Asia, China, CNG crisis, CNG sales, collateral, commercial loan policies, cost-effective public transport, domestic industrial uses, ethanol, fastest growing CNG-using country, foreign investors, Government of Pakistan, greater efficiency, importing CNG buses, investor confidence, Karachi, law and order situation, liberal CNG use and licensing policy, loans, local production, lower emissions, Mazhar M Chinoy, Pakistan, Punjab, subsidy, traffic congestion, transporters
In 2008, the Government of Pakistan hit upon the idea of importing CNG buses from China to ease traffic congestion and offer quality, cost-effective public transport. At the time, investor confidence in CNG was high; Pakistan was the fastest growing CNG-using country in Asia, with a liberal CNG use and licensing policy, and was therefore ideally placed to benefit from this import.
The Government announced that a subsidy of five billion rupees would be offered to transporters as loans to import these buses. The cost of each bus was estimated to range between 2.5 and three million rupees; the transporter would only have to pay the principal amount (in instalments), while the Government would dole out the mark-up. It was expected that 8,000 CNG buses would ply Pakistani roads by 2013, half of these in Karachi. Yet, the reality turned out to be vastly different.
At the outset, the Government transferred approximately Rs 500 million to the banks. However, as per commercial loan policies, the banks asked investors for collateral which drew them back in droves. The Government tried to entice foreign investors, but Pakistan’s law and order situation was a big deterrent. As a result, only Punjab has been able to import a significant number of these buses. Of the 56 purchased in 2011, only a few ply the roads today.
The final blow to the project was the CNG crisis. In an inexplicable turnaround, the Government clamped down on CNG sales for vehicles. Presently, with domestic and industrial uses a priority, CNG for public transport is severely limited and likely to be phased out.
So what does the future hold? Buses that run on ethanol may be the answer, as the benefits include lower emissions, greater efficiency and greater possibility for local production. However, that too only if the Government gets its policies right and keeps the country’s interests in the forefront.
– Mazhar M Chinoy
First published in the Adbuzzzz Section of The DAWN National Weekend Advertiser on May 5, 2013.