Last week Prime Minister Imran Khan virtually laid the foundation of the 103-kilometer Nokundi-Mashkhel road from the convenience of the PM secretariat. This road is part of the wider Mashkhel-Panjgur Road, which will connect N-40 highway with N-85 highway and M-8. The government claimed that this road will be completed in two years. However, data available with the Public Sector Development Program (PSDP) 2020-21 hints that it will take longer.
Building the Nokundi-Mashkhel road is important for economic connectivity in the region. However, it is not enough to address the wider highway connection needs of Balochistan, which makes up almost half of the landmass of Pakistan.
Balochistan is in dire need of a proper motorway. The biggest service that the PTI government can do for Balochistan is to develop, from its own resources, a motorway in the province connecting Chaman to Quetta to Karachi.
Currently, there are proper motorways in three other provinces. New motorways are also under construction in all provinces, except Balochistan. There is a motorway in Balochistan’s Makran region called M-8, but by name only. Starting from Naliant, near Gwadar, M-8 comprises a 193-km patch till Hoshab. It is a single carriage highway with two narrow lanes without a divider. It is not accurate to call this strip of asphalt a motorway.
Recently, there has been a surge in popular demand in Balochistan to dualize the Chaman-Quetta-Karachi highway. The reason is that because of this killer highway, more people in Balochistan die in highway accidents than acts of terrorism. In order to pacify this demand of the people and score some political mileage, the federal government announced to dualize the aforementioned highway using Build Operate and Transfer (BOT) mode. The provincial government also hailed this decision and tried to politically capitalize on it.
The BOT is a method of financing and building highways where a private company makes all the investment. Then, this company will be given the right to collect toll tax on this highway for a certain number of years till it has recovered its profit and initial cost. Detailed technical calculations performed by this scribe showed that dualizing this highway using BOT is not feasible.
Results of the calculations showed a payback period of 30 years from the date of the start of dualization work on this highway. According to government estimates, 8,000 vehicles on average use the Chaman-Quetta-Karachi highway on a daily basis. We assume the volume of traffic will increase by five percent per year on a compounding basis and the highway will be operational for traffic from the fourth year. Moreover, we assume that the average toll tax is set at Rs2,000 for the complete stretch of the highway, which will be increased by five percent annually on a compounding basis.
Based on these calculations, this project will earn Rs982 billion in toll tax over 30 years. By comparison, the future value of the initial investment of the project is Rs1,262 billion. This means that even by underestimating the costs and overestimating the returns, this project will generate losses of Rs280 billion in terms of future value. In other words, dualizing the Chaman-Quetta-Karachi highway is not possible using the BOT model.
It is pertinent to mention here that the federal government missed the opportunity of the China-Pakistan Economic Corridor (CPEC) to develop a motorway in Balochistan. CPEC was helpful in developing motorways in other provinces. For instance, CPEC funds were used to build the Sukkur-Multan section of the Karachi-Peshawar motorway at a cost of Rs298 billion. About 90 percent of the work on this project has been completed. Similarly, Phase 2 of Karakoram Highway from Havelian to Thakot is being developed at a cost of Rs136 billion under CPEC. Nearly 80 percent of the work on this project has already been completed. However, the former government completely ignored Balochistan during the allocation of CPEC infrastructure funds.
Furthermore, the federal government uses the excuse of resource constraints when it comes to establishing a motorway in Balochistan or even to dualize the Chaman-Quetta-Karachi highway. According to estimates, the aforementioned highway will cost Rs300 billion. This is not a huge amount in the context of other highway projects funded by the federal government. For instance, the federal government is pumping Rs112 billion for the construction of the motorway from Burhan-Hakla to Dera Ismail Khan. Likewise, Rs156 billion is the total cost of only the Lahore-Multan section of the Karachi Lahore motorway. If the federal government can allocate such sums of money for these projects, then why not for a motorway in Balochistan, which will be the lifeline of the economy of the impoverished province?
There is no justifiable reason which prevents the federal government from approving a motorway connecting Chaman to Karachi via Quetta. If built, this motorway could be the real game-changer for Balochistan.
Jam Kamal’s government must persuade the federal government to approve and immediately start working on this motorway in the best interests of the people of the province. If the demand for a motorway is not accepted by the federal government, then all other small projects will be mere eyewash.
