ESCAP is the regional development arm of the United ... · ii Review of Developments in Transport...

ESCAP is the regional development arm of the United Nations and serves as the main economicand social development centre for the United Nations in Asia and the Pacific. Its mandate is tofoster cooperation between its 53 members and 9 associate members. ESCAP provides thestrategic link between global and country-level programmes and issues. It supportsGovernments of the region in consolidating regional positions and advocates regionalapproaches to meeting the region’s unique socio-economic challenges in a globalizing world.The ESCAP office is located in Bangkok, Thailand. Please visit our website at www.unescap.orgfor further information.

The shaded areas of the map represent ESCAP members and associate members.

Part Two ---- IV. Urban Transportation i

New York, 2011

REVIEW OF DEVELOPMENTS INTRANSPORT IN ASIA AND THE PACIFIC

2011

ii Review of Developments in Transport in Asia and the Pacific 2005

Acknowledgements: This document was prepared by the Transport Division of ESCAP with data inputs,research and analysis contracted from GHD Pty., Limited.

The designations employed and the presentation of the material in this publication do not imply theexpression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning thelegal status of any country, territory, city or area or of its authorities, or concerning the delimitation of itsfrontiers or boundaries. Mention of firm names and commercial products does not imply the endorsementof the United Nations.

The term “ESCAP region” is used in the present document to include Afghanistan; American Samoa;Armenia; Australia; Azerbaijan; Bangladesh; Bhutan; Brunei Darussalam; Cambodia; China; Cook Islands;Democratic People’s Republic of Korea; Fiji; French Polynesia; Georgia; Guam; Hong Kong, China; India;Indonesia; Islamic Republic of Iran; Japan; Kazakhstan; Kiribati; Kyrgyzstan; Lao People’s DemocraticRepublic; Macao, China; Malaysia; Maldives; Marshall Islands; Micronesia (Federated States of);Mongolia; Myanmar; Nauru; Nepal; New Caledonia; New Zealand; Niue; Northern Mariana Islands;Pakistan; Palau; Papua New Guinea; Philippines; Republic of Korea; Russian Federation; Samoa;Singapore; Solomon Islands; Sri Lanka; Tajikistan; Thailand; Timor-Leste; Tonga; Turkey; Turkmenistan;Tuvalu; Uzbekistan; Vanuatu; and Viet Nam. The term “developing ESCAP region” excludes Australia,Japan and New Zealand. The term “Central Asia” in this publication refers to Armenia, Azerbaijan, Georgia,Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

The term “billion” signifies a thousand million.

Unless otherwise stated, current United States dollars have been used throughout.

This publication has been issued without formal editing.

REVIEW OF DEVELOPMENTS INTRANSPORT IN ASIA AND THE PACIFIC 2011

United Nations publicationSales No. E.12.II.F.8Copyright © United Nations 2011All rights reservedManufactured in ThailandISBN: 978-92-1-120642-5e-ISBN: 978-92-1-055352-0ST/ESCAP/2623

Contents iii

CONTENTS

Page

ABBREVIATIONS ............................................................................................................................ vii

I. INTRODUCTION: TRANSPORT DEVELOPMENT PROSPECTS AGAINSTA BACKDROP OF ECONOMIC UNCERTAINTY ...................................................... 1

II. RAILWAYS .......................................................................................................................... 13

A. National Railway Sector Development ........................................................................ 13B. Railway Traffic Trends ................................................................................................. 15C. Rail Services ................................................................................................................. 19D. Trans-Asian Railway Network Development ............................................................... 23E. Selected Investment Projects in the Railway Sector .................................................... 29

III. ROADS AND HIGHWAYS ............................................................................................... 35

A. National Road Sector Development ............................................................................. 35B. Road Vehicle Fleets and Motorization Trends .............................................................. 37C. Road Freight ................................................................................................................. 40D. Asian Highway Network Development ....................................................................... 42E. Selected Investment Projects in the Road Sector ......................................................... 45

IV. MARITIME PORTS AND DEVELOPMENTS IN SHIPPING .................................. 51

A. Trends in Maritime Trade ............................................................................................. 51B. Container Port Throughput ........................................................................................... 54C. Shipping Trends ............................................................................................................ 57D. Selected Investment Projects in Maritime Ports ........................................................... 62

V. DRY PORTS, INTERMODAL TERMINALS AND LOGISTICSDEVELOPMENT ............................................................................................................... 67

A. Development of Dry Ports and Intermodal Terminals in the ESCAP Region .............. 67B. Logistics Development in the ESCAP Region ............................................................. 74

VI. FACILITATING TRANSPORT ACROSS BORDERS ................................................. 81

A. Implementation of International Conventions and Agreements Relating to TransportFacilitation and the Movement of Goods and Services across Borders ....................... 81

B. Subregional Approaches to Transport Facilitation ....................................................... 85

VII. SAFE AND SUSTAINABLE TRANSPORT ................................................................... 91

A. Road Safety .................................................................................................................. 91B. Sustainable Transport Development ............................................................................. 103

iv Review of Developments in Transport in Asia and the Pacific 2011

List of Tables

I-1 Annual GDP growth rates (%) for ESCAP, 2002-2011 ........................................................ 2

I-2 Direction of exports for selected economies and subregions (percentage share),2000-2009 ............................................................................................................................. 3

I-3 Number and value of PPI projects in the transport sector of ESCAP developingcountries, by investment type, 1990-2010 ............................................................................ 7

II-1 Railway route length (excluding branch lines) and most common track gauge in selectedESCAP countries .................................................................................................................. 13

II-2 National rail route-kilometres-to-area ratio – top and bottom five countries ....................... 14

II-3 National rail route-kilometres-to-population ratio – top and bottom five countries ............. 14

II-4 Electrified route-kilometres in member countries ................................................................ 15

II-5 Trends in railway freight tonnage in the ESCAP region....................................................... 16

II-6 Trends in railway freight traffic task (tonne-km) in the ESCAP region ............................... 17

II-7 Overview of the Trans-Asian Railway.................................................................................. 25

II-8 Missing links in the Trans-Asian Railway network .............................................................. 25

II-9 Breaks-of-gauge on the Trans-Asian Railway ...................................................................... 28

II-10 Selected railway infrastructure development projects in the ESCAP region (as of 2011) ... 30

III-1 Road lengths and road densities, various countries .............................................................. 36

III-2 Growth of road freight task in selected ESCAP countries (per cent per annum) ................. 42

III-3 Selected road and highway investment projects in the ESCAP region ................................ 45

IV-1 Port container throughput in selected ESCAP economies and ports, 1990-2010 ................. 55

IV-2 Capacity of merchant fleets registered in the ESCAP region, 1980-2010 ............................ 58

IV-3 Selected port infrastructure projects in the ESCAP region (as of end 2011) ........................ 63

V-1 Inland container handling facilities in the Republic of Korea .............................................. 72

V-2 Dry Ports in Malaysia ........................................................................................................... 72

V-3 Change in ease of trade across borders, 2006-2011 .............................................................. 79

V-4 Government regulations and industry self regulations for freight forwarders ...................... 80

VI-1 Status of accession of ESCAP Regional Members to the International Conventions listedin Commission resolution 48/11, as of 30 November 2011 .................................................. 82

VI-2 Summary of GATS progress on matters related to transport and logistics, 2011 ................. 84

VII-1 ESCAP Road Safety Goals, Targets and Indicators for the Decade of Action ..................... 97

VII-2 Overview of types of measures being implemented by ESCAP member states ................... 100

VII-3 Recent Road Safety Initiatives in ESCAP member States .................................................... 100

VII-4 Air Quality Standards – Selected ESCAP Economies (µg/m3) ............................................ 107

VII-5 Fuel standards in selected ESCAP countries ........................................................................ 109

VII-6 Measures to improve urban air quality ................................................................................. 111

VII-7 Selected recent rail mass transit developments in the ESCAP region .................................. 112

VII-8 Bus Rapid Transit (BRT) projects in the ESCAP region ...................................................... 114

VII-9 Urban Policies promoting the use of Bicycles ...................................................................... 117

CONTENTS (continued)Page

Contents v

List of Figures

I-1 Annual GDP growth rates for the selected regions and countries, 2000-2011 ..................... 1

I-2 Comparison of movements in trade value with selected price indices, 2006-2011 .............. 4

I-3 Principal regional trade agreements involving ESCAP member states ................................ 5

I-4 Annual number of infrastructure projects with private participation in ESCAP developingcountries, 1990-2010 ............................................................................................................ 6

I-5 Value of Transport Sector PPI projects in ESCAP developing countries, million US$,1990-2010 ............................................................................................................................. 7

I-6 Value of transport PPI projects by subregion, 1990-2010 .................................................... 8

I-7 Geographic location of transport sector PPI projects in developing ESCAP membercountries (share of the investment from 1990 to 2010) ........................................................ 8

I-8 Comparison of return on infrastructure investment and return on government bonds,selected Asian economies and the USA ................................................................................ 10

II-1 Average freight haul distances (kilometres) in the ESCAP region ....................................... 18

II-2 Commodity composition of rail freight, selection ESCAP economies ................................. 19

II-3 Map of the Trans-Asian Railway Network (2011) ............................................................... 24

III-1 Annual average growth in road length in selected ESCAP countries ................................... 35

III-2 Average annual growth in the number of road vehicles, 1993-2008 .................................... 38

III-3 Vehicle density in selected ESCAP economies, 2007-2008 ................................................. 39

III-4 Motorization rates in selected economies of the ESCAP region, 2005-2008 ....................... 40

III-5 Actual and forecast growth of road freight volumes in selected countries of the region,2006-2015 ............................................................................................................................. 41

III-6 Road freight task in selected ESCAP countries .................................................................... 41

III-7 Map of the Asian Highway Network (2011) ......................................................................... 43

III-8 Asian Highway network by country, 2010 ........................................................................... 44

III-9 Quality improvement of Asian Highway, 2004-2008 ........................................................... 45

IV-1 Growth of world maritime trade (1985-2010) ...................................................................... 51

IV-2 D eveloping Asia’s share of global maritime volumes, 2009................................................ 52

IV-3 World and ESCAP Container Port Throughput Growth (1973-2010) .................................. 52

IV-4 Distribution of global port container volumes, 1973-2010................................................... 53

IV-5 Distribution of container port volumes within ESCAP, 1973-2010 ..................................... 54

IV-6 Increase in containership size (1980-2010) .......................................................................... 59

IV-7 Developments in the numbers of container vessel numbers and their average size,1988-2010 ............................................................................................................................. 60

IV-8 Share of top twenty shipping lines (as of 28 September 2011) ............................................ 61

IV-9 Productivity of the world merchant fleet, 1980-2009 ........................................................... 62

V-1 Existing and planned major intermodal terminals in China ................................................. 69

V-2 Container throughput at ICDs operated by CONCOR 1995-2009 ....................................... 70

V-3 Throughput of Indonesia’s major dry ports, 2008 ................................................................ 71

V-4 Throughput at Birgunj Dry Port ............................................................................................ 73

V-5 World Bank Logistics Performance Index – Selected ESCAP economies ........................... 76

V-6 Relative ease of trading across borders, 2011 ....................................................................... 77

VII-1 Fatality rate per 100,000 population in selected ESCAP countries, 2007 ............................ 92

VII-2 Fatality rate per 10,000 vehicles in selected ESCAP countries, 2007 .................................. 93


vi Review of Developments in Transport in Asia and the Pacific 2011


VII-3 Relationship between road fatalities and per capita income, selected ESCAP countries,2007 ...................................................................................................................................... 94

VII-4 Road fatalities by road user class, selected ESCAP countries, 2007 .................................... 95

VII-5 Change in road fatalities in selected ESCAP countries, 2007-2009 ..................................... 95

VII-6 Mean and variability of enforcement effectiveness, selected ESCAP countries, 2009 ........ 103

VII-7 Sources of global greenhouse gas emissions in 2005 ........................................................... 104

VII-8 Geographical distribution of urban air pollution .................................................................. 105

VII-9 Air Quality in Asia: Average annual ambient AQ levels, 1993-2009 ................................... 106

VII-10 Pedestrian mode share in Asian Cities .................................................................................. 116

VII-11 “Attack points” in reducing the environmental impact of urban freight transport ............... 118

Contents viiAbbreviations vii

ABBREVIATIONS

ADB Asian Development BankADF Agence Française de DéveloppementAH Asian HighwayASEAN Association of South East Asian Nations

BOT build-operate-transfer (scheme)

CAGR compound annual growth rateCAI-Asia Clean Air Initiative for Asian CitiesCAREC Central Asia Regional Economic CooperationCH

4methane

ECE Economic Commission for EuropeECO Economic Cooperation Organization

GATS General Agreement on Trade in ServicesGATT General Agreement on Tariffs and TradeGDP gross domestic productGMS Greater Mekong SubregionGRSP Global Road Safety Partnership

HFCs hydrofluorocarbons

ICC Import Commodity ClearanceICD inland container depot

km kilometre

NMT non-motorized transportN

2O nitrous oxide

OECD Organisation for Economic Co-operation and Development

ppm parts per millionPPP public-private partnership

RTAs Regional Trade Agreements

SAARC South Asian Association for Regional CooperationSF

6sulphur hexafluoride

SPM suspended particulate matter

TAR Trans-Asian RailwayTEU twenty-foot equivalent unit (container)TRACECA Transport Corridor Europe-Caucasus-Asia

UNCTAD United Nations Conference on Trade and Development

WHO World Health OrganizationWTO World Trade Organization

viii Review of Developments in Transport in Asia and the Pacific 2011

I. Introduction: Transport Development Prospects Against a Backdrop of Economic Uncertainty 1

I. INTRODUCTION: TRANSPORT DEVELOPMENT PROSPECTS AGAINSTA BACKDROP OF ECONOMIC UNCERTAINTY

Changing growth prospects amidst dampening global demandfor Asian exports

The downturn in the global economy due to the global financial crisis of 2009 has had a significantimpact on the transport sector across the Asia and Pacific region. Whereas prior to the global financialcrisis, the world enjoyed a period of exceptionally strong economic growth (Figure I-1), by 2008 theslowdown that had begun in the USA had extended to all of the major economies. Developed countrieswere particularly hard hit, with growth turning negative in Japan and the USA, and falling to below 1 percent in the European Union. In line with the downturn in the global economy, growth rates in the ESCAPregion also began to decline in 2008 and slumped sharply in 2009, although most groups of countriesrebounded in 2010.

Figure I-1. Annual GDP growth rates for the selected regions and countries, 2000-2011

Source: Derived from data in IMF, World Economic Outlook October database (http://www.imf.org), accessed on 22 September 2011.

Notes: 2010 figures are estimates, 2011 figures forecasts.

Pe

r c

en

t G

DP

Gro

wth

(c

on

sta

nt

pri

ce

s)

10

-5

0

5

10

15

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

World USA European Union

Japan Newly Industrialized Asian Economies Emerging and developing economies

China India

However, the impact has been uneven between subregions and across countries. As shown inTable I-1, the most severe decline was in the high income countries, with the contraction in Japanparticularly sharp (6.3 per cent). By contrast, the group of low income countries maintained growth rates of6 per cent throughout the crisis period, and China and India are among the few nations that continued torecord positive growth. However, in line with global tends, growth is 2011 has been moderate, with thelatest IMF forecast set at a below trend value of 6.0 per cent.

