Report

84 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
Taneja (2007) highlights the bottlenecks for rail
transportation. Currently goods move by rail by the
goods wagon or by parcel wagons that are attached to
the passenger train Samjhauta Express and rakes are
allowed to ply from some cities in Madhya Pradesh.
The features of this movement are as follows:
• Goods transported by Samjhauta Express parcel
wagons move at fixed timings on a biweekly basis.
• The same number of parcel wagons (10) move on
every trip, whether loaded or unloaded.
• There is no fixed timing for a goods train but the
trains are not allowed move across the border after
5:00 pm as security concerns are cited.
• The number of rakes/wagons that can ply from
Attari to Amritsar are determined usually on a
monthly basis.
• Under a reciprocal arrangement between the two
countries, the wagon balance has to be cleared every
10 days between the two countries.
• There is a scarcity of wagons since demand exceeds
supply. For each month from December 2006 to
March 2007, 20 rakes per month were permitted
while the demand was estimated at 1,000 rakes per
month. The scarcity leads to high transaction cost
and bribes to the tune of US$ 2.5 per tonne in India.
Pakistani traders pay a corresponding bribe of US$
1.5 per tonne.
• Goods are oftentimes stranded for as long as 20
days and sometimes the allotment of wagons takes
two months.
• Since wagon balancing takes place only thrice a
month, there is a scarcity of wagons till such time
that there is a zero balance. From the sixth day
onwards, railway authorities try to restrict the
number of wagons to be moved across the border.
• The Indian crew and engine does not move into
the Pakistani territory and vice-versa. Only the
wagons are allowed to move from one country to
another with the respective country’s engine and
crew.
• The handling capacity at Lahore is limited to 20
rakes. Thus increase in rail wagons/rakes from India
needs simultaneous increase in handling capacity
at Lahore.
• Wagons currently used are antiquated.
• There is no provision for movement of containerised
rail cargo from Amritsar and all containerised
cargo has to be moved by sea.
• Lack of space for customs house agents, poor condition
of sheds, obsolete weighing and X-ray (only
one) machines, and lack of regular communication
between rail and customs officials are additional
problems.
Exporters in Kolkata interested in exporting over
land are unable to book rail wagons and are, therefore,
forced to send shipments from/to Karachi through
transshipment at Singapore. From Karachi the goods
are transported by the land route to Lahore which
hugely increases transportation costs.
The Potential
Although recent trends show number of people crossing
the borders over land have decreased, the duty collected
by customs authorities has gone up from Rs 295,000
in 2002–03 to Rs 1.04 million in 2005–06 and Rs 2.6
million in 2006–07. Commercial trade between both
sides dealing in vegetables, meat, fruits, livestock, and
other products has reached Rs 600 million. In the period
January-October 2007, 715 trucks loaded with
Table 9.14 Route-wise Transactions Costs (TC) per Container
Costs in USD Delhi-Attari, Delhi-Attari, Delhi-Mum- Mumbai- Mum-Dubai- Mum-Karachi, Switch
Rail Road/Rail Karachi, Rail/Sea Karachi Sea Karachi, Sea Bill of Ladling
Rail/Road 325 338 460
Sea 550 550 750-950 550
Transport costs 325 338 1010 550 750-950 550
Bribe for clearances 21 32 48 26 26 26
Other bribes 45 45 200
Total Bribes 66 77 48 26 26 226
Total TC 391 415 1058 576 776-976 776
Transport time(day) 1 1 1.5 6 4 6
Delay (days) 12 12 7 7 8 10
Total time (days) 13 13 8.5 13 12 16
Source: Taneja, 2007