The writer is a journalist and researcher. He can be reached on Twitter: @iAdnanAamir
Building the Nokundi-Mashkhel road is important for economic connectivity in the region. However, it is not enough to address the wider highway connection needs of Balochistan, which makes up almost half of the landmass of Pakistan.
Balochistan is in dire need of a proper motorway. The biggest service that the PTI government can do for Balochistan is to develop, from its own resources, a motorway in the province connecting Chaman to Quetta to Karachi.
Currently, there are proper motorways in three other provinces. New motorways are also under construction in all provinces, except Balochistan. There is a motorway in Balochistan’s Makran region called M-8, but by name only. Starting from Naliant, near Gwadar, M-8 comprises a 193-km patch till Hoshab. It is a single carriage highway with two narrow lanes without a divider. It is not accurate to call this strip of asphalt a motorway.
Recently, there has been a surge in popular demand in Balochistan to dualize the Chaman-Quetta-Karachi highway. The reason is that because of this killer highway, more people in Balochistan die in highway accidents than acts of terrorism. In order to pacify this demand of the people and score some political mileage, the federal government announced to dualize the aforementioned highway using Build Operate and Transfer (BOT) mode. The provincial government also hailed this decision and tried to politically capitalize on it.
The BOT is a method of financing and building highways where a private company makes all the investment. Then, this company will be given the right to collect toll tax on this highway for a certain number of years till it has recovered its profit and initial cost. Detailed technical calculations performed by this scribe showed that dualizing this highway using BOT is not feasible.
There are proper motorways in three other provinces. New motorways are also under construction
Results of the calculations showed a payback period of 30 years from the date of the start of dualization work on this highway. According to government estimates, 8,000 vehicles on average use the Chaman-Quetta-Karachi highway on a daily basis. We assume the volume of traffic will increase by five percent per year on a compounding basis and the highway will be operational for traffic from the fourth year. Moreover, we assume that the average toll tax is set at Rs2,000 for the complete stretch of the highway, which will be increased by five percent annually on a compounding basis.
Based on these calculations, this project will earn Rs982 billion in toll tax over 30 years. By comparison, the future value of the initial investment of the project is Rs1,262 billion. This means that even by underestimating the costs and overestimating the returns, this project will generate losses of Rs280 billion in terms of future value. In other words, dualizing the Chaman-Quetta-Karachi highway is not possible using the BOT model.
It is pertinent to mention here that the federal government missed the opportunity of the China-Pakistan Economic Corridor (CPEC) to develop a motorway in Balochistan. CPEC was helpful in developing motorways in other provinces. For instance, CPEC funds were used to build the Sukkur-Multan section of the Karachi-Peshawar motorway at a cost of Rs298 billion. About 90 percent of the work on this project has been completed. Similarly, Phase 2 of Karakoram Highway from Havelian to Thakot is being developed at a cost of Rs136 billion under CPEC. Nearly 80 percent of the work on this project has already been completed. However, the former government completely ignored Balochistan during the allocation of CPEC infrastructure funds.
Furthermore, the federal government uses the excuse of resource constraints when it comes to establishing a motorway in Balochistan or even to dualize the Chaman-Quetta-Karachi highway. According to estimates, the aforementioned highway will cost Rs300 billion. This is not a huge amount in the context of other highway projects funded by the federal government. For instance, the federal government is pumping Rs112 billion for the construction of the motorway from Burhan-Hakla to Dera Ismail Khan. Likewise, Rs156 billion is the total cost of only the Lahore-Multan section of the Karachi Lahore motorway. If the federal government can allocate such sums of money for these projects, then why not for a motorway in Balochistan, which will be the lifeline of the economy of the impoverished province?
There is no justifiable reason which prevents the federal government from approving a motorway connecting Chaman to Karachi via Quetta. If built, this motorway could be the real game-changer for Balochistan.
Jam Kamal’s government must persuade the federal government to approve and immediately start working on this motorway in the best interests of the people of the province. If the demand for a motorway is not accepted by the federal government, then all other small projects will be mere eyewash.
The writer is a journalist and researcher. He can be reached on Twitter: @iAdnanAamir