Table I-1 also shows that there are significant differences between subregions. The strongperformance of the East and North-East Asian subregion has been driven almost entirely by China, whichcontinued to grow at around 10 per cent through the crisis and is forecast by the IMF to continue to grow atabove 9 per cent through to 2016. On the other hand, North and Central Asia, which consists of many majorcommodity exporters, experienced very strong growth from 2005 through to 2007, but then began to

2 Review of Developments in Transport in Asia and the Pacific 2011

decline in 2008 and fell further in 2009. Turkmenistan recovered very strongly in 2010 and maintainedstrong growth through 2011, while the Russian Federation recovered reasonably well, but economic growthremains well below pre-crisis levels while IMF forecasts suggest that this is likely to continue through to2016.

Despite the downturn in global demand, all of the economies in South-East Asia returned topositive growth in 2010, with the economy of Singapore – one of the ASEAN nations hardest hit in 2009 –achieving growth of 14.5 per cent. In the South and South-West Asian subregion, India’s economy has beenthe main driving force: the impact of the crisis on the Indian economy was comparatively mild, with growthremaining at over 6 per cent in 2008 and 2009, before recovering to over 10 per cent in 2010. However,other countries in both South-East and South and South-West Asia experienced severe natural disasters overthe 2010-2011 period, most notably the flooding in Thailand and Pakistan, while the slowdown in theEuropean and North American markets are expected to put further downward pressure on export growthfrom these subregions.

Meanwhile, the economic growth patterns of the economies in the Pacific ranged from those whichmaintained fairly robust growth, such as Australia, Papua New Guinea (PNG), Solomon Islands andVanuatu, to those which slowed or even contracted such as Fiji which grew by only 0.3 per cent in 2010after contracting by 1.3 per cent in 2009. As in the case of North and Central Asian economies, theeconomic performance of several countries in the Pacific is tied to international trade patterns and volumes,which in turn is influenced global commodity prices. Figure I-2 compares the quarterly movements in tradevalue with quarterly movements in several indices maintained by IMF: an index of all commodities; andindex of non-fuel commodities; and index of fuel commodities. The correlation between movements intrade value and price is clear.

With the slowdown in exports for most merchandise trade exporters, it is expected that transportpatterns will also shift markedly, with many countries in the region looking towards new markets in theAsia and Pacific region. The geography of trade is also changing due to the structural changes that areoccurring in some economies; changes in trade and tariff policy; improvements in transport infrastructure;and changes in manufacturing and supply chain practice. As can be seen from Table I-2, the proportion ofexports of developing countries in Asia sent to destinations within the region is about one-half, a figurewhich has only risen slightly since 2000, from 48.9 per cent to 50.4 per cent. What is significant, however,is the significant shift in the relative importance of the two major Asian importers: China and Japan.Historically, Japan has been a major importer of merchandise produced by the developing countries of Asia.However, between 2000 and 2009, the share of Asian exports destined for China increased between 2000and 2009 from 8.4 per cent to 12.5 per cent, making China the single most important Asian destination, andraising it to a level of importance similar to the United States and the European Union as an exportdestination. During the same period, the share of exports headed for Japan declined from 11.3 per cent to

Table I-1. Annual GDP growth rates (%) for ESCAP, 2002-2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Total ESCAP region 5.1 5.9 6.8 6.9 7.7 8.6 4.9 2.6 7.7 6.0

Subregions

East and North-East Asia 5.1 5.6 6.6 6.9 8.0 9.1 5.2 3.6 8.3 6.4

North and Central Asia 5.2 7.5 7.5 7.1 9.0 9.1 5.5 -5.8 4.5 4.5

Pacific 4.1 3.4 3.8 3.2 2.4 4.4 2.3 1.0 2.6 1.9

South and South-West Asia 5.1 6.4 7.4 8.1 8.1 8.8 4.4 4.3 8.4 6.5

South-East Asia 5.0 5.8 6.5 5.9 6.2 6.7 4.5 1.6 7.6 5.3

Income Group

Low 5.7 7.0 7.5 7.9 7.8 8.2 6.2 6.0 6.5 6.1

Middle 6.6 7.9 8.3 8.9 9.9 10.9 6.8 4.8 8.7 7.6

High 2.4 2.2 3.8 3.0 3.3 3.7 0.2 -3.5 5.4 1.7

Notes: 2010 figures are estimates, 2011 figures forecasts. Subregion growth and income category estimates derived from datain IMF, World Economic Outlook Database (http://www.imf.org), accessed 22 September 2011.


Table I-2. Direction of exports for selected economies and subregions (percentage share),2000-2009

ToDeveloping

China JapanUnited European

OthersAsia States Union

From 2000 2009 2000 2009 2000 2009 2000 2009 2000 2009 2000 2009

Central Asia 9.2 11.2 4.1 10.5 0.5 0.6 1.7 5.5 28.1 34.0 56.4 38.3

Armenia 7.8 12.5 0.2 2.5 0.1 0.1 12.6 9.4 36.9 43.5 42.5 32.0

Azerbaijan 7.1 18.3 0.3 0.8 0.0 0.0 0.5 11.4 63.6 41.7 28.6 27.8

Georgia 16.2 28.4 0.3 0.5 0.1 0.4 2.2 3.2 24.0 20.8 57.2 46.6

Kazakhstan 5.4 4.5 6.8 15.6 0.1 0.8 2.1 4.0 23.0 36.6 62.6 38.5

Kyrgyzstan 29.0 45.3 8.8 4.6 0.1 0.0 0.6 0.6 37.6 4.0 23.9 45.5

Tajikistan 16.5 13.4 0.4 39.8 N/A 0.3 0.1 0.1 30.1 10.7 52.9 35.7

Turkmenistan 6.4 17.4 0.3 1.2 N/A 0.0 0.5 3.0 21.5 24.4 71.3 53.9

Uzbekistan 23.6 23.2 0.5 6.5 3.2 1.9 1.5 1.7 26.8 8.2 44.3 58.5

East Asia 28.1 11.7 14.3 11.4 6.9 21.8 15.0 15.2 16.1 13.9 19.6

China 32.9 33.5 16.3 8.0 20.4 18.0 16.1 19.3 14.3 21.2

Hong Kong, China 10.2 10.6 34.1 51.0 5.5 4.4 23.0 11.5 15.5 12.4 11.8 10.1

Republic of Korea 23.8 21.7 10.2 22.6 11.3 5.7 20.9 9.9 13.7 12.2 20.2 28.0

Mongolia 4.0 1.3 49.8 73.9 1.5 0.2 24.3 0.7 7.7 11.9 12.6 12.0

Taiwan, Province of China 38.2 34.9 2.9 26.6 11.2 7.1 23.6 11.6 15.2 10.4 8.8 9.4

South Asia 20.8 1.6 5.4 3.6 1.7 24.2 12.6 26.3 23.7 26.9 35.8

Afghanistan 46.0 58.0 3.4 0.3 0.3 0.1 1.9 24.9 35.3 4.3 13.1 12.5

Bangladesh 5.4 5.8 0.2 0.7 1.2 0.8 31.7 20.2 40.1 47.9 21.5 24.6

India 19.2 22.4 1.8 6.1 4.1 1.9 21.1 11.0 24.1 20.9 29.8 37.7

Maldives 32.0 33.6 N/A 0.1 4.1 1.3 44.0 2.5 18.5 53.9 1.4 8.6

Nepal 44.5 66.2 N/A 0.7 1.4 1.6 27.4 8.2 23.0 14.2 3.7 9.2

Pakistan 18.5 19.3 2.6 5.5 2.6 0.5 24.9 18.0 27.7 24.3 23.6 32.3

Sri Lanka 8.6 11.1 0.1 0.9 4.2 2.3 40.1 20.5 28.2 38.7 18.9 26.6

South-East Asia 37.4 41.9 3.7 9.9 12.6 9.4 18.2 9.9 14.4 11.2 13.7 17.7

Brunei Darussalam 36.2 33.7 1.8 4.0 40.7 46.8 12.0 0.6 3.6 0.5 5.8 14.4

Cambodia 8.2 46.5 2.1 0.3 0.9 1.6 65.4 31.1 20.5 14.3 2.9 6.3

Indonesia 33.1 40.6 4.2 9.4 22.1 15.3 13.0 8.9 13.7 11.2 13.7 14.5

Lao People’s Dem. Rep. 43.4 44.3 1.5 20.0 2.8 1.6 2.2 2.7 26.0 11.4 24.1 20.0

Malaysia 40.3 41.6 2.9 11.8 12.3 9.6 19.5 10.7 13.3 10.6 11.7 15.8

Myanmar 35.2 71.0 5.6 9.8 5.4 5.2 22.0 0.0 16.4 3.3 15.5 10.7

Philippines 30.5 31.8 1.6 7.3 13.4 15.5 27.3 16.8 16.5 19.5 10.7 9.0

Singapore 44.1 52.1 3.8 9.6 7.3 4.5 16.7 6.4 13.5 9.4 14.7 18.0

Thailand 30.8 34.1 3.9 10.4 14.2 10.1 20.5 10.8 15.7 11.6 15.0 23.1

Viet Nam 25.8 22.7 10.3 8.5 17.2 10.8 4.9 19.6 20.0 16.2 21.9 22.3

The Pacific 11.2 12.5 5.2 5.2 10.3 7.3 5.3 2.7 11.1 8.5 56.9 63.8

Fiji 14.3 16.8 0.0 0.1 4.1 4.4 21.1 14.5 16.5 11.4 44.0 52.9

Papua New Guinea 7.6 10.6 6.5 4.1 11.2 7.9 1.3 1.2 10.2 8.1 63.2 68.1

Samoa 18.1 11.5 0.1 5.4 0.3 0.6 10.6 3.8 3.0 1.0 67.9 77.7

Solomon Islands 43.3 17.7 12.0 52.9 20.7 2.0 0.7 0.3 10.6 8.9 13.6 18.2

Tonga 42.7 0.4 48.5 12.8 30.0 23.8 6.5 1.9 8.7 18.4

Tuvalu 6.3

Vanuatu 60.7 64.2 0.4 0.7 18.7 13.2 9.7 1.1 5.7 15.1 4.8 5.7

Developing Asia 29.2 30.8 8.4 12.5 11.3 7.1 20.3 13.3 15.6 15.7 15.1 20.6

Source: ADB, Asian Development Outlook 2011.


7.1 per cent. These trends underline the emergence of China as an engine for subregional and intraregionaltrade.1

Outside of the region, the diversification of trade destinations is the most marked feature of thechange between 2000 and 2009. Exports to both the European Union and the USA declined, while the shareof exports sent to other non-Asian countries increased sharply from 15.1 per cent to 20.6 per cent. Thedecline in the share of the USA over the 2000 to 2009 period is particularly sharp; in 2000, the UnitedStates was clearly the most important single trading partner for the developing economies of Asia,accounting for over 20 per cent of total exports. By 2009, this had fallen to 13.3 per cent – significantlylower than the share of the European Union.

Given the sluggish growth and uncertain short- to mid-term prospects of most developedeconomies, further diversification of export destinations away from the traditional North American,Japanese and European markets will be the key to future export growth in the region. As noted in the AsianDevelopment Bank’s Asian Development Outlook 2011, “Given their reversals in the recent crisis, industrialeconomies are unlikely to drive demand in the world economy any time soon. With their strong prospectsfor growth, the economies of the South should take up the slack. Potentially, the rising consumption ofemerging economies and the new investment flows within the South can be new sources of growth for theworld economy – but only if the economies of the South become more open to trade and capital flows.”

The opening of these economies to trade and capital flows is supported by the rise of preferentialtrade agreements (PTAs) and regional trade agreements (RTAs) in the region, with most ESCAP memberstates now signatories to one or more PTAs. This approach of governments to trade agreements and theemerging new system of agreements has been referred to as “new regionalism”.2 The principal regional

Figure I-2. Comparison of movements in trade value with selected price indices, 2006-2011

Source: Trade index created by Porthcawl Pty. Ltd. from WTO quarterly trade series, downloaded from WTO website; price indices from IMF,World Economic Outlook Database. Both downloaded 22 September 2011.

0

50

100

150

200

250

300

Ind

ex

Value of trade All index Non-Fuel index Energy index

2006Q1

2006Q2

2006Q3

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

1 Asian Development Bank, Asian Development Outlook 2011, Oxford University Press, Hong Kong, 2011.2 Ramkishen S. Rajan, “Trade Liberalization, New Regionalism and Poverty Reduction in Asia and the Pacific”, paper prepared

for Expert Group Meeting on Regional Trade Agreements in Asia and the Pacific, Bangkok, 30-31 January 2003, ESCAPwebsite, http://www.unescap.org/


trade agreements, and the overlapping membership of these agreements, are summarised in Figure I-3.3

Despite the number and breadth of RTAs in the region, however, the level of intra-subregional trade isrelatively low, with much of the growth derived from trade with China. According to ESCAP, this may bebecause intraregional trade in the ESCAP region is more market driven than RTA driven.4 It also notes thatwhile China has served as the region’s “trade locomotive” it will be difficult for it to sustain its role, giventhat the drop in demand for Chinese goods in its main export markets will also depress demand for theintermediate goods imported by China from the region. Trade and transport costs in the region, includingnon-physical barriers at border crossings, also remain high. The upgrading and development of transportinfrastructure in the region will therefore have to be accompanied by the systematic removal of suchbarriers through trade and transport facilitation measures if the benefits of the RTAs are to be fully realized.

Figure I-3. Principal regional trade agreements involving ESCAP member states

Source: ESCAP

Private Participation in Infrastructure Developmentand Financing

One of the strategies for addressing the current global downturn has been fiscal stimulus measuresinvolving infrastructure investment. At the same time, however, governments face budget constraints. Thishas led to renewed interest in private sector involvement for financing infrastructure development andoperations. Globally, estimates based on the World Bank’s Private Participation in Infrastructure (PPI)database showed that the aggregate value of transport projects in developing countries that have beencompleted with private participation between 1990 and 2010 was approximately US$ 1,669 billion, overhalf of which was in the ESCAP region.5 This was spread across 2,600 projects, including nearly 700 in thetransport sector.

3 The Asia-Pacific Trade Agreement (APTA), which is the new name of the Bangkok Agreement that was concluded under theauspices of ESCAP in 1976, is one of the oldest PTAs in the region. Other RTAs include the Association of South-East AsianNations (ASEAN) Free Trade Area, the Commonwealth of Independent States Free Trade Agreement (CISFTA) for North andCentral Asia, the Pacific Island Countries Trade Agreement (PICTA) for the Pacific and the South Asian Free Trade Agreement(SAFTA) for South Asia.4 ESCAP, Asia-Pacific Trade and Investment Report (Bangkok, 2011).5 Based on analysis by Porthcawl Pty. Ltd. of data from the World Bank PPI database.

Axes of Consolidation and Integration in Asia


The 1997 Asian financial crisis then led significant drop in the number of PPI projects in allsectors, and the number of project continued to decline through to 2000. However, in the following years,confidence was gradually regained until, in 2006, total PPI projects again reached their 1993 level, with 207PPI projects in all sectors, with a further increase to 219 in 2007.

The recent global financial crisis saw a significant fall in all sector PPI projects, with the number ofprojects registered in ESCAP developing countries falling to 155 in 2008 and then to 144 in 2009, beforea modest recovery to 159 in 2010. Projects in the energy sector dominated PPI projects in the early 1990s,but transport sector projects – and particularly road projects – became more prominent towards the end ofthat decade. After a surge in 2006, transport sector projects again declined from 2007 to 2009, with only22 projects recorded in the last year of this period. However, 2010 saw a strong recovery, with 65 transportsector projects achieving financial conclusion (see Figure I-4).

