Transport, communication show mixed performance

The finance minister's Economic Survey 2024- 25 reveals a mixed performance in Pakistan's transport and communication sectors. While Karachi Port showed growth in cargo handling and Pakistan Railways posted higher earnings, challenges persisted. Notably, cargo at Port Qasim declined by 1.6%, and National Highway Authority (NHA) projects dropped from 123 to 105, indicating a slowdown in infrastructure development.

Transport and communication remain central to the government's development priorities, as reflected in the Public Sector Development Programme (PSDP) for FY2024- 25. An allocation of Rs161.26 billion was made for 105 NHA projects, including Rs149.28 billion for ongoing works and Rs11.98 billion for new schemes.

This marks a reduction of 18 NHA projects compared to the previous year's PSDP, which had set aside Rs156.50 billion for 123 projects. Of that, Rs99.36 billion was allocated for 68 ongoing schemes and Rs48.12 billion for 52 new ones. Three Build-Operate-Transfer (BOT) schemes were also included with a budget of Rs9.02 billion.

Currently, the NHA manages 48 national highways, motorways, and strategic roads spanning 14,480kms.

Despite fewer projects, the overall allocation rose from Rs156.50 billion to Rs161.26 billion, indicating a shift toward fewer but potentially larger or high-impact initiatives.

Pakistan Railways operates 449 locomotives over a network of 7,791kms. In July–March FY2025, gross earnings reached Rs65.17 billion, up from Rs53.7 billion in the same period last year—a notable improvement in operational revenue.

Pakistan International Airlines (PIA) recorded mixed results. The national carrier's operating revenue declined by 16.8% in CY2024 to Rs204.16 billion, down from Rs238.5 billion in 2023. However, PIA cut operating expenses by 20.8%, bringing them down to Rs194.8 billion. This cost control enabled PIA to report an operating profit of Rs9.3 billion, a rare positive despite falling revenues.

Speaking to The Express Tribune, Arif Habib Limited's Head of Research Sana Tawfik said the transport and communication sector showed moderate progress in FY2025, supported by the government's Rs268 billion development allocation. Key entities like the NHA, Pakistan Railways, and PNSC sustained operations under CPEC and regional connectivity plans, though fiscal constraints and delays limited faster growth.

Tawfik noted that consistent service across road, rail, maritime, and postal networks maintained essential connectivity. Future growth, she added, hinges on quicker execution of strategic projects aimed at cutting transport costs, digitising supply chains, and adopting energy-efficient freight solutions. She stressed that targeted investments in high-speed corridors, digital infrastructure, and cross-border trade routes are essential for improving efficiency, attracting private investment, and positioning Pakistan as a regional trade and logistics hub. The Pakistan National Shipping Corporation (PNSC) operates 10 vessels with a combined 724,634 DWT capacity. PNSC's profit fell to Rs8.98 billion during July-March FY2025, compared to Rs14.28 billion last year. The decline is attributed to a reduced fleet size, down from 12 ships last year.

Port Qasim Authority handled 33.8 million tonnes of cargo, including bulk, liquid bulk, and general cargo—in July-March FY2025, a decrease of 1.6% from 34.3 million tonnes the previous year.

In contrast, Karachi Port's cargo and container handling rose to 40.4 million tonnes in July-March FY2025, compared to 38.9 million tonnes last year, showing resilience in maritime operations.

KTrade Securities equity trader Ahmed Sheraz said the sector showed steady progress with Rs161.26 billion allocated for highways, Pakistan Railways earning Rs65.17 billion, and PIA posting a Rs9.3 billion profit. However, lower cargo handling at some ports signals trade challenges. Growth in broadcasting, with PEMRA's Rs2.1 million revenue and the expanded reach of Pakistan Broadcasting Corporation (PBC), highlights untapped potential.

PEMRA currently oversees 139 satellite TV stations and 34 channels with broadcasting rights, down slightly from 140 and 35 last year. It contributed Rs2.1 million to the national exchequer in July-March FY2025, compared to Rs2.75 million last year.

JS Global's Head of Research, Waqas Ghani, noted that Pakistan's Rs268 billion allocation for transport and communication supports the URAAN Pakistan initiative to enhance connectivity, trade, and digital access. Pakistan Railways' improved 21% year-on-year earnings reflect growing efficiency and confidence in rail transport.

PBC manages around 80 units across 32 stations. In FY2025, it received Rs6.4 billion, with 96% of funds released by March 2025 to support operations and content production.