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Transport, Storage and Communication Industry

Transport, Storage and Communication Industry

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Published by i8kuki
Summarizing content from Economic Survey Of Pakistan for FY08-09 for Transport, Storage and Communication Industry of Pakistan.
Summarizing content from Economic Survey Of Pakistan for FY08-09 for Transport, Storage and Communication Industry of Pakistan.

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Published by: i8kuki on Mar 14, 2010
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Table 1.2: Growth Performance of Components of Gross National Product(% Growth At Constant Factor Cost)
Services Sector
Transport,Storage andCommunication
Transport, Storage and Communication
sub-sector depicted a sharpdeceleration in growth to 2.9 % in 2008-09 as compared to 5.7 % of last year.Value added in this
is based primarily on the profits and losses of Pakistan Railways, Pakistan International Airlines and other airlines, PakistanPosts & Courier Services, Pak Telecom and motor vehicles of different kindson the road. Mechanized road transport has depicted a growth of 2.9 %,followed by road transport (6.4 %), communication sector (3.6 %) andstorage (2.7 %). The value addition of Pakistan Railways has declined by 6.4%. Other sectors that showed a decline are; air transport (2.1 %) and pipelinetransport (8.0 %).Source: Economic Survey of Pakistan 2008-2009 – Chapter 01: Growth andInvestment –www.finance.gov.pk/admin/images/survey/chapters/01-Growth09.pdf  
Value addition in
transport storage &communication
sector grew by 2.9 percentduring FY09, significantly lower than 4.5 percent target for the year. The higher growth target for FY09 was set amid prospects of continuation in buoyantgrowth in communication and someimprovement observed in air transport bythe end of FY08.However, communication sector (bothmobile and fixed line) exhibited a lower than expected growth in FY09 and prospects of positive contribution in valueaddition from air transportation were alsonot realized. Water and road transport alsocould not keep up the pace of FY08. As aresult, overall
transport, storage &communication
sector posted a weaker growth during FY09 relative to target andactual growth seen last year (see
Transport and storage
VA in transport consists of aggregate of VA from air transportation, ports and shipping, pipelinesand mechanized and non-mechanized road transportation. In FY09, overall transportation posteda growth of 2.7 percent, compared with 2.2 percent growth in FY08. VA in transport in FY08 washeld back due to sharp deceleration in water and road transport and a continued decline inrailways, airlines and pipeline transport (see
Figure 2.40
Aggregate cargo handling activities witnessed a marginal decline in FY09 as a sharp fallin imports was largely offset by a strong surge in cargo handling of exports (see
). While cargohandling at KPT witnessed a slight increase, it fell at PQA during FY09. Specifically,KPT handled cargo volume of 38.7 million tons in FY09, up by 4.4 percent. DuringFY09, cargo handling at PQA dropped by 5.3 percent. It is important to note here that theexpansion in the existing port facilities as well as rising activities at Gwadar suggest thatthe growth in water transport and storage would see strong growth going forward. Inaddition, storage activities in FY09 were positively impacted by increase in warehousingservices for agricultural produce (mainly wheat, sugar and rice) and build up of fertilizer inventories in FY09.
In contrast to increased activities in shipping, port and air transport, value addition from PakistanRailways (PR) declined further in FY09. Aggregate revenue of Pakistan Railways increased by25 percent in FY09, however increase in total expenditure was greater than increase in revenues.Considerable decline in development spending in PR in FY09 was major reason holding back administrative reorganization in FY09. Pakistan Railways did not manage to curtail totalexpenditures even in the backdrop of declining fuel prices in FY09. Resultantly even after exhibiting increase in both freight and passenger traffic in FY09, VA from Pakistan Railwaysended up in negative.
Value addition in communications emanates mainly from cellular, fixed (land) lines, postal andcourier services. Mobile communication has exhibited significant growth in recent years and their contribution is about two-third of the total growth in transport, storage and communications inFY08. This strong growth was aided by inflow of foreign investment, growth in franchisingservices and the obvious fact that aggressive initiatives of mobile services providers were aimedat capturing the untapped market potential up to FY08. Cellular density as a percent of total population grew from 6.25 percent in July-2004 to 60.3 percent of the population by June 2009.

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