Figure I-4. Annual number of infrastructure projects with private participationin ESCAP developing countries, 1990-2010

Source: Based on data in World Bank Private Participation in Infrastructure Database, viewed at the PPI website http://ppi.worldbank.org/website, 12 October 2011.

200

0

50

100

150

250

Nu

mb

er

of

pro

jec

ts

Transport Other

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure I-5 shows that the average size of PPI projects in the transport sector of ESCAP developingcountries has fluctuated in the range of US$ 80-400 million from year to year. However, there does notappear to be any consistent trend over time in average project value, with average size of projects over theperiod 1990 to 2010 being a little over US$ 200 million.

Table I-3 shows that, while concessions has been the most common form of private investment inthe transport infrastructure of ESCAP developing countries (324 out of a total of 682 projects), the totalvalue of greenfields projects was greater, accounting for over one-half of the total transport sector PPI. Thefocus of PPI activity in the region has clearly been on the provision of new infrastructure rather thanprivatization of existing facilities: divestitures and management and lease contracts together representedonly a little over 10 per cent of the total value of transport sector PPIs between 1990 and 2010.


Meanwhile, Figure I-6 shows that there has been a significant change over time in the distributionof transport PPI activity within the ESCAP region. Prior to the 1997 financial crisis, PPI activity inSouth-East Asia was a major component of regional PPI activity; however, activity in this subregion declinesharply during the crisis, and has never returned to its earlier heights. From 2005 onwards, however, therewas a rapid increase in PPI activity in South and South-West Asia. As PPI activity in East Asia fell awayunder the influence of the global financial crisis in 2007 and 2008, transport sector PPI activity in South andCentral Asia held up comparatively well. In 2010, transport sector PPI activity in South and South-WestAsia, and in North and Central Asia, was at an all-time high. China and India between them accounted fornearly two-thirds of total transport sector PPI activity in the region (Figure I-7). Six other countries –Malaysia, Turkey, Russian Federation, Thailand, Indonesia and the Philippines – between them accountedfor a further 30 per cent.

In terms of subsector, during the period 1990-2010, 51.5 per cent of the total private investment intransport infrastructure (a total of US$ 72 billion) was in the road sector. The next largest tranche ofprivate sector investment was in the seaports of the region, with a total investment over the period of overUS$ 30 billion), or 21.7 per cent of the total. The remaining 26.8 per cent was split fairly evenly betweeninvestment in railroads (13.5%) and in airports (13.3%).

Figure I-5. Value of Transport Sector PPI projects in ESCAP developing countries,million US$, 1990-2010


0

5,000

10,000

15,000

20,000

25,000U

S$

mil

lio

n

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

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00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Table I-3. Number and value of PPI projects in the transport sectorof ESCAP developing countries, by investment type, 1990-2010

Type of PPI Number of PPIsValue of PPIs(US$ millions)

Concession 324 51,478

Divestiture 55 12,173

Greenfield project 281 71,498

Management and lease contract 22 4,769

Total 682 139,918

Source: Based on data in World Bank Private Participation in Infrastructure Database, viewed at the PPI websitehttp://ppi.worldbank.org/website, 12 October 2011.


Figure I-6. Value of transport PPI projects by subregion, 1990-2010

Figure I-7. Geographic location of transport sector PPI projects in developing ESCAP member countries(share of the investment from 1990 to 2010)


0

5,000

10,000

15,000

20,000

25,000

US

D m

illi

on

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

East and North-East Asia North and Central Asia South and South-West Asia South-East Asia


Note: Others include: Armenia, Bangladesh, Cambodia, Georgia, Kazakhstan, Lao People’s Democratic Republic, Maldives, Myanmar,Pakistan, Sri Lanka, Uzbekistan, and Viet Nam.


There is general agreement that private financing will continue to pay a vital role in thedevelopment of Asia’s transport infrastructure for the foreseeable future:

“Experts agree that the opportunities for private capital investment into the regions infrastructureare set to rise exponentially over the next 10 years, and many governments are now activelycourting private involvement. A recent report by global consultancy McKinsey estimated that, overthe next 10 years, US$ 1 trillion of the projected 8 trillion in infrastructure projects in the regionwill be open to private investors under public-private partnerships (PPPs).”6

These developments have prompted renewed interest in initiatives to diversify sources of financefor future infrastructure investment and to provide additional support and encouragement to private sectorinvestors. Some of these sources include foreign exchange reserves, pension funds, and private savings. Forexample, the region’s response to the Asian currency crisis of 1997 was comprised of domestic austeritymeasures combined with an export-driven recovery. This has led the foreign exchange reserves of Asianeconomies to increase at an annual average rate of 21.5 per cent per year since 2000. From around 21.9 percent of regional GDP in 2000, reserves had increased to 40.5 per cent in 2008 – a massive US$ 3,371billion.7 The scale of the accumulated reserves, which exceed by a considerable margin the liquidity needsof the region, has provided the capacity – and arguably the necessity – of using some of these reserves tofund investments in real assets:

“Much of the research strongly indicated that at the margin, additional reserves were subtractingfrom rather than adding to national welfare in the region. Therefore, it would be logical to surmisethat many reserve-rich Asian countries could improve their welfare by slowing down or evenreversing their reserve build-up. The best way to have done this would have been not to accumulateso much reserves in the first place, for example by not running large and persistent current accountsurpluses or by liberalizing restrictions on capital outflows. However, given that there isa substantial amount of surplus reserves already accumulated and managed by regional centralbanks and monetary authorities, the second-best solution might be to manage at least a portion ofsuch reserves more actively with the goal of maximizing returns rather than managing liquidity.The notion that developing Asia should reallocate some of its reserves from safe and liquid but lowyielding assets to less safe and liquid but high-yielding assets is not only politically popular, butalso economically sound”.8

One asset class that could provide such an alternative is regional infrastructure, including regionaltransport infrastructure, but this will require the development of suitable financial instruments andinstitutions. A significant step in this direction has recently been taken with the establishment of theASEAN Infrastructure Fund. ASEAN countries hold over US$ 700 billion in reserves, an increasing shareof which is held in sovereign wealth funds with a broad investment mandate, but these funds have largelybeen invested outside of ASEAN, and outside Asia. The ASEAN Infrastructure Fund is intended to direct atleast part of these funds to financing ASEAN’s future infrastructure needs. Broadly modelled on the EuropeanInvestment Bank, the Fund is being established with an initial equity contribution of US$ 485.2 million, ofwhich US$ 335.2 million will come from nine ASEAN members. The remaining US$ 150 million is beingprovided by the Asian Development Bank. With projected 70 per cent co-financing by ADB, it is expectedto leverage more than US$ 13 billion in infrastructure financing by 2020.9

A number of ESCAP countries also have very substantial public sector savings and investmentfunds intended to help meet the anticipated obligations of government to provide pensions for ageingpopulations. The Japan Government Pension Investment Fund (JGPIF), the largest in the world, currentlycontrols assets estimated at US$ 1,400 billion (larger than the GDP of Canada). Historically, the investmentpractices of these funds have been extremely conservative – for instance, nearly two-thirds of the JGPIF’s

6 Nicholas Lord, “Infrastructure: Changing Lanes, Emerging Markets”, 5 May 2011. Available from website of EmergingMarkets, http://www.emerging markets.org (accessed 8 October 2011).7 Donghyun Park and Andrew Rozanov, “Asia’s Sovereign Wealth Funds and Reform of the Global Reserve System”. Available

from Asian Development Bank website, http://aric.adb.org (accessed 20 October 2011).8 Ibid, p. 6.9 Asian Development Bank news release, “Innovative Fund to Pave Way for Infrastructure Boom”, 25 September 2011.


funds are invested in Japan Government Bonds.10 However, there is a good fit for the needs of these fundsto generate sound, stable returns over the long term and requirements of infrastructure financing:

“The idea of investing in infrastructure seems to strike a chord with many pension plan directorsand members. Infrastructure feels more “tangible” and “real” than a lot of other complex productsand derivative strategies presented to pension funds these days, where they find it difficult to detectthe underlying value. In addition, infrastructure is made for the long term, and there seems to bea natural fit with the long-term liabilities of many pension plans. For some people there is alsoa connotation to sustainable or socially responsible investing, which is an increasingly popularroute chosen in particular by public and industry-wide pension plans.”11

A rebalancing of pension fund portfolios to include a greater proportion of infrastructure assetscould release significant amounts of capital for needed infrastructure development and at the same timeincrease the capacity of the funds to support future pension obligations. Recent research undertaken byRREEF Research estimated the 5-year annualised returns over a five year period that includes the GlobalFinancial Crisis, and found that “On a five year basis, listed infrastructure produced a higher Sharpe ratio(a statistic used to measure the return per unit of risk) than many other asset classes”.12 RREEF estimatesthat for ‘pure play’ listed infrastructure funds (funds that typically own or operate infrastructure assets only)was 8.63 per cent per annum. Total return for these companies are typically driven by stable and long-termincome derived from usage fees – that is, the returns mirror fairly closely the returns to direct investmentsin infrastructure made by unlisted private companies or special purpose vehicles. Figure I-8 shows that thisreturn is considerably in excess of that which could be obtained from investments in government bonds ina range of Asian economies and the USA.

Figure I-8. Comparison of return on infrastructure investment and return on government bonds,selected Asian economies and the USA

Source: Return on infrastructure assets from RREEF Research A Compelling Investment Opportunity: The Case for Global ListedInfrastructure Revisited. 10-year bond rates from Asian Development Bank, Asian Bonds Online website, http://asianbondsonline.adb.org,accessed 17 October 2011.

10 Chikafumi Hodo, “Japan’s giant pension fund sees asset sales steady next year”, 21 June 2011. Available from Reuterswebsite, http://www.reuters.com (accessed 17 October 2011).11 G. Inderst, Pension Fund Investment in Infrastructure, OECD Working Papers on Insurance and Private Pensions, No. 32,OECD, 2009.12 RREEF Research, “A Compelling Investment Opportunity: The Case for Global Listed Infrastructure Revisited”, July 2011,available at http://www.rreef.com (accessed 17 October 2011).


In the future, private savings may also play a much larger role in financing infrastructure in theregion. The Asian Development Bank, amongst others, has remarked the magnitude of private savings inAsia, the potential to use these fund to fund future infrastructure, and the very limited extent to which thispotential is, at present, realised.

“The binding constraint for infrastructure development in Asia is not a lack of financing. On thecontrary, Asia is flush with capital. The countries accounting for 95 per cent of Asia’s totalinvestment needs – China, India, Japan, Republic of Korea, Malaysia, Thailand, and Viet Nam – allhave high domestic savings rates. The real constraints include a lack of bankable projects;inadequate policy and institutional frameworks; weaknesses in the public sector that hamper itscapacity to implement infrastructure projects (except in the China); weak support for PPPs (exceptin Republic of Korea, Malaysia, and, recently, India); and underdeveloped domestic and regionalcapital markets, especially bond markets.”13

However, the experience of two financial crises – the Asian currency crisis of 1997 and the morerecent global financial crisis – have also demonstrated the sensitivity of the private sector’s appetite forfunding infrastructure investments, and its ability to do so, to conditions in global financial markets.Perhaps more fundamentally, the mixed outcomes (from the private sector perspective) of PPI projects haveprompted a re-assessment of the level and nature of the risks involved in infrastructure investments. Oneparticular area in which governments are being called upon to bear more of the risk is demand risk. Tollroad projects in which developers bear the full risk of demand shortfalls are now more difficult to finance.Strategies for sharing or transferring demand side risk include availability payments (adopted in the case ofPeninsula Link road in Australia14 ); shadow tolls; capital subsidies (used for example in India and theRussian Federation)15 and minimum traffic or revenue guarantees.

13 Asian Development Bank/Asian Development Bank Institute, Infrastructure for a Seamless Asia (Tokyo, 2009).14 Partnerships Victoria, “Peninsula Link: Project Study”, viewed on the Partnerships Victoria website, http://www.partnerships.vic.gov.au (accessed on 17 October 2011).15 Cesar Queiroz and Ada Karina Izaguirre, Worldwide trends in private participation in roads: growing activity, growinggovernment support, Gridlines No. 37, available at http://www.worldbank.org (accessed on 17 October 2011).


II. Railways 13

II. RAILWAYS

A. National Railway Sector Development

While countries – especially developing ones – have been investing substantial amount ofresources into funding the development of modern roads and highways, the enthusiasm for rail developmenthas fluctuated over time. Since the late 1990s, concerns over issues such as greenhouse gases, fossil fueldependency and energy efficiency have led to renewed interest in the inherent quality of rail. As a result,a number of governments are once again considering rail as a viable transport option and rail infrastructuredevelopment projects are once again on the agenda. However, the extent of rail infrastructure developmentand the utilization of the rail mode offer a contrasting picture across the region. Table II-1 below showsrailway route-kilometres, defined as the sum of the distances (in kilometres) between the mid-points of allstations on the network, for a number of selected member countries in the ESCAP region as well as themost common track gauges in use in each country.

Table II-1. Railway route length (excluding branch lines) and most common track gaugein selected ESCAP countries

Country Route lengthGauge

Country Route lengthGauge

(mm) (mm)

Afghanistan1 75 km 1,520 Malaysia5 1,658 km 1,000

Armenia2 826 km 1,520 Mongolia4 1,810 km 1,520

Australia3 34,163 km New Zealand7 7,791 km 1,067

Azerbaijan4 2,080 km 1,520 Myanmar5 5,460 km 1,000

Bangladesh5 2,835 km 1,000 Nepal5 53 km 1,6761,676

Cambodia6 602 km 1,000 Pakistan2 7,791 km 1,6761,000

China5 91,000 km 1,435 Russian Federation4 85,280 km 1,520

Georgia4 1,570 km 1,520 Republic of Korea5 3,557 km 1,435

DPR Korea4 5,235 km 1,435 Singapore5 23.5 km 1,000

India5 63,974 km 1,676 Sri Lanka7 1,463 km 1,676

Indonesia5 6,535 km 1,067 Tajikistan4 616 km 1,520

Islamic Republic of Iran4 6,221 km 1,435 Thailand5 4,071 km 1,000

Japan3 20,035 km 1,067 Turkey2 9,594 km 1,4351,435

Kazakhstan4 14,210 km 1,520 Turkmenistan4 3,110 km 1,520

Kyrgyzstan4 417 km 1,520 Uzbekistan4 4,230 km 1,520

Lao People’s Democratic Republic5 3.5 km 1,000 Viet Nam4 2,350 km 1,0001 Asian Development Bank; 2 International Union of Railways, statistics (2010); 3 Consultant; 4 OSJD bulletin of statistical data on railwaytransport for 2009 (published 2010); 5 Government sources; 6 Toll Co. Ltd.; 7 Railway Directory, 2011.

In 2009, the assessed total route length of railway networks across the ESCAP region wasestimated at slightly over 388,500 route-kilometres. However, while most countries – except Pacific Islandcountries or countries with excessively high mountainous terrain such as Bhutan – operate a rail network,just five out of these 30 countries (Australia, China, India, Japan and the Russian Federation) account for76 per cent of this route length.

Given its recent fast-pace development of high-speed lines, China – with 91,000 route-kilometres –has now the most extensive rail network in the ESCAP region, slightly over the Russian Federation’snetwork of 85,290 route-kilometres and ahead of India’s network of nearly 64,000 route-kilometres.Other large networks in the region are also to be found in Australia, Japan and Kazakhstan with 34,000route-kilometres, 20,000 route-kilometres and 14,200 route-kilometres, respectively. At the other extreme,


a number of ESCAP countries have very small networks. These include Armenia, Cambodia, Kyrgyzstan,and Tajikistan, all of which have under 1,000 km of railway routes.

For obvious reasons, countries with vast land areas tend to have most rail track while those withhigh-density population will have a greater penetration of the rail network. It is therefore useful to postoverall route-kilometres indicated in Table II-1 against countries’ land area and population. Table II-2shows the top and bottom five countries in terms of national network-to-area ratio, while Table II-3 showsthe top and bottom five countries in terms of rail network route-kilometres by population.

The greatest density of rail networks is observed in Japan, with nearly 53 kilometres of rail routeper thousand square kilometres (km/’000 km2). Other smaller countries such as Armenia, Azerbaijan,Georgia, New Zealand, Singapore and Sri Lanka also have densities in excess of 20 km/’000 km . Apartfrom Japan, of the five countries with the longest route-kilometres, only India stands out against the otherlarge networks with a density of just under 20 km/’000 km2 compared to China’s 9.5 km/’000 km2, Russia’s5 km/’000 km2 and Australia’s 4.4 km/’000 km2.

The adoption of electric traction by the railway organizations of the region has long beenconsidered as a measure of their preparedness to accept cost-saving advanced technology and an indicationof their preference for environmentally friendly methods of operation. However, the development ofnew-generation diesel-operated locomotives and closer scrutiny as to how the electricity that feeds thepower grid of individual rail networks is produced may lead to a revision of this thinking. Table II-4 showsthe total electrified route-kilometres in those countries and their share in each individual network.

So far only sixteen, i.e. under half, of the railways in Table II-1 have embraced electric operation.Together they total 137,000 km of electrified route-kilometres, i.e. slightly over 35 per cent of the region’soverall railway route-kilometres. The figures show that ESCAP member countries vary greatly in the levelof rail network electrification. In terms of electrification to route-length, Georgia and Armenia top the tablewith 94.6 per cent and 87 per cent of their networks being under electric traction, respectively. They arefollowed by the Democratic People’s Republic of Korea with 81 per cent of its network electrified andJapan, the Republic of Korea and Azerbaijan which each have 60 per cent of their networks under wire. Interms of overall electrified route-kilometres, the Russian Federation has the most extensive electrified

16 Per thousand square kilometres of area.17 Per thousand inhabitants.

Table II-2. National rail route-kilometres-to-area ratio16

– top and bottom five countries

Top five Ratio Bottom five Ratio

Japan 52.9 km Kyrgyzstan 2.1 km

Democratic People’s Repubic of Korea 43.3 km Mongolia 1.2 km

Singapore 36.7 km Nepal 0.3 km

Republic of Korea 34.0 km Afghanistan 0.11 km

New Zealand 28.7 km Lao People’s Democratic Republic 0.02 km

Table II-3. National rail route-kilometres-to-population ratio17

– top and bottom five countries

Top five Ratio Bottom five Ratio

New Zealand 1.90 km Indonesia 0.022 km

Kazakhstan 0.97 km Bangladesh 0.019 km

Russian Federation 0.60 km Singapore 0.005 km

Georgia 0.36 km Afghanistan 0.002 km

Armenia 0.28 km Lao People’s Democratic Republic 0.0006 km

2

II. Railways 15

network, with over 43,000 kilometres of electrified routes, i.e. over 50 per cent of the country’s totalnetwork. It is followed by China and India with 42,000 km and 18,900 km of electrified routes,respectively. Although the rail network in Australia is the fourth largest in the region at 34,163 kilometres,only 7.8 per cent of it is electrified.

From a subregional perspective, the Caucasus region and South-East Asia are the subregions with,respectively, the most and least electrified networks. In Central Asia, Kyrgyzstan, Tajikistan andTurkmenistan are not electrified at all. In South Asia, the railways of Sri Lanka and Bangladesh are notelectrified at all and the railways of Pakistan only marginally so. In North and North-East Asia, the railwaysof the Democratic People’s Republic of Korea and Mongolia are also not electrified. In Western Asia, only2.4 per cent of the railways of the Islamic Republic of Iran are electrified and a sizeable 29 per cent of therailways in Turkey.

B. Railway Traffic Trends

This section contains an assessment of the trends in the freight tonnage, tonne-kilometre, andaverage freight haul as well as the passenger numbers and kilometres for a selection of countries in theregion. This data has been sourced from rail industry publications and databases, country statisticalyearbooks and other government publications.

1. Railway freight traffic: net tonnes

Table II-5 illustrates trends in railway freight tonnage (net tonnes) for a selection of ESCAPmember countries over the period 1995-2010. Of the selection of countries represented, the highest absolutetotal growth in railway freight tonnage for the period occurred in China: between 1995 and 2009, itsrailway freight tonnage increased by 1,740 million tonnes. Australia and India recorded the second and thirdhighest growth in freight rail tonnage over this period, with an increase of 474.6 and 468.4 million tonnesrespectively. In the case of Australia the key factor that contributed to the relatively high growth in railfreight tonnes is the boom in iron ore and coal exports. Kazakhstan’s growth in absolute terms was the nexthighest at 160.4 million tonnes. A nearly 200 per cent growth in volumes occurred in Cambodia but thisfrom a tiny base of 56 million tonnes and is only measured over a two year period. Aside from Cambodia’sexperience, however, in percentage terms, the Region’s most impressive rate of growth over the period from1995 to 2009 occurred in two Central Asian countries, Kyrgyzstan and Tajikistan with compound averagegrowth rates of 14.5 and 11.4 per cent respectively. Annual average growth rates in three other countries inNorth and Central Asia, Armenia, Azerbaijan and Georgia, were also relatively high for the region, rangingfrom about 6 per cent to 10 per cent.

Either no growth or negative growth occurred in five countries in the region. In the Philippines, forexample, in the four years from 1995 to 1999 for which there is data, rail freight volumes fell at an averageannual rate of 73 per cent to the extent that it virtually ceased to exist in 1999. Negative growth rates, albeit

Table II-4. Electrified route-kilometres in member countries

CountryElectrified % of

CountryElectrified % of

route-km network route-km network

Armenia1 719 km 87 Japan2 12,230 km 61

Australia2 2,649 km 7.8 Kazakhstan3 4,054 km 28.5

Azerbaijan3 1,251 km 60 Malaysia4 330 km 20

China4 42,000 km 46 Pakistan1 305 km 4

Democratic People’s Republic of Korea 4,220 km 81 Russian Federation3 43,165 km 50.6

Georgia3 1,486 km 94.6 Republic of Korea4 2,150 km 60.4

India4 18,927 km 30 Turkey1 2,791 km 29

Islamic Republic of Iran3 148 km 2.4 Uzbekistan3 589 km 14

Sources: 1 International Union of Railways, statistics (2010); 2 Consultant; 3 OSJD bulletin of statistical data on railway transport for 2009(published 2010); 4 Government sources.


Table II-5. Trends in railway freight tonnage in the ESCAP region

Subregion CountryGrowth Freight traffic (’000 tonne)

CAGR From To First Year Last Year

East and China 5.4% 1995 2009 1,593,460.0 3,333,480.0

North-East Asia Japan -3.6% 1995 2009 52,103.0 31,058.0

Mongolia 5.1% 1996 2009 7,458.0 14,172.0

Republic of Korea -2.4% 1995 2010 56,073.0 39,218.0

North and Armenia 5.7% 1995 2006 1,625.0 3,000.0

Central Asia Azerbaijan 6.1% 1995 2009 9,073.0 20,800.0

Georgia 9.8% 1995 2009 4,656.0 17,131.0

Kazakhstan 3.9% 1995 2010 207,320.0 367,735.0

Kyrgyzstan 14.5% 1995 2009 899.0 5,981.6

Tajikistan 11.4% 1995 2009 3,199.0 14,546.0

Thailand 3.2% 1995 2007 8,100.0 11,881.0

Turkmenistan 1.1% 1995 2009 22,164.0 25,925.0

Uzbekistan 1.4% 1995 2009 66,599.0 80,893.0

Pacific Australia 5.9% 1995 2000 381,900.0 852,540.0

New Zealand 8.9% 1995 2000 9,600.0 14,700.0

South and Bangladesh 1.8% 1995 2008 2,600.0 3,280.0

South-West Asia India 6.1% 1995 2009 364,955.0 833,383.0

Islamic Republic of Iran 3.1% 1995 2009 21,401.0 32,817.0

Pakistan -0.1% 1995 2008 7,356.0 7,234.0

Sri Lanka 4.3% 1995 2007 1,200.0 2,000.0

South-East Asia Cambodia 188.2% 1996 1998 56.0 465.0

Malaysia 0.0% 1995 2009 5,249.0 5,231.0

Myanmar 8.7% 1990 1999 1,600.0 3,400.0

Philippines -73.4% 1995 1999 20.0 0.1

Viet Nam 4.3% 1995 2009 4,500.0 8,159.0

Source: Porthcawl Pty. Ltd. estimates, based on data from the Railisa database maintained by UIC, available at http://www.uic.org

less dramatic than in the Philippines, also occurred in Japan (-3.6 per cent) and the Republic of Korea(-2.4 per cent), while rail freight volumes in Malaysia remained virtually static during the period from 1995to 2009.

2. Railway freight traffic: net tonne-kilometres

A net tonne-kilometre (tonne-km) represents one net tonne of freight transported for one kilometre.A “net-tonne”, as distinct from a “gross tonne”, includes the weight of the freight consignment andits packaging, but excludes the weight of the railway wagon. When aggregated across a railway system,“net tonne-kilometre” provides a measure of the work done by the system, or the task of the railway system,in moving freight traffic.

Table II-6 compares the freight traffic task (tonne-km) across a selection of ESCAP countries.It shows a substantial difference in total freight task and growth in freight task, within and between ESCAPsubregions. For example, in 2009, China recorded a freight traffic task approximately 1,240.3 billiontonne-kilometre greater than in 1995, representing a 4.9 per cent annual increase. In terms of freight traffic,China’s publicly owned and operated Chinese Railways network is the world’s second largest behind that ofthe United States of America. Apart from China, in aggregate tonne-km terms, India, Australia andKazakhstan handled the highest freight volumes and recorded the largest absolute increases in the totalfreight task, with increases of 301.9, 157.6 and 88.7 billion tonne-kilometres respectively.

II. Railways 17

Table II-6. Trends in railway freight traffic task (tonne-km) in the ESCAP region

Subregion CountryGrowth Freight traffic (m tonne-km)

CAGR From To First Year Last Year

East and China 4.9% 1995 2009 1,283,601.0 2,523,917.0

North-East Asia Japan -1.4% 1995 2009 24,747.0 20,432.0

Mongolia 9.1% 1996 2009 2,541.0 7,852.0

Republic of Korea -2.4% 1995 2010 13,712.0 9,452.0

North and Armenia 5.0% 1995 2005 403.0 654.1

Central Asia Azerbaijan 11.6% 1995 2008 2,409.0 10,021.4

Georgia 11.1% 1995 2009 1,246.0 5,433.0

Kazakhstan 3.7% 1995 2010 124,502.0 213,174.0

Kyrgyzstan 4.5% 1995 2009 403.0 744.5

Tajikistan -3.5% 1995 2009 2,115.0 1,282.0

Thailand -0.2% 1995 2007 3,242.0 3,161.0

Turkmenistan 2.3% 1995 2009 8,568.0 11,765.0

Uzbekistan 2.0% 1995 2009 16,800.0 22,227.0

Pacific Australia 6.1% 1995 2000 99,700.0 257,320.0

New Zealand 5.0% 1995 2000 3,202.0 4,078.0

South and Bangladesh 1.8% 1995 2008 689.0 870.0

South-West Asia India 5.8% 1995 2009 249,564.0 551,448.0

Pakistan 0.7% 1995 2008 5,661.0 6,187.0

Sri Lanka -0.1% 1995 2007 137.0 135.0

South-East Asia Cambodia 17.5% 1997 2003 35.0 92.0

Islamic Republic of Iran 3.9% 1995 2009 11,865.0 20,247.0

Malaysia -0.2% 1995 2009 1,416.0 1,384.0

Myanmar 3.3% 1995 2004 659.0 885.0

Philippines -20.5% 1995 2004 6.0 0.8

Viet Nam 6.3% 1995 2009 1,751.0 4,139.0


While a number of countries have achieved, to varying degrees, an increase in freight task between 1995and 2009, a number have experienced decreases. As Table II-6 above details, these countries include Japan,Republic of Korea, Tajikistan, Thailand, Sri Lanka, Malaysia and the Philippines.

3. Railway freight traffic: average freight haul distances

The average distance over which rail freight traffic moves is one of the indicators of the financialviability of the rail freight business. It is widely accepted that average freight hauls of less than about300 kilometres are unlikely to generate sufficient net revenue to be able to offset fixed costs, unless theyinvolve regular high tonnage shipments (of the type which can be generated in the region by containerfeeder train movement between ports and inland terminals). When a railway carries freight between 500 and5,000 kilometres, it is thought to be able to compete against road and air transport: road transport is bettersuited to distances below 500 kilometres, while sea transport is usually more economical for the transport offreight over journeys over 5,000 kilometres.18

Figure II-1 compares average freight-haul distances across a selection of countries in the ESCAPregion. As with other rail data presented in this section of the Review, the latest date for which informationis available differs between countries. The size and the shape of the country strongly influences the averagehaulage distance. It is therefore not surprising that the average distance over which rail freight is carriedvaries widely between ESCAP countries. According to the most recently available rail data, the average

18 World Bank, World Development Indicators 2005 (Washington, D.C., 2005).


haulage distance in seventeen of the twenty-six countries for which data is available is less than the500-kilometre distance, below which road transport is likely to be more economical than rail. Among thisgroup of countries, haulage distances are under 200 kilometres in Sri Lanka, Tajikistan, Armenia,Kyrgyzstan, and Cambodia.

At the other end of the spectrum, the average haulage distance in the Russian Federation isexceptionally long, i.e. almost 1,600 kilometres. In terms of average haulage distance, Pakistan rankssecond at 855.3 kilometres. In seven other countries, i.e. China, India, Islamic Republic of Iran, Japan,Kazakhstan, Mongolia and Viet Nam, the average haulage distance lies between 500 and 800 kilometres.

4. Composition of the rail freight task

Comprehensive and consistent data on what cargoes are hauled by rail is not readily available.However, information available on the composition of the rail freight task on a selection of the region’slargest rail networks can provide some insight into the nature and composition of the freight rail task. Themix of commodities carried on four of the region’s major rail systems is shown in Figure II-2.

It is clear that bulk commodities dominate the freight carried by each of the selected railwaysystems. Fuels are particularly important in all cases, contributing between approximately 30 per cent(Pakistan) and nearly 50 per cent (India and Russian Federation) of the total freight task. Constructionmaterials are also important on all systems, as are agricultural products and inputs to agriculture. Only inIndia and Pakistan is container traffic explicitly recorded as an important element of the freight task.

Figure II-1. Average freight haul distances (kilometres) in the ESCAP region


Sri Lanka (2007)

Tajikistan (2009)

Armenia (2006)

Kyrgyzstan (2009)

Cambodia (1998)

Republic of Korea (2009)

Australia (2000)

Malaysia (2009)

Bangladesh (2008)

Thailand (2007)

Uzbekistan (2009)

New Zealand (2000)

Georgia (2009)

Myanmar (1999)

Philippines (1998)

Azerbaijan (2009)

Turkmenistan (2009)

Viet Nam (2009)

Mongolia (2009)

Islamic Republic of Iran (2009)

Japan (2009)

India (2009)

China (2009)

Kazakhstan (2009)

Pakistan (2008)

Russian Federation (2008)

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

Kilometres

II. Railways 19

C. Rail Services

Recognizing early on that intermodal transport using rail for the main leg of a journey betweenorigin and destination provided an opportunity to facilitate intra and inter-regional trade, ESCAP hasworked closely with concerned member countries to organize demonstration runs of container block trains,particularly along the Trans-Asian Railway Northern Corridor. Other organizations such as the EconomicCooperation Organization (ECO), have also been active in the same area. In 2009, ECO collaborated withthe railway concerned to organize demonstration runs of container trains between Istanbul (Turkey) andAlmaty (Kazakhstan) and more recently container trains ran both ways on the 6,500-km route betweenIslamabad and Istanbul via Tehran in slightly over fourteen days, it carried 20 containers with 750 tonnes offreight.19 The Almaty-Istanbul and Islamabad-Tehran-Istanbul trains have now been turned into regularcommercial services.

By and large, efforts to develop intermodal traffic have mostly been confined to three countries,namely: China, India and the Russian Federation. With its manufacturing base and millions of containerspassing through its ports every year, China, more than any country, has a vital economic interest indeveloping efficient intermodal interfaces along its major rail routes. In 2010, containerized cargo was stillestimated to account for only 2.4 per cent of Chinese Railways’ overall cargo transport20. Yet, this lowfigure should not hide that the fact that the Government of China and Chinese Railways have for a numberof years recognized the growing importance of this specific business segment and allocated substantialresources to its development. For example, Chinese Railways has introduced double-stack containerservices on a number of domestic routes together with the introduction of new specialized wagons and thedevelopment of more powerful locomotives. Recently, Chinese Railways rolled out the newly-engineeredJT56ACe diesel-electric locomotive with a speed of 120 km/h, a tractive force of 620 kN and the capabilityto run in multiple units of up to three locomotives.21

Figure II-2. Commodity composition of rail freight, selection ESCAP economies

Source: Data for Pakistan, China and Russian Federation from Paul Amos, Freight Transport for Development Toolkit: Freight Transport,World Bank (Washington, D.C. 2009). Data from India from Indian Railways Statistical Report for 2009-2010.

Other

Goods in transit

Containers

Petroleum

Agriculture

Fertilizer

Building materials

Coal and minerals

0 10 20 30 40 50

Share of total net-tonne kilometres (%) Share of total net-tonne kilometres (%)

Share of total net-tonne kilometres (%)Share of total net-tonne kilometres (%)

0 10 20 30 40 50

0 10 20 30 40 50 0 10 20 30 40 50

Other

Lumber

Cement

Chemicals and fertilizer

Grain and flour

Iron and steel

Ores and minerals

Oil and petroleum

Coal and coke

OtherStone (inc gypsum)

SaltSugar

Limestone and DolomiteMineral oils

Iron and SteelFertilizersFoodgrain

CementIron ore

Coal

Other

Agriculture

Building materials

Iron and steel

Minerals

Petroleum

Coal

Pakistan Russian Federation

China India

19 Christopher Jackson, “A long way to go”, Railway Gazette International, 29 August 2009, viewed on Railway GazetteInternational website, http://www.railwaygazette.com (accessed 31 December 2009).20 “Linked up?”, Containerization International, March 2011.21 “EMD unveils 4.47 MW Chinese diesel”, International Railway Journal, September 2008.


China is a major transit country for intermodal operation to/from landlocked countries of theregion, in particular Mongolia and the landlocked republics of Central Asia. As of July 2011, ChineseRailways was operating an average 3.5 trains per week and per direction between the port of Tianjin andUlaanbaatar through the Erenhot/Zamyn Uud border point. Meanwhile, it was operating 7 trains per weekto Central Asia through the Alanshankou/Dostyk border point and another 2.5 and 1.5 trains per week toCentral Asia from Qingdao and Tianjin, respectively. In 2010, 229,104 TEUs were handled at theAlanshankou/Dostyk border crossing point, up 25 per cent over 2009.22

Chinese Railways are also continuing to introduce new landbridge services to Europeandestinations. In particular, in May 2011, a 5-days-a-week direct rail freight service was launched theBelgium Port of Antwerp and Chongqing, the latest industrial hub to develop in the south-west region ofChina. As compared to the 36 days it takes for maritime transport from east China’s ports to west Europe,the Antwerp-Chongqing Rail Freight service takes 20 to 25 days with the objective of further reducingtransit times to 15 to 20 days in future. While westbound cargo largely includes automotive andtechnological goods, eastbound shipments are mostly chemicals. The service, run by Swiss inter-modallogistics provider Hupac, their Russian partner Russkaya Troyka and Eurasia Good Transport, runs over10,000 km from the port of Antwerp through Germany, Poland, Ukraine, the Russian Federation andMongolia before reaching Chongqing in China. In July 2011, another service was launched betweenChongqing and Duisburg (Germany). Hauling laptops and LCD screens, the train was routed throughKazakhstan, the Russian Federation, Belarus and Poland and covered the distance of over 11,000 km in lessthan 16 days.

The above developments in the area of services would be of little impact if they were not supportedby the emergence of modern intermodal facilities at strategic locations across china’s vast geographicalarea. Here too, Chinese Railways has taken action to integrate its major freight corridors via a network of18 logistics hubs. Such hubs have already started operation at Kunming, Shanghai, Chongqing, Chengdu,Zhengzhou, Wuhan, X’ian, Qingdao and Dalian, and nine more are due to be commissioned in 2012 atTianjin, Harbin, Beijing, Guangzhou, Lanzhou, Ningbo, Shenyang, Shenzhen, and Urumqi.23

Given its east-west distances and its unique position for transit between Asia and Europe, therailways of the Russian Federation are also implementing a number of policies and projects to attractinternational intermodal traffic onto their network, in particular along the Trans-Siberian (TSR) main line.Intermodal operation along the TSR is nothing new as container block-trains were already routinelyoperated along the line in the days of the Soviet Union. However, the market potential of the line hasexpanded with the growth in international trade that came after the break-up of the Soviet Union.

Aware of this potential, Russian Railways have already implemented a series of infrastructureprojects aiming at increasing capacity along the route by completing double-tracking and electrificationalong the entire line. Other projects have involved the upgrading and double-tracking of the Karimskaya-Zabaikalsk line section linking the border crossing point between the Chinese and Russian networks to theTSR, upgrading of installations at border stations, including Naushki at the border with Mongolia andZabaikalsk at the border with China, the lengthening of passing loops to accommodate longer trains, theconstruction of new lines to remove bottlenecks around the cities of Perm and Chita, installation of modernIT systems and improvement of the interface between railway and shipping in the ports of Vostochny andNakhodka. Altogether Russian Railways are planning investment in the order of US$ 5.5 billion in theperiod to 2015 for railway development along the TSR between Nizhniy-Novgorod and Nakhodka.24

The above projects aim at fulfilling the realization of the Transsib-7 project by which RussianRailways expect to cut transit time between the port of Nakhodka in the Russian Far-East regionand locations on the western border of the country, i.e. Krasnoe and Saint Petersburg, from fourteen daysin 2008 to under 7 days by 2015. Russian Railways expect that these projects and policies will result ina five-time increase of rail-carried containers between Asia and Europe.

22 KAZTRANSSERVICE JSC, June 2011.23 “Linked up?”, Containerization International, March 2011.24 Russian Railways JSC, December 2009.

II. Railways 21

In addition to the above, to increase the penetration of the TSR into the heartland of Europe,Russian Railways are collaborating with the railways concerned to extend the 1,520-mm-gauge line fromKosice (Ukraine) to Vienna via the Slovak capital at Bratislava25. According to Russian Railways,completion of the US$ 4.3-billion project could increase freight volumes from the Russian Federation toEurope by 60 per cent.26

Finally, Russian Railways is also a major force behind the development of the North-South corridorthat will eventually link the Baltic sea to the Persian Gulf via a line that travel from Saint Petersburg toMoscow, down to the border with Azerbaijan and along the western shore of the Caspian sea to the borderbetween Azerbaijan and the Islamic Republic of Iran. However, commission of the corridor requires thecompletion of the line section between Astara, the Azeri-Iranian border point and Rasht in the IslamicRepublic of Iran. In anticipation, Russian Railways have undertaken a series of infrastructure projectsalong concerned line sections on their territory. Such projects have involved the double-tracking andelectrification of the Trubnaya-Aksaraiskaya line section, construction of a new track to facilitate operationaround the city of Saratov, reconstruction of the Akhtuba railway bridge near Astrakhan station, thedevelopment of a new cross-border station at Verhny Baskunchak as well as upgrading of stations along theroute with extension of passing loops.27

Intermodal transport is not new to Indian Railways which inaugurated its first container terminal in1981 and started to focus more specifically on this market segment in 1988 with the establishment of theContainer Corporation of India (CONCOR) to provide efficient and reliable multi-modal logistics supportfor the country’s domestic as well as international trade. From its original 8 terminals, CONCOR hasexpanded its network of facilities to include thirty-two terminals dedicated to both international and

Box II-1. Trial run for Chongqing-Duisburg service

New test train from Chongqing, with 16 days journey time, is the attractive forerunner for planned regularservices from the Chinese hinterland. A container train from Chongqing in China arrived yesterday night in Duisburgafter travelling for scarcely 16 days. For the 10,300-kilometer journey along the so-called Southern route, the DBSchenker train, which was commissioned by a global company, completed the journey in about half the time thatwould have been necessary taking the sea route. The route taken by the train went south of Mongolia, throughKazakhstan, Russian Federation, Belarus and Poland to Germany. Previous test trains on several occasions havefollowed the entire route north of Mongolia taken by the Trans-Siberian Railway, which is 2,000 kilometres longer,but involves less customs formalities.

Chongqing, the “city of lights“ on the Yangtze Kiang, with a population of just under 30 million, is one of thelargest and fastest growing cities in the world. Located in Sichuan Province in the Chinese hinterland, the city hasdeveloped into an important production centre for various industries. Quite a few global companies of differentindustries operate in Chongqing. The majority of goods exported to Europe currently take the sea route, some aresent by air freight.

Transporting the containers to a Chinese seaport alone takes around three days. By the time they get there, thetrain to Duisburg will have already covered half of its journey through China along the Eurasian Land Bridge.Dr. Karl-Friedrich Rausch, Member of the Management Board of DB ML AG responsible for Transportation andLogistics, commenting on the arrival of the train in the Port of Duisburg, said: “Most important of all, the time takenfor the journey from China’s interior, the train’s arrival in the middle of Germany and the possibility of deliveringthe containers from here to their destinations quickly and safely, demonstrate the attractiveness of our service. Wehope that, with the journey now completed, we have once again convinced our customers of the advantages of sucha train. According to our planning schedule regular services between China and Germany could begin within thisyear upon sufficient demand.”

Source: Trans-Europe-Logistics, Press release dated 5 April 2011, from website, http://www.trans-europe-logistics.com (accessed26 September 2011)

25 JSC Russian Railways, June 2011.26 “Yakunin reacts swiftly to economic crisis”, International Railway Journal, July 2009.27 JSC Russian Railways, December 2009.


domestic trade, eighteen dedicated solely to international trade and nine dedicated solely to domestic trade.Over the years CONCOR has gradually developed into a full logistics provider. In fiscal year 2010-2011,the company handled 2,562,000 TEU, including 2,018,000 in international traffic and 544,000 domesticTEUs.28 It currently operates forty-five international and fifteen domestic trains per day.29 The growingtraffic task of CONCOR reflects the growth in India’s international trade and occurs mostly on routesbetween New Delhi and ports in the western and north-western parts of the country. These ports account formore than 70 per cent of India’s container traffic while 75 per cent of container trains are for InlandContainer Depots located in Delhi or the neighbouring states of Uttar Pradesh, Haryana and Punjab.30

Although Indian Railways’ freight remains primarily dependent on bulk commodities which untilrecently accounted for 88 per cent tonnage, most growth potential is in non bulk with container trafficexpected to rise from 25 million tonnes a year to 210 millions by 2020.31 In anticipation of this forecast, theGovernment of India and Indian Railways have supported intermodal development through a series oftechnical innovations and the introduction of new services, including double-stack operation to Pipavav andMundra ports. Other initiatives have seen the establishment of new ports and terminals with private sectorparticipation with the objective of adding extra capacity of 10 million TEUs in the period to 2014. ICDs anddry ports providing complete logistics solutions are also being established as an alternative to port-sideContainer Freight Stations.

In an attempt to create a healthier container business, the Government of India launched in 1994a policy to facilitate the entry of private parties in container train operation. However, the policy got off toa slow start and needed to be revived in January 2006. The rationale behind a revision was spurred by thefact that CONCOR could not cover the domestic sector adequately and that private operators would bring inmore rolling-stock and establish more ICDs in hinterland areas. The revised policy created a moreconducive environment for private operators resulting in agreements having so far been signed with sixteenoperators of which thirteen have started active operation. Together these operators have supplied anadditional 115 rakes of container wagons and eight privately-owned ICDs are now in operation with landalready procured for more ICDs at other locations. In fiscal year 2010-2011, these private operators handled580,000 TEUs, i.e. about 17 per cent of India’s rail-carried container traffic. To further encourage privatesector investment in rail freight capacity, Indian Railways have launched schemes by which investors canapply for 20-year agreements to establish freight terminals providing added-value logistics services to thirdparties. The Agreements are based on 50 per cent revenue sharing with Indian Railways with grace periodof two and five years in specific cases. The Special Freight Train Operator Scheme enables investors toprocure specialized wagons with a minimum investment of three rakes of wagons and an extension of the20-year Agreement to the vehicle life-cycle.32

The vision of the Government of India and Indian Railways to develop intermodal transport is bestillustrated by the planned construction of the 1,483-km western dedicated freight corridor (DFC) that willjoin Delhi to the port of Mumbai. The US$ 90 billion project incorporates nine Mega Industrial zones ofabout 200-250 sq. km., high speed freight line, three ports, and six air ports; a six-lane intersection-freeexpressway connecting the country’s political and financial capitals and a 4,000 MW power plant. Severalindustrial estates and clusters, industrial hubs, with top-of-the-line infrastructure would be developed alongthis corridor to attract foreign investment.33

Although the railways of China, India and the Russian Federation handle the largest volumes ofTEU, other countries have also taken steps to develop intermodal services. In 2010, the railways ofKazakhstan (KTZ) operated 1,126 container block-trains, up 12 per cent over 2007 and handled 410,860 TEUs,up 10 per cent over 2007.34 In addition to running container block-trains serving its own international trade,especially with Germany and China, KTZ cooperates with railways of neighbouring countries to organize

28 Website of CONCOR at www.concorindia.com29 Indian Railways, June 2011.30 Indian Railways, June 2011.31 “Doubts persist over IR vision”, Railway Gazette International, February 2010.32 “Private funds sought for freight”, Railway Gazette International, July 2010.33 Website http://delhimumbaiindustrialcorridor.com34 Kazakhtransservice JSC, 2011.

II. Railways 23

the transit of Asia-Europe land-bridge services through its network, in particular from China to Germanyand Russian ports to Uzbekistan. In 2010, KTZ dispatched 195 trains carrying Chinese goods to WesternEurope35 with capacity for more.

