Agreed. This is a country for whom $6 billion is just small pocket change. Here is interesting fact. USA gave Western Europe $17 billion in aid as part of Marshall Plan over 5 years from 1948 onwards. That is over $202 billion dollars in todays money.
$202 billion
Compared that with poxy $6 billion and even that is loan and the whole sticking point is over whether repayments are 2% or less. After recieving this injection of over $200 billion Western Europe had recovered from the war by 1952 and was booming. The benefit to USA has been Western Europe has been a stalwart ally, prosperous and can help Washington. Food for thought for Chinese. If they pumped $200 billion into Pakistan they would have a solid, prosperous and strong ally on their southern flank.
President Harry Truman signed the Marshall Plan on April 3, 1948, granting $5 billion in aid to 16 European nations. During the four years the plan was in effect, the United States donated $17 billion (equivalent to $202.18 billion in 2019) in economic and technical assistance to help the recovery of the European countries that joined the Organisation for European Economic Co-operation. The $17 billion was in the context of a US GDP of $258 billion in 1948
Western Europe had a very stable business environment and good management culture prior to the war. West German chancellor Konrad Adenauer’s practical foreign policy and forward looking economic policies made a huge difference as compared to the less business friendly policies of Charles de Gaulle.
If the Chinese invested into a few key industries and provided help to local companies and R&D facilities would indeed go along way to creating a stable strong power on its south western border.
They can built pipelines from the gulf Arab countries (through an undersea pipeline) and Iran through Pakistan, with sustainable brutality payment to Pakistan, it would create a stable albeit modest income stream similar to the Suez canal for Egypt. Royalty payment in a mix of cash and oil/gas would also help build up the petrochemical industry. Chinese Investment into the agricultural sector would go along way to grow high yield crops; process to make high value added items, for export to China and the rest of the world. Help in setting up tourism appealing to a wide global audience would also go far in attracting revenue. $200 billion in FDI would pay dividends for China, even if amortized over 20 years.
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On the issue of raising funding for the railways; focus on the stations. For the initial phase; start with Peshawar to Lahore. At Peshawar, Islamabad/Rawalpindi and Lahore rebuild the station into a destination onto itself. Railway stations around the world have always had their own hotel as well as sometimes a mini-resort or shopping mall. There is no reason, this same model could jot be done in Pakistan. International travelers and overseas Pakistanis may also find a hotel at the city’s train station a more “known” factor and a more “comfortable” jumping off point to go explore the city or venture further. Longer stays of a week or weeks could also help bring in business.
Also the train station should be turned into multimodal hubs, where all the cities bus terminals in the general area are rebuild as a part of the train station. This train/bus station should also have a connection with the local metro bus/train system. Guaranteed contracts for business to the hotel can also be a way to guarantee the venture will raise revenue. Restrictions on competition (such as for another mall or hotel) within some fixed radius (1-2 km) will also ensure business will flow to this area.
another key way to raise revenues is to have contracts for commodities warehouses and warehousing goods transported by rail instead of by truck. Land in an around stations or in key pouts along the route can help in this regard. Being the most efficient logistics company in Pakistan; as the multimodal hub for shipping; either by rail or road will help this supporting enterprise revolutionize supply chains in the country. These warehouses could also be home to data centers and the train routes could also be routes for high speed internet through fiber optics, another business opportunity. Rail routes could also make up a much more affordable shared commuter rail system; over dedicated metro-trains and the rail company could lease time on the tracks to private or municipal commuter rail companies to generate revenue.
All of this will help raise more than enough funds to run a profit for the hotel/station and fund the construction of the tracks in between.
Phase 2 should be Karachi to Hyderabad, so give travelers to the south of the country quicker service and the second best hub to raise revenue. With these two phases up and running, the network can be extended further as the funds come in. Stations/hotels in cities between Lahore and Hyderabad could be build in anticipation of the increase in business coming their way, and a way to get the investors to get some returns before some of it has to go into railway construction.
Key bridges in between Hyderabad and Lahore could be rebuilt, Grade separations put in place at major intersections, and realigning the route in key places could be done ahead of laying down major sections of new track.
They key to world class infrastructure like that transit hubs I mention, are to create a “
downtown” that would attract global companies and global workers (such as IT businesses) to generate revenue that wouldn’t have otherwise been generated there, and take the burden off the public as well as creating a cycle of induced demand. these downtowns could also be the place foreign companies, especially Chinese companies could make their local headquarters, and through use of the amenities and transportation; such as commuter rail, work downtown and commute to a nice house/apartment in DHA or Bahria Town or a more modest neighborhood.
For instance; The Peshawar-Lahore corridor could also be a safe spot for foreign companies looking to set up offices if they enter the National or regional mining and agricultural sectors, but may not want to be based away from amenities and in areas that maybe a bit more volatile at times, even if business is booming.
Attract the wealthy, attract top talent, and create improved efficiency in current businesses and you’ll have an eco-system that will support/subsidize the less profitable passenger rail. Also don’t for get to factor in retired overseas Pakistanis; with disposable income and for those that return, sightseeing amenities/tourism (world class dining) can create the greatest advocates for their extended network of Pakistani and non-Pakistani friends to visit and spend.
Mae need to leverage economies of scales across as many sectors as possible to generate interest in getting the best loan offers from multiple options and pick the terms and conditions that work for Pakistan.
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a feasibility study with cost estimates for the entire route should be done. Then options opened up for investors on terms and conditions for each section. If the business that help fund the railway have a solid basis, even overseas Pakistanis maybe willing to put up the funding (at least for the most profitable parts) if they know they will get a better ROI then real estate. The government could slowly connect the less profitable parts as it is doing with the motorway network.
