Monday.
The settlement would see Ticketmaster unwind some of its exclusivity agreements with musical artists and open up the ticketing industry to greater competition. It still needs approval by more than 20 states that had filed suit and by the court.
As part of the settlement, Ticketmaster will offer a standalone third-party ticketing system for other companies like SeatGeek to use its technology. Live Nation has also agreed to divest at least 13 of its amphitheaters and will no longer be able to require artists to use other Live Nation products tied to its venues. It has also agreed to pay roughly $280 million in civil penalties.
Shares of Live Nation rose 5% in morning trading. Live Nation and Ticketmaster did not immediately respond to requests for comment.
Ticketmaster has long faced criticism that its dominance in the live events and ticketing space pushes up prices for consumers. The company has come under heightened scrutiny in recent years from fans who argue that it’s become harder and pricier to snag coveted event tickets.
In 2022, the backlash boiled over when the rollout of tickets for Taylor Swift’s Eras Tour was mishandled, leading to a probe of the company. And in 2024, the DOJ — along with more than two dozen states — sued to break up Live Nation and Ticketmaster, which merged in 2010.
In September, Live Nation was separately sued by the Federal Trade Commission over what the agency called “illegal” ticket resale tactics. The FTC said Ticketmaster controls roughly 80% of major concert venues’ ticketing.
In a Monday statement, New York Attorney General Letitia James said her office would continue to fight against Live Nation’s alleged monopoly even after its agreement with the DOJ.
“The settlement recently announced with the U.S. Department of Justice fails to address the monopoly at the center of this case, and would benefit Live Nation at the expense of consumers. We cannot agree to it,” said James, who is joined by the attorneys general of more than 20 other states.
Business
How the Iran war may affect your bills and finances
The conflict in the Middle East could raise the cost of petrol, household energy bills and even food.
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Business
Oil crosses $100 mark amid Iran war as violence erupts at petrol pumps in South Asia
Oil prices surged past $115 (£86.47) a barrel on Monday as fuel shortages sparked rationing and violence in South Asia, as the Iran war continues to choke the world’s most critical energy route.
Brent crude rose to $115.31 (£86.47) a barrel, up 24 per cent from Friday’s close and the highest since 2022, as the US–Israeli war with Iran entered its second week. The Strait of Hormuz remained effectively closed to most operators.
West Texas Intermediate crude hit $116.33 (£87.41), up 28 per cent. Brent has not traded at current levels since Russia invaded Ukraine in 2022.
The surge in energy prices is causing rationing and closure of petrol stations in import-dependent South Asia.
In Sialkot, Pakistan, a man opened fire at a petrol station on Saturday after workers refused to fill jerry cans, killing one worker and critically injuring two others. Separately, a man was killed in Karachi in another fuel queue altercation.
Pakistan raised petrol prices by PKR55 (£0.15) per litre on Friday, the largest ever single increase, to PKR321 per litre, after weeks of warnings that its exposure to Hormuz-linked supply was among the highest of any emerging market.
In Bangladesh, authorities on Monday brought forward university Eid holidays as an emergency measure to cut electricity use and ease fuel pressure after Qatar suspended Liquefied natural gas (LNG) deliveries.
Officials said university campuses consume large amounts of electricity for residential halls, classrooms, laboratories and air conditioning, and the early closure would help ease pressure on the country’s strained power system.
Five of the country’s six fertiliser factories have also closed.
Bangladesh already imposed daily fuel limits last week – motorcyclists are capped at two litres, private cars at 10 – after panic buying emptied stations across the country.
“About 95 per cent of our fuel must be imported,” Bangladesh Petroleum Corporation said, urging consumers not to hoard.
Meanwhile, bigger economies are also affected. Japan said on Sunday it had instructed a national oil reserve storage site to prepare for a possible release of crude, the first such directive since 2022.
Japan holds 254 days of emergency reserves, one of the highest, but sources 95 per cent of its crude from the Middle East, with roughly 70 per cent shipped through the Strait.
India, which imports more than 88 per cent of its oil, sought to calm concerns. Oil minister Hardeep Puri said the country held “sufficient stocks” and directed all LPG (liquefied petroleum gas) refineries, public and private, to increase production.
Analysts are now warning that oil prices could exceed $150 a barrel – a level that could be catastrophic for the global economy.
“Oil prices have now gathered all the ingredients for a perfect storm,” Muyu Xu, senior oil analyst at Kpler, told Reuters. “If the disruption in the Strait of Hormuz persists for another one to two weeks, we could see prices move toward $130–150 a barrel.”
BMI, a unit of Fitch Solutions, said Pakistan and India are the most vulnerable major emerging markets, citing their energy import dependence and high exposure to Hormuz. Egypt and Turkey, it said, face the greatest risk outside the Gulf because of fragile external positions and large energy subsidies.
The shortages come as Iraq, Kuwait and the UAE cut oil production as storage tanks fill due to the reduced ability to export through the Strait.
Iran‘s parliament speaker, Mohammad Bagher Ghalibaf, warned that the war’s impact on the oil industry “would spiral” after Israeli strikes on oil depots in Tehran and a petroleum transfer terminal killed four people overnight.
Roughly 15 million barrels of crude oil, about 20 per cent of global supply, typically pass through the Strait each day, according to Rystad Energy.
The energy minister of Qatar, one of the world’s largest LNG producers, warned that it expects all Gulf energy producers to shut down exports within weeks if the Iran conflict continues.
“Everybody that has not called for force majeure we expect will do so in the next few days if this continues,” Saad al-Kaabi told FT on Friday. “All exporters in the Gulf region will have to call force majeure.”
US energy secretary Chris Wright told CNN on Sunday that gas prices would be back under $3 a gallon “before too long”, describing the spike as “a weeks, not a months thing”.
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