In South-East Asia, Malaysian Railways (KTMB) has also been successful in developing itsintermodal operation. Outside of the international scene, KTMB provides 20 container block-trains a dayalong five main corridors geared mostly to moving Malaysian imports and exports from/to the main ports.Each train can load up to 60 TEUs and operate along the following core routes: Padang Besar to PenangPort (180 km), Penang Port to Port Klang (500 km), Padang Besar to Port Klang (350 km), Pasir Gudang toPort Klang (350 km) and Ipoh to Port Klang (240 km). However, enhancing traffic volumes is provingarduous due to the short distances over which trucking services are proving flexible and cost-effective.

While countries in north and north-east Asia have reported progress in boosting their intermodaloperation, in other parts of the region – with the exception of India – development has been slower, oftendue to a lack of investment resources. In south-east Asia even, the once successful container landbridgejointly operated by the railways of Malaysia and Thailand has suffered a drop in popularity amongstshippers. Established in 1999 to provide local shippers with an alternative option to shipping and roadservices between Port Klang, Malaysia’s largest container port, and destinations in Cambodia, Lao PDR andThailand, the service gained instant popularity with a number of private logistics providers and saw severalyears of steady growth in the early 2000s to reach a peak of 60,000 TEUs.36 Yet, few of these providers nowbook cargo on the 54-TEU-capacity trains. Transit times that took 2.5 days when the service wasinaugurated now take 7 days and a provider that used to run eight trains a week in each direction is nowoperating only two trains.37

In attracting intermodal services, railways need to gain the trust of industry. While goodinfrastructure will obviously not guarantee that railways provide services matching shippers’ requirements,perception of poor infrastructure will definitely keep them away. In this respect, the Global CompetitivenessReport published by the World Economic Forum provides an indication of how rail systems are assessedacross the region. On a scale of 1 for extremely underdeveloped to 7 extensive and efficient by internationalstandards, railways were assessed as follows:

Highest scores Lowest score

Japan (6.5) Pakistan (2.8)

Republic of Korea (5.7) Turkey (2.7)

Malaysia (5) Kyrgyzstan (2.7)

China (4.6) Mongolia (2.6)

India (4.4) Thailand (2.6)

Australia (4.3) Armenia (2.5)

Russian Federation (4.2) Bangladesh (2.5)

Azerbaijan (3.9) Viet Nam (2.5)

Georgia (3.9) Cambodia (1.8)

Kazakhstan (3.9) Philippines (1.7)

Source: World Economic Forum, Executive Opinion Survey in The GlobalCompetitiveness Report 2011-2012.

D. Trans-Asian Railway Network Development

The original TAR concept was to provide a continuous, 14,000 kilometre rail link betweenSingapore and Istanbul, with the potential to reduce transit times and costs between countries in the regionand possibly extending into Europe and Africa. The Trans-Asian Railway network comprises approximately117,000 kilometres of rail routes (see Map of the Trans-Asian Railway). Table II-7 below outlines theregions and countries along the TAR.35 “On the tracks of the silk road”, Railway Gazette International, December 2011.36 “Neighbours prioritise home improvements”, Railway Gazette International, December 2011.37 “Intermodal Revolution”, Containerization International, April 2010.

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II. Railways 25

1. Missing links

A “missing link” is an absence of physical connection between the railway networks ofneighbouring countries, or an absence of continuous railway infrastructure within one country. Localgeography such as lakes and seas may cause interruptions to railways, as is the case with Lake Van and theBosphorus in, respectively, the eastern and western parts of Turkey. Missing links between networks ofneighbouring countries occur either because the link was never there in the first place (for example,between China and Myanmar) or because it ceased to exist due to political events – for example, betweenthe Democratic People’s Republic of Korea and the Republic of Korea. In total, the TAR network stillincludes 10,500 kilometres of missing links. While continuous rail infrastructure already connectsNorth-East Asia38 and Europe, the infrastructure is somewhat less coherent in other subregions when itcomes to cross-border rail connections.

Table II-7. Overview of the Trans-Asian Railway

Region CountriesNetwork length

(kilometres)

1. Existing lines

South-East Asia Cambodia, Indonesia, Lao People’s Democratic Republic, 13,900Malaysia, Myanmar, Singapore, Thailand, Viet Nam

North-East Asia China, Democratic People’s Republic of Korea, Mongolia, 45,000Republic of Korea, Russian Federation

Central Asia, Caucasus, Armenia, Azerbaijan, Georgia, Islamic Republic of Iran, 29,750Islamic Republic of Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Turkey,and Turkey Uzbekistan

South Asia Bangladesh, India, Nepal, Pakistan, Sri Lanka 17,650

Sub-total: 106,300

2. Missing links 10,500

Total TAR network: 116,800

Source: ESCAP, Priority Investment Needs for the Development of the Trans-Asia Railway Network, ST/ESCAP/2557, 2009.

Table II-8 below summarizes the missing links in the TAR network as well as the countriesconcerned and the status of the link. Such elements as the importance of the link in regional economicdevelopment or trade may influence the decision to support a particular project. However, the traffic-generating potential of each route compared with the cost of constructing the necessary infrastructure willno doubt be a crucial factor, especially if private sector investments are to be sought.

Table II-8. Missing links in the Trans-Asian Railway network

Link Countries Concerned Distance (km)Estimated Cost(US$ million)

Central Asia and the Caucasus region, including the Islamic Republic of Iran and Turkey

Gagarin-Meghri Armenia-Islamic Republic of Iran 469.6 2,000

Tatvan-Van Turkey 240 N/A

Qazvin-Rasht-Anzali-Astara Islamic Republic of Iran 370 969

Azerbaijan 8.2 12.4

378.2 981.4

Kars-Akhalkalaki Turkey 76

Georgia 29

105 420

Balykchi-Arpa Kyrgyzstan 357 2,000

Uzgen-Arpa-Torugart-Kashi Kyrgyzstan 270 2,000

China

38 China, Kazakhstan, Korean Peninsula, Mongolia, Russian Federation.


Table II-8. (continued)

Link Countries Concerned Distance (km)Estimated Cost(US$ million)

Arak-Khosravi-Khaneghein Islamic Republic of Iran-Iraq 566 820(up to border)

Sangan-Herat Islamic Republic of Iran 77 78

Afghanistan 114 75(61 + 53) (for 61-km)

191 153

China/North/North-East Asia

Thannaleng-Kunming Lao People’s Democratic Republic 570 1,000

China 599 2,980

1,169 3,980

Lashio-Dali Myanmar 142 480

China 350 2,162

492 2,642

Denchai-Tachilek-Jinghong Thailand 326

Myanmar 195

China 141

589 2,138

South-East Asia

Sisophon-Aranyaprathet Cambodia 48 80

Thailand 6 0.5

54 80.5

Bat Deng-Trapeang Se/ Cambodia 257 480

Loc Ninh-Hanoi Viet Nam 129 949

385 1,429

Vientiane-Mu Gia-Vung An Lao People’s Democratic Republic 450 2,342

Viet Nam 119 143

569 2,485

Bua Yai-Savannakhet Thailand 283 908

Lao People’s Democratic Republic 4 6.3

287 914

Ubonratchatani-Pakse-Savannakhet- Thailand 90 288

Devsavanh-Dong Ha Lao People’s Democratic Republic 415 710

Viet Nam 84 226

589 1,224

Namtok-Thanpyuzayat Thailand 153 491

Myanmar 110 246

263 737

South Asia

Dalbandin-Gwadar Pakistan 515 1,250

Dohazari-Gundum Bangladesh 129 300

Kalay-Jiribam Myanmar 127 98

India 219 649

346 747

II. Railways 27

Over the period 2009-2011, heightened interest has been expressed to put in place the missing linksand a number of initiatives are being implemented. Through a tripartite agreement between thegovernments of the Islamic Republic of Iran, Azerbaijan and the Russian Federation, the Iranian IslamicRepublic Railways is constructing the 380-kilometre Qazvin – Astara line section that will complete theNorth-South Corridor and offer direct rail movement between the Baltic Sea and the Persian Gulf throughthe Russian Federation and Azerbaijan with connection to Western Europe and the Indian subcontinent. Thefirst phase of this rail linkage, between Qazvin and Rasht is nearing completion. In another development,the Governments of Azerbaijan, Georgia and Turkey are cooperating to construct a 105-kilometre railsection between Kars (Turkey) and Akhalkalaki (Georgia). Costing an estimated US$ 420 million, theproject is part of the Kars-Tbilisi-Baku project with additional investment aiming at double-tracking andelectrifying the entire corridor. The Government of Azerbaijan has committed US$ 775 million to theproject, while the Government of Georgia has committed to build the Tbilisi by-pass to ease movementaround the capital.

Yet, if the required funding is allocated to planned projects, no progress will be more impressivethan in South-East Asia which, to date, has the longest route-kilometres of missing links on the TARnetwork. In the period 2009-2011, a number of feasibility studies have been finalized on all missing linksand pledges of financial support have been expressed from governments under national plans or bilateralassistance, in particular under the drive of the Ministry of Railways of China regarding rail infrastructuredevelopment between the province of Yunnan and neighbouring countries, i.e. Lao People’s DemocraticRepublic and Myanmar.

Related projects form an integral part of the transport plan developed by the ASEAN secretariatunder its “Brunei Action Plan” of November 2010 that recognizes that “an efficient, secure transportnetwork is vital for realizing the full potential of regional economic integration as well as further enhancingthe attractiveness of the region as a single production, tourism and investment destination”.39 Whilerecognizing that, due to financial constraints, the Singapore-Kunming Rail Link (SKRL) project hasprogressed slowly, the Plan lists as one of its goals the establishment of “efficient integrated, safe andenvironmentally sustainable regional road and rail corridors linking all members and regional tradingpartners”.40 Further the Plan stipulates that the “political motivation to complete the SKRL is significantlyhigh” and sets 2020 as the year by which the eight missing links shown below will be completed, therebyrail-connecting all ASEAN countries.41

In many countries, the construction of the missing links is part of wider national programmes toenhance rail transport infrastructure. In Cambodia, network rehabilitation is driven under a 30-yearconcession agreement to Toll Holdings Ltd. to operate and maintain the existing railways. The Agreementbecame operative in October 2009. In Viet Nam, rail development projects follow the Railway Law of 2008establishing the country’s Railway Development Strategy to 2020.42

Countries Links Distance (km)Target year for

completion

Cambodia Poipet-Sisophon 48 2013

Cambodia Phnom Penh-Loc Ninh 255 2015

Lao People’s Democratic Republic Vientiane-Thakek-Mu Gia 466 2020

Myanmar Thanbyuzayat-Three Pagoda Pass 111 2020

Thailand Aranyaprathet-Klongluk 6 2014

Thailand Three Pagoda Pass-Namtok 153 2020

Viet Nam Loc Ninh-Ho Chi Minh 129 2020

Viet Nam Mu Gia-Tan Ap-Vung Ang 119 2020

39 ASEAN secretariat, Brunei Action Plan, I. Introduction.40 ASEAN secretariat, Brunei Action Plan, II. ASEAN Transport Sector: Accomplishments and Challenges.41 ASEAN secretariat, Brunei Action Plan, III. Strategic Goals, Actions and Milestones for 2011-2015.42 Report of the 13th Special Working Group Meeting on Singapore-Kunming Rail Link, Nay Pyi Taw, Myanmar, 18 October2011. Progress report by Cambodia.


China for its part has continued over the period to channel resources into upgrading its existinglinks and further extending them to their ASEAN neighbours. Towards Viet Nam, the Yuxi-Mengzi(141 km) and Mengzi-Hekou (141.4 km) line sections are expected to be completed in 2012 and 2013,respectively. Towards Lao People’s Democratic Republic, capacity expansion on the Kunyang-Yuxi linesection (49 km) is ongoing and expected to be completed in 2012, while a feasibility study on the extensionof the line from Yuxi to Mohan at the border with Lao People’s Democratic Republic is in progress. Finally,towards Myanmar, capacity expansion of the Kunming-Guangtong line section (94 km) is due forcompletion in 2013, while similar work on the Guangtong-Dali section (175 km) started in 2011. As regardsthe missing link, construction is in progress on the first section from Dali to Baoshan (133.6 km) with 2013targeted for completion. The remaining section to the border point at Ruili is under preliminary design.43

Other missing links have been earmarked as priority projects by concerned countries such as the219-kilometre Jiribam-Moreh line section that will extend India’s rail system to the border with Myanmar.However, in early December 2011, following political disagreement between the local government of thenorth-eastern state of Manipur and the central government in Delhi, construction was halted on the firstsection between Jiribam and Tupul.44

Overall, according to ESCAP estimates, building the 10,500 km of missing links in the TARnetwork will require up from US$ 25 billion, with this figure likely to be revised upwards as past studiesare updated.

2. Break-of-gauge

As the TAR network traverses an extensive geographical area, it is understandable that itsconstituent countries have different standards and levels of development. In their most visual form – albeitnot the most constraining one – different standards have resulted in the adoption of different track gauges45

by national railways. The mainline railway networks that make up the TAR are comprised of five differenttrack gauges: 1,676 mm, 1,520 mm, 1,435 mm, 1,067 mm and 1,000 mm.46 A break-of-gauge occurs whenthe railways of neighbouring countries with different track gauges meet at the border. Table II-9 below sumsup break-of-gauge points on the TAR network.

Discontinuity of track gauge also occurs within individual domestic railway networks47 as in, forexample, Bangladesh, India and Pakistan. However, the routes nominated by India and Pakistan as part ofthe TAR network are all of 1,676 mm configuration. Australia, which due to its geographical location is nota member of the TAR network, also uses different track gauges.

Table II-9. Breaks-of-gauge on the Trans-Asian Railway

Countries concerned Gauge transition

China � Viet Nam 1,435 mm � 1,000 mm

China � Russian Federation 1,435 mm � 1,520 mm

China � Kazakhstan 1,435 mm � 1,520 mm

China � Mongolia 1,435 mm � 1,520 mm

Russian Federation � Democratic People’s Republic of Korea 1,520 mm � 1,435 mm

Turkmenistan � Islamic Republic of Iran 1,520 mm � 1,435 mm

Pakistan � Islamic Republic of Iran 1,676 mm � 1,435 mm

Armenia � Turkey 1,520 mm � 1,435 mm

Bangladesh

East Zone � West Zone 1,000 mm � 1,676 mm

43 Report of the 13th Special Working Group Meeting on Singapore-Kunming Rail Link, Nay Pyi Taw, Myanmar, 18 October2011. Progress report by China.44 Source: The Times of India, 10 December 2011.45 The track gauge is the distance in millimetres between the inner surfaces of each rail.46 Table 1 in Part A of this chapter indicates the track gauges predominantly used on the region’s individual rail networks.47 Various techniques exist to overcome these discontinuities. They include transshipment (manual or mechanical), bogieexchange and the use of variable gauge bogies.

II. Railways 29

In a number of other countries, gauges different from the predominant one exist on spur lineslocated in the vicinity of territorial limits to facilitate cross-border movements. Thus China, which operatesa mostly standard gauge (1,435 mm) network, has a metre gauge line section from the border withViet Nam to Kunming and Viet Nam which operates a mostly metre-gauge network has a number of shortstandard gauge or dual gauge48 lines in the north of the country to facilitate traffic with China. In othercases, the railways of the Russian Federation have extended a broad gauge line (1,520 mm) over 54 km intothe territory of the Democratic People’s Republic of Korea to reach the port of Rajin and the broad gaugeutilized by Pakistan (1,676 mm) extends into the territory of the Islamic Republic of Iran to Zahedan.

