Incentive package for multi-axle trucks import likely

The government may announce an incentive package, including rationalisation of duty structure, for import of multi-axle trucks to improve the operational efficiency of cargo handling fleet in the country.
Sources told Business Recorder on Tuesday that a Special Task Force of Communication Ministry has recommended drastic reduction in customs duty on import of trucks in both the CKD and CBU conditions. It has been proposed to abolish 20 percent customs duty on import of trucks in CKD condition, while 60 percent duty would be brought down to 10 percent on import of trucks in CBU condition.
It has also been proposed that the domestic truck manufacturing industry should be given incentives at the import stage as well as manufacturing stage. The import of multi-axle Prime Movers/truck towers may be allowed for the first three years, while at the same time, modernisation of existing assembly units is put to gear.
Official sources said that the government would take decision on the Communication Ministry's proposal after seeking the viewpoint of the Industries and Production Ministry and other concerned departments.
According to the Task Force recommendation, the domestic truck manufacturing/assembling industry may shift to assembly needs of Multi-axle trucks of 'EURO 3' standards to meet 60 percent of the capacity progressively over the next three-five years, while weeding out the existing assembly units largely producing "aspirated engine vehicles".
There is also a need to reorganise and restructure the existing trailer and truck body fabrication/manufacturing sector (presently unregulated) through better technology and input management. The body/trailer fabrication/manufacturing sector employs over half-a-million workforce. The government in close consultation with the provinces should assist in providing standard technical designs while ensuring quality assurance standards in accordance with the laid down specifications of the truck manufacturers.
Details revealed that the Pakistan's highway infrastructure lives under a multiple overload stress reducing its life to less than half. Annual maintenance/rehabilitation bill is touching staggering proportions, causing road sector inefficiency loss of Rs 240 billion or 6.8 percent of the GDP. Highway with 10-year design life becomes unserviceable in only 18 months and is to be rehabilitated five times during the 10-year design period.
There are hosts of reasons responsible for excessive overloading on our road network. The present fleet of road transport vehicles is not sufficient to cope with the transport demand. Secondly, the truck fleet composition does not meet the demand of long haul traffic. Fierce competition among the truck owners for loads, resulting in overloading to cover the transport expenses (economic overloading). Unauthorised technical changes executed on the vehicles enabling them to carry higher weight and poor enforcement of laws.
The Communication Ministry said that the problems being faced by the transport sector are that only a few new rigid trucks from Hino and Nissan (2 axle and 3 axle) are assembled in Pakistan. Most of the transport fleet is using local body maker to convert old buses/dump trucks in 2-Axle trucks or they are strengthening the old junk frame, suspension, and enlarging volumetric loading capacity.
Imported used dumpers are modified as rigid or articulated trucks, which cater to the overloading. Non-availability of bank loans with long-term discounted interest rates and lack of proper share distribution between road/railway in terms of freight sharing also compounds the problem.
The road transport fleet comprises over 180,000 trucks with 2-axle trucks 67 percent, 3-axle trucks, 8 percent and articulated trucks, 25 percent. This fleet composition is largely obsolete with inefficient under-powered trucks that perpetuate uneconomical operations.
The rationalisation of trucking fleet to balance its composition as an essential component of a "fleet replacement and modernisation strategy", therefore, assumes a high priority, the Communication Ministry added.