Recognizing that break-of-gauge points can be an obstacle to smooth operation, a number ofrailways have invested resources to enhance the efficiency of cross-border stations where a break-of-gaugeoccurs. Thus, modernization of yard infrastructure has been implemented by Russian Railways atZabaykalsk and Kazakh Railways at Dostyk to facilitate cross-border movements to and from China. In2011, Russian Railways completed the rehabilitation of the 54 km line section from Khasan at the borderwith the Democratic People’s Republic of Korea to its port of Rajin and initiated collaboration with therailways of Austria, Slovakia and Ukraine on a US$ 4.3 billion project to construct a broad gauge line fromKosice (Ukraine) to Vienna via the Slovak capital at Bratislava to reach deeper into the heart of Europe.49

While it is unlikely that individual railway organizations will envisage re-gauging their entirenetwork in the near term, Bangladesh and India have adopted policies to convert their existing metre-gaugeand narrow gauge line sections to broad-gauge. In Bangladesh, where the policy is relatively new,Bangladesh Railway has started to ‘dual-gauge’ a number of line sections to facilitate movement betweenthe East Zone, which operates on metre-gauge, and the West Zone, which operates predominantly on broadgauge. As of 2010, 375 km of routes had been dual-gauged.50

In India, “Project Unigauge” was launched in fiscal year 1990-1991 with the conversion to broadgauge of Jaipur-Sawai Madhopur, Delhi-Rewari, Mahesana-Viramgam and Chhapra-Aunrihar. Since then,Indian Railways has allocated part of its annual budgets to the project. 1,516 kilometres and 837 kilometresof track were converted during 2009-2010 and 2010-2011, respectively, and a target of 1,017 km has beenfixed for 2011-2012.51

Finally, it must be noted that additional break-of-gauge points will appear on the TAR networkwhen some of the missing links are in place. This will be the case in 2013 when the Kars (Turkey) –Akhalkalaki (Georgia) section is completed. Although not yet designated to be part of the TAR network, thesoon-to-be-completed new 677-km corridor from Uzen in Kazakhstan to Gorgan in the Islamic Republic ofIran via Turkmenistan will also create a break-of-gauge at the border between the Islamic Republic of Iranand Turkmenistan.

E. Selected Investment Projects in the Railway Sector

Table II-10 summarizes selected railway investment projects in the ESCAP region completedduring the past five years, currently committed to or in progress, or planned for commencement within thenext five years. As with the table of selected road infrastructure projects, the list is not intended to becomprehensive, but presents a sample of some of the more significant construction undertakings in theregion.

48 Dual gauge involves the provision of two track gauges on a single track foundation through the insertion of a third rail.49 Ukraine operates on a broad gauge line similar to the one in the Russian Federation, while the railways of Austria andSlovakia operated on standard gauge.50 Bangladesh Railway, Information Book, 2010.51 Rail Business, “Gauge Conversion and Execution of New Route Kilometers on Indian Railways”, 28 August 2011 throughwww.railbizindia.com


Table II-10. Selected railway infrastructure development projects in the ESCAP region(as of 2011)

Country/Region Selected railway investment projects Status

Afghanistan Hairatan to Mazar-e-Sharif Railway Project

Overview: The Project involved the construction of a new 75-kilometre (km) railwayline between Hairatan at the border with Uzbekistan and Mazar-e-Sharif inAfghanistan. The Project represents a first phase of a larger rail network plannedacross the north and other parts of the country, including links to Herat, Tajikistan, andPakistan. It forms part of the Transport Strategy and Action Plan agreed under theCentral Asia Regional Economic Cooperation (CAREC) Programme.

Funding: US$ 170 million, ADB, Government of Afghanistan.

Status: Construction of the railway line and related facilities has been completed, andpreparations are progressing to establish commercial operations of the new line.

Completion date: September 2011.

Sevan to Meghri Railway Project

Overview: Islamic Republic of Iran and Armenia agreed on the joint construction ofa 470-kilometre railway, passing through Armenian territory and including the missinglink Vanadzor – Fioletovo/Dilijan). The project will connect Armenia’s rail network tothe Islamic Republic of Iran’s Persian Gulf ports. It also has economic significance forArmenia’s Syunik region, for its mining, agricultural and construction sectors.

Funding: US$ 1.5 billion. In 2009, Russia announced its intention to participate in therailway and committed part of the $ 100 million required for the first 31 km section ofthe rail line.

Completion date: 2014-2015.

Australia 2009-2018 Hunter Valley ARTC Nation Building Programme

Overview: A package of projects aimed at increasing rail capacity along a keycommodity supply corridor in New South Wales. Notable features include additional(duplication and/or triplication) tracks, new signalling systems and higher-capacitypassing loops.

Funding: AU$ 508 million.

Completion date: 2012, in phases.

Rehabilitation and construction of Marabda-Kartsakhi Baku-Tbilisi-Kars TARand linkage

Overview: As part of a programme to establish a railway connection betweenAzerbaijan, Georgia and Turkey, the project involves the construction andrehabilitation of the Marabda-Kartsakhi Baku-Tbilisi-Kars section of the TAR networkin these three countries. As part of the Baku-Tbilisi-Kars railway a new 105 km branchwill be built. About 76 kms of this branch will stretch via Turkey and the remaining29 kms will go through Georgia.

Funding: Azerbaijan government loan of USD 575 million to Georgia, with the firsttranche of USD 138 million for the rehabilitation and construction of the sectionbetween Tetritskaro and Akhalkalaki. The Azerbaijani government is also extendinga loan of USD 775 million for construction and rehabilitation of the Marabda borderwith Turkey (Kartsakhi) section of the TAR.

Status: Construction has begun on the linkages in each country.

Completion date: 2012.

Completed

Armenia-IslamicRepublic of Iran

In Progress

In Progress

Azerbaijan,Georgia, Turkey

In Progress

II. Railways 31



Bangladesh Proposed Multi-tranche Financing Facility and Technical Assistance Grant:Railway Sector Investment Programme

Overview: The investment will support two broad programmes: railway sector policyand capacity building reform of Bangladesh Railway (BR) and infrastructure androlling stock capacity improvement projects to overcome capacity bottlenecks insectors where such investments are both economically and financially viable, e.g., theDhaka-Chittagong and the Dhaka-Darsana-Khulna corridors where it can supportmajor direct investment.

Status: In April 2010, the ADB called for tenders for the first project: the constructionof Double Line Track from Tongi to Bhairab Bazar including Signalling on Dhaka-Chittagong Main Line.

Funding: US$ 924 million, ADB, Government of Bangladesh.


Bangladesh Construction of Dohazari-Ramu-Cox’s Bazar and Ramu-Gundum metre-gaugeline sections of Bangladesh railway network

Overview: First planned in 1890, the 100 km line will start from the current railhead atDohazari, south-east of Chittagong, and run to Satkania, Dulahazra, Chakarin, Edgaon,Ramu and Cox’s Bazar, with four major river bridges. A 28 km branch will also runfrom Ramu to the border with Myanmar at Gundum. In effect this will close one of themissing links in the Trans-Asian Railway network, and provide a rail connectionbetween South and South-East Asia.

Funding: The estimated cost is about US$ 300 million, which is being co-funded bythe Asian Development Bank and the government of Bangladesh.

Status: Construction began in April 2011.


China Lanzhou-Chongqing Railway Project

Overview: The proposed project is the construction of the Lanzhou-ChongqingRailway starting from the east Lanzhou station and ending at the North Beibei stationin Chongqing (Figure I-1). The new line consists of 832.94 kilometre of mainline ofwhich, 799 kilometre is new line. The double-track electrified line will be constructedto MOR’s Class I standards. Its carrying capacity is designed to provide high speed,200 kilometre/hr passenger trains, as well as lower speed express passenger trainservice (160 kilometre/hr) and double stack container freight trains at 120 kilometre/hr.

Funding: US$ 8.2 billion, ADB, Ministry of Railways (MOR), Sichuan and GansuProvinces.


China Third National Railway Project

Overview: Expansion of the capacity of the railway system between Guizhou andYunnan provinces. The two basic components of the project includes: (1) theelectrified railway line between the city of Liupanshui in Guizhou Province and thecity of Zhanyi in Yunnan Province will be upgraded to increase its capacity and allowfor higher operating speeds of trains; and (2) the capacity of the Ministry of Railwayson railway planning, management and technology will be strengthened, throughstudies, technical assistance and training.

Funding: World Bank, US$ 1,165.6 million.


In Progress

In Progress

In Progress

In Progress




China Guiyang-Guangzhou Railway

Overview: The project will provide additional capacity and reduce transport timebetween south-west China and the Pearl River delta region. The project is theconstruction of a new double track electrified railway line of about 857 kilometre andrailway stations between Guiyang in Guizhou province and Guangzhou in Guangdongprovince (GuiGuang line).

Funding: World Bank, ADB, US$ 12,527 million.


China Taiyuan-Zhongwei Railway

Overview: In 2006, the Asian Development Bank approved a loan for the developmentof the Taiyuan-Zhongwei Railway. The project is designed to promote sustainableeconomic growth by constructing 944 kilometres of railway between Taiyuan (Shanxi)to Zhongwei and Yinchuan (Ningxia). 520 kilometres of this will be double track(from Dingbian to Yinchuan) and the remaining 424 kilometres will be single track. In2008, China Railway Electrification Bureau (Group) Co., Ltd. won the constructioncontract for project at a bidding price of RMB 1.17 billion.

Funding: ADB, US$ 300 million.


China Dali-Lijiang (Yunnan Province) Railway Project

Overview: Construction of 167 kilometres of single-track, standard gauge, Class Irailway, reserved for electrification, between Dali and Lijiang, and expand the capacityof the existing Guangtong-Dali line (Guangda line) to accommodate additional traffic.

The new line comprises 11 passenger stations, as well as freight yards.

Funding: US$ 548 million, ADB, AFD, Province of Yunnan.

Completion date: December 2011.

India Dedicated freight corridor projects (Phase I)

Overview: In March 2007, the first two (of six) dedicated freight corridors wereapproved in principle by the Indian government – the Eastern Corridor (Rewari-Vadodara-JNPT), and the Western Corridor (Sonenagar-Ludhiana). They are intendedto form the first phase of a freight network totalling around 10,000 kilometres, whichis to be developed over the next decade at a cost of approximately US$ 18 billion. Thesix corridors are aimed at easing capacity constraints on the routes linking themetropolitan regions of New Delhi, Kolkata, Mumbai and Chennai, which at presentcarry around 80 per cent of India’s rail freight traffic.

Funding: Approximately one-third of the initial phase is to be funded through equityand two-thirds from debt. The Eastern Corridor is estimated to cost approximatelyUS$ 3,928 million and the Western Corridor is estimated to cost approximatelyUS$ 3,687 million. Negotiations are underway for loans from the Japan Bank forInternational Cooperation, World Bank and Asian Development Bank.

Status: In June 2011, the Dedicated Freight Corridor Corporation of India (DFCCIL)began a bidding process to select Indian and Japanese joint venture partners to financeand build the 1,490-km western corridor. The construction will occur in two phases.The first will be a 1,000 km stretch between Rewari in Haryana and Vadodara inGujarat.

Completion date: 2016 for 1st phase, 2017 for entire network of 3 phases of twocorridors.

In Progress

In Progress

In Progress

In Progress

II. Railways 33

India Construction of Jiribam-Moreh (India)/Tamu (Myanmar)-Kalay section of railconnection between the two countries.

Overview: Ministry of Railways sanctioned the construction of rail link in 2004. Thisproject will extend a linkage between Jiribam – Tupul, which has been underconstruction since 2004, from Tupul to Imphal, and from there to Moreh. Whencompleted, the railway will connect India’s north-eastern state of Manipur withMyanmar. This is a missing link in the southern corridor of the Trans-Asian Railwayand its construction will progress the establishment of a rail link between India andChina via northern Myanmar. On the Indian side of the border the total length of thelink between Jiribam and Moreh is 219 km and the section between Jiribam andImphal is 98 km.

Funding: The estimated cost of building the section between Jiribam and Imphal isUS$ 589 million which is being funded by Manipur state and federal governments ofIndia.

Status: The project has been designated as a ‘national project’ to reflect its importanceand the need for it to be quickly implemented. Construction has begun.

Completion dates: Jiribam-Tupul: 2014; Tupul-Imphal: 2016.

Indonesia Indonesia High-Speed Rail Jakarta Bandung Surabaya

Overview: In 2008, it was announced that the Department of Transportation wasseeking investors for a 683-kilometre high speed line between Jakarta and Surabaya.

Funding: US$ 6.14 billion. The intention of the Indonesian Government was tofinance the project through public private partnerships.

Status: In 2010 the Directorate of Railways of the Ministry of Transportation calledfor expressions of interest from Consortia interested in participating in a public privatepartnership to develop the railway. In August 2010, feasibility studies were conductedby consortia, and proposals were reported to have been submitted by Chinese, French,and German firms.

Completion date: No completion date available yet.

Islamic Republic of Iran-Turkmenistan-Kazakhstan Railway Project

Overview: The total route of the railway is 1,000 kilometres, of which 90 kilometreswould be in the Islamic Republic of Iran, 700 kilometres in Turkmenistan and210 kilometres in Kazakhstan.

Funding: US$ 650 million, Islamic Development Bank.


Mongolia South Gobi-People’s Republic of China Railway Development Programme

Overview: The Project will construct and operate approximately 225 kilometres ofrailway located in Mongolia’s South Gobi Desert from Ukhaa Khudag (UHG) coalmine to Gashuun Sukhait on the Mongolia – PRC border in the Inner MongoliaAutonomous Region of the PRC. The principal needs for the railway are to exportcoking coal, copper, and other mineral resources originating from various mines inSouth Gobi to PRC.

Funding: US$ 243 million, ADB, private sector (undisclosed).

Completion date: No completion date available yet.



Islamic Republic ofIran-Kazakhstan-Turkmenistan

Announced

Planned

Planned

In Progress


Sri Lanka Upgrading of Colombo-Matara railway line

Overview: The upgrade/construction of a railway line linking Colombo-Matara is splitinto two stages. During the first stage, the existing rail line will be strengthened byadding new rails and sleepers. During the second stage, a dual railway line will beconstructed from Kalutara South to Matara.

Funding: Sri Lankan Government, US$ 34 million and foreign funding (by way ofloan or grant) of US$ 137 million.

Completion date: Stages 1 and 2 of the project are due for completion by 2012.

Sri Lanka Matara-Kataragama Railway line Extension (Stage 1 and 2)

Overview: The construction of a 110-kilometre railway line between Matara andKataragama is aimed at benefitting commuters who travel to the remote areas ofMatara by promoting economic development and inter-regional connectivity. The firststage of the project involves the construction of 27 kilometres of track between Mataraand Beliatta. The second stage of the project involves the construction of 83 kilometresof railway between Beliatta and Kataragama. Construction is due to begin late 2007.

Funding: US$ 54 million Sri Lankan Government, and foreign funding (by way of loanor grant) of US$ 217 million.

Completion date: Stages 1 and 2 of the project are due for completion by 2014.

Turkey Ankara-Istanbul High-Speed Train Project

Overview: A new 409-kilometre double-line track will be built between Ankara andIstanbul. The project aims to cut rail travel time between the two cities from 6 hours30 minutes to 3 hours. The project is split into two phases: the construction ofa 251-kilometre railway between Sincan and Inonu, and the construction ofa 158-kilometre railway between Inonu and Kosekoy. High speed trains coming fromAnatolia will use the Marmaray tunnel, which is being built under the Bosphorusbetween the two sections of Istanbul, to approach downtown Istanbul.

Funding: US$ 2.01 billion, US$ 4,500 million including Marmaray Project.

Completion date: 1st phase (Ankara to Eskisehir) completed in March 2009, 2nd phaseincluding Marmaray Project expected to be completed in 2013.

Uzbekistan Railways Development Project

Overview: The project consists of the rehabilitation of 137 kilometres of track androadbed between Marokand and Karshi. This single track line is located in the south ofUzbekistan and is linked to both Afghanistan via a rail bridge over the Amudarya Riverand to Turkmenistan and Tajikistan.

Funding: US$ 72 million, ADB, Government of Uzbekistan.


Viet Nam Greater Mekong Subregion, Kunming-Haiphong Transport Corridor: Yen Vien-Lao Cai Railway Upgrading Project

Overview: The Government of Viet Nam is preparing the Kunming-HaiphongTransport Corridor project to upgrade and rehabilitate transport infrastructure from theHaiphong Port in Viet Nam to Kunming City in China. This component of the corridorproject is aimed at upgrading 285 kilometres of railway from Yen Vien to Lao Cai(near the border with China).

Funding: US$ 64 million, ADB.



Country/Region Selected railway investment projects StatusIn Progress

In Progress

In Progress

Planned

In Progress

III. Roads and Highways 35

Australia (1990-2010)

New Zealand (1990-2010)

Sri Lanka (1990-2007)

Japan (1990-2006)

Cambodia (1990-2010)

Myanmar (1990-2005)

Vanuatu (1993-2001)

Papua New Guinea (1990-2001)

Macao, China (1999-2010)

Mongolia (1990-2010)

Turkey (1990-2010)

Azerbaijan (1990-2004)

Singapore (1990-2010)

Uzbekistan (1990-2001)

Turkmenistan (1990-2001)

Fiji (1990-2001)

Democratic People’s Republic of Korea (1990-2000)

Solomon Islands (1990-2001)

Russian Federation (1990-2010)

Hong Kong, China (1990-2010)

Philippines (1990-2003)

Islamic Republic of Iran (1990-2006)

Armenia (1990-2009)

Pakistan (1990-2010)

Bangladesh (1990-2010)

Republic of Korea (1990-2010)

Malaysia (1990-2006)

Kyrgyzstan (1990-2006)

Indonesia (1990-2006)

India (1990-2008)

Afghanistan (1990-2006)

Lao People’s Democratic Republic (1990-2010)

China (1990-2010)

0% 1% 2% 3% 4% 5% 6% 7%

Average annual rate of growth in road length

III. ROADS AND HIGHWAYS

A. National Road Sector Development

Over the past two decades, road length in the ESCAP region has grown at a faster pace than in anyother parts of the world.

Figure III-1. Annual average growth in road length in selected ESCAP countries

Source: ESCAP Statistics database 7 September 2011.


In fact, during this period many Asian countries have doubled their road network length52, which isan enormous achievement by historical standards. Figure III-1 shows the annual average growth in roadlength for selected ESCAP countries between 1990 and the latest year for which data is available for eachcountry. In this period, the highest rate of road length growth was in China (more than six per cent peryear). The growth of road lengths in some other developing countries such as Afghanistan, Bangladesh,India, Indonesia, Kyrgyzstan, Lao People’s Democratic Republic, Malaysia, and Pakistan, was also solid,ranging from about 2.2 to 5.4 per cent year. Table III-1 shows the total road network length in selectedESCAP countries. India and China have the largest road networks in the ESCAP region, each comprisingabout 4 million kilometres of road. There are now 12 Asian countries with national road length larger than100,000 kilometres.

Table III-1 also lists road density: that is, road length per land area. Road density is a function ofboth the maturity of an economy’s road network and the geography of a country. Rich countries with a highpopulation density, such as Japan, Singapore, and Macao, China have the highest road density. But poorercountries with high population density can also have quite high road density, as illustrated by the case ofBangladesh and Sri Lanka. Order of magnitude differences in road density between countries withotherwise similar population density show the high potential for increases in road length in many ESCAPdeveloping countries, including India and China. Table III-1 also shows that the sparsely populateddeveloped countries of Australia and New Zealand have the highest road network length per capita in theESCAP region, whereas Hong Kong, China; Macao, China; and Myanmar have the lowest road length percapita, albeit for different reasons.

Table III-1. Road lengths and road densities, various countries

Road LengthRoad length Road length (km)

Country(km)

(km) per capita per square km(1,000 people) of land area

Afghanistan (2006) 42,150 1.34 0.06

Armenia (2009) 10,818 3.50 0.36

Australia (2010) 812,972 36.51 0.11

Azerbaijan (2004) 59,141 6.44 0.68

Bangladesh (2010) 311,065 2.09 2.16

Cambodia (2010) 39,600 2.80 0.22

China (2010) 4,008,200 2.99 0.42

Democratic People’s Republic of Korea (2000) 31,200 1.28 0.26

Fiji (2001) 3,440 4.00 0.19

Georgia (2006) 20,329 4.67 0.29

Hong Kong, China (2010) 1,987 0.28 1.81

India (2008) 4,110,000 3.36 1.25

Indonesia (2006) 506,444 2.11 0.27

Islamic Republic of Iran (2006) 172,927 2.34 0.10

Japan (2006) 1,196,999 9.46 3.17

Kazakhstan (2006) 91,563 5.71 0.03

Kiribati (2001) 670 6.70 0.82

Kyrgyzstan (2007) 34,000 6.37 0.17

Lao People’s Democratic Republic (2010) 39,585 6.38 0.17

Macao, China (2010) 362 0.67 12.92

Malaysia (2006) 90,127 3.17 0.27

Micronesia (Federated State of) (2001) 240 2.16 0.34

Mongolia (2010) 49,250 17.87 0.04

Myanmar (2005) 27,000 0.56 0.04

New Zealand (2010) 94,016 21.52 0.34

52 UNESCAP, 2007, Statistical Yearbook.


B. Road Vehicle Fleets and Motorization Trends

1. Road vehicle fleets and vehicle density

Despite inconsistencies in data measurement and definition, motorization rates and vehicle densityare often used as indicators of a country’s development. Figure III-2 compares the average annual growth inthe number of road vehicles in selected ESCAP countries over the period 1993-2008. For the whole ESCAPregion, the number of vehicles grew at an average 5 per cent per year, from 128 million in 1993 to roughly263.5 million in 2008. These estimates include both passenger and commercial registered vehicles, but donot include two-wheelers. The most outstanding growth in road vehicle numbers has occurred in China andIndonesia, with annual average rates of 13 and 11.4 per cent respectively. In addition, at 49 million, theChinese vehicle fleet was the second largest in the region (after Japan), while Indonesia had the fourthlargest at 17 million. The Russian Federation has the third largest vehicle fleet with 35 million vehicles.

At the other extreme, road vehicle fleets in Nepal, Japan, and Papua New Guinea grew less thantwo per cent per year from 1993 to 2008. While the annual rate of growth of road vehicles in Japan wasvery low, it has the highest number of motor vehicles (75.5 million) in the region. By contrast, Nepal andPapua New Guinea both have very low numbers of motor vehicles, with 139,000 in Nepal and about 56,000in Papua New Guinea. Australia, Singapore, New Zealand, and Fiji had growth rates between two and fourper cent, below the regional average. Among these countries, however, the total number of vehicles inAustralia was the 7th highest in the region. With 14 million road vehicles in 2008, this was only 3 millionlower than the road vehicle fleet size of the far more populous India.

Figure III-3 illustrates the wide range of vehicle densities in the ESCAP region. Vehicle density isthe number of road vehicles in a country divided by the length of roads. The variable length of roads issimply the route length and not the lane length, as the latter is not available for most countries. Thus,vehicle density provides only limited information on possible under-provision of road infrastructure or thepotential for traffic jams.

The average vehicle density in the ESCAP region is roughly 73 road vehicles per road kilometre,comparable to that of Japan. Among the selected economies for which data is available, five stand out withvery high vehicle densities of between 240 and 342 motor vehicles per kilometre of road. Not surprisinglyin three of these, Hong Kong, China; Singapore; and Brunei Darussalam the road networks are relatively

Pakistan (2010) 260,420 1.50 0.33

Papua New Guinea (2001) 19,600 2.86 0.04

Philippines (2003) 205,497 2.32 0.72

Republic of Korea (2010) 105,565 2.19 1.06

Russian Federation (2010) 1,145,000 8.01 0.06

Singapore (2010) 3,377 0.66 4.78

Solomon Islands (2001) 1,391 2.59 0.05

Sri Lanka (2007) 97,286 4.66 1.48

Tajikistan (2001) 31,800 4.62 0.22

Tonga (2001) 680 6.54 0.91

Turkey (2010) 426,951 5.87 0.55

Turkmenistan (2001) 24,000 4.76 0.05

Uzbekistan (2001) 81,600 2.97 0.18

Vanuatu (2001) 1,070 4.46 0.09

Source: Based on data compiled from different sources including ESCAP Statistical database (accessed on 7 September 2011).

Table III-1. (continued)

Road LengthRoad length Road length (km)

Country(km)

(km) per capita per square km(1,000 people) of land area


small (between 1,500 and 2,800 kilometres) and passenger vehicle numbers per head of population are veryhigh by comparison with those in other member countries. As another point of comparison, vehicle densityin Fiji is 48.12 in a road network that is about 3,000 kilometres, comparable to the size of the road networksin Hong Kong, China; Singapore; and Brunei Darussalam. By contrast with these countries, vehicledensities in Bangladesh, Papua New Guinea, Cambodia, and India range from 1.68 to 8.5 motor vehiclesper kilometre of road.

2. Level of motorization

Figure III-4 illustrates the level of motorization in selected ESCAP economies, measured as thenumber of private cars per 1,000 people in a country. At lower levels of development, motorization isa reasonable proxy for GDP per capita, though such correlation would be best if the total number ofpassenger vehicles (private, public and commercial) with at least four wheels was used in the definition ofmotorization. As such, it may not be a good indicator of personal mobility. This is particularly the case forthe developing economies of South, South-East and East Asia where the share of two and three-wheelers inthe national vehicle fleet is often more than 60 per cent, in contrast to other world regions and thedeveloped countries.

Figure III-2. Average annual growth in the number of road vehicles, 1993-2008

Source: ESCAP Statistical database (accessed on 7 September 2011).

Nepal (1993-2007)

Japan (1993-2008)

Hong Kong, China (1993-2008)

Papua New Guinea (1993-2007)

Australia (1993-2008)

Singapore (1993-2008)

New Zealand (1993-2008)

Fiji (1993-2008)

Myanmar (1993-2008)

Brunei Darussalam (1993-2007)

Philippines (1993-2007)

Azerbaijan (1993-2007)

Pakistan (1993-2007)

Kazakhstan (1993-2008)

Bangladesh (1993-2008)

India (1993-2006)

Russian Federation (1993-2007)

Republic of Korea (1993-2008)

Turkey (1993-2008)

Sri Lanka (1993-2008)

Indonesia (1993-2008)

China (1993-2008)

0% 2% 4% 6% 8% 10% 12% 14%

Average annual increase in number of reigstered motor vehicles (excluding two-wheelers)


The overall motorization level of the ESCAP region is estimated at 119 private cars per 1,000persons, which is slightly higher than motorization in Singapore and Fiji (Figure III-4). Three countries inthe region have motorization levels greater than 500 private cars per 1,000 persons: Australia, New Zealandand Brunei Darussalam, with Brunei Darussalam having the region’s highest motorization level at 649private cars per 1,000 persons. Motorization levels are also comparatively high in Japan and Malaysia at319 and 298 private cars per 1,000 persons respectively.

A number of very populous ESCAP economies still have motorization levels that are one to twoorders of magnitude lower than that in developed countries. For example, motorization in Pakistan, India,China, and Indonesia was still as low as 9, 10, 27, and 43 private cars per 1,000 persons, respectively. Inother words, current numbers of road vehicles are only a fraction of what they will be in two to threedecades, as these populous and rapidly growing economies are expected to continue to experience rapidrates of motorization.

Figure III-3. Vehicle density in selected ESCAP economies, 2007-2008


Bangladesh (2008)

Papua New Guinea (2007)

Cambodia (2005)

India (2006)

Pakistan (2007)

Sri Lanka (2008)

Myanmar (2008)

Azerbaijan (2007)

Australia (2008)

Philippines (2007)

Kazakhstan (2008)

Nepal (2007)

Turkey (2008)

New Zealand (2008)


China (2008)

Fiji (2008)

Indonesia (2008)

Japan (2008)

Malaysia (2008)

Singapore (2008)

Brunei Darussalam (2007)


Hong Kong, China (2008)

0 50 100 150 200 250 300 350 400

Motor vehicles per km of road

1.68

3.05

7.62

8.48

11.02

13.04

13.76

14.50

17.68

17.90

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20.29

27.42

33.16

39.50

41.64

48.12

59.92

67.77

164.30

240.42

260.07

292.60

341.77


Figure III-4. Motorization rates in selected economies of the ESCAP region, 2005-2008


Bangladesh (2008)

Lao People’s Democratic Republic (2007)

Nepal (2007)

Myanmar (2008)

Papua New Guinea (2007)

Pakistan (2007)

India (2006)

Maldives (2008)

Philippines (2007)

Viet Nam (2007)

Micronesia (Federated State of) (2007)

Cambodia (2005)

Afghanistan (2008)

Sri Lanka (2008)

China (2008)

Tajikistan (2007)

Bhutan (2008)

Indonesia (2008)

Kyrgyzstan (2007)

Samoa (2005)

Mongolia (2008)

Thailand (2003)

Hong Kong, China (2008)

Azerbaijan (2007)

Turkmenistan (2008)

Turkey (2008)

Georgia (2007)

Armenia (2007)

Kiribati (2007)

Singapore (2008)

Fiji (2008)

Macao SAR, China (2008)

Kazakhstan (2008)



Malaysia (2008)

Japan (2008)

Australia (2008)

New Zealand (2008)

Brunei Darussalam (2007)

0 100 200 300 400 500 600 700

Passenger car vehicles per 000 population

1

2

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5

6

9

10

11

11

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16

18

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92

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C. Road Freight

Data on road freight activity in the ESCAP region is extremely limited. Based on available data,Datamonitor has compiled the total road freight task for China; Taiwan, Province of China; India; Republicof Korea; Singapore; Australia and Japan. It estimates that the total road freight for these countries in 2010was 3.4 billion freight tonne kilometres.53 Figure III-5 shows their estimated growth of the road freightsector over the last five years using a compound annual growth rate has been 6.3 per cent over the fouryears 2006-2010, with an expected growth of 7.5 per cent through the forecast period.

Figure III-6 shows the road freight task in those countries of the region for which this data isavailable. The task in China, which is in excess of 1 trillion freight tonne kilometres, is clearly the largest inthe region. There is no data in the World Development Indicators database for India, but the report on whichFigure III-5 is based indicates that, in value terms, the revenue generated by India’s road freight industry isapproximately 60 per cent of the revenue generated by the road freight industry of China.54 Using this ratio

53 Datamonitor, Road Freight in Asia-Pacific, March 2011.54 ibid.


as an estimator of the relative scale of the transport task suggests that the road freight in India would be inthe order of 600 to 700 billion tonne-kilometres, making India the second largest road freight market in theregion, followed by Japan, the Russian Federation, Australia, Turkey and Pakistan.

Table III-2 shows the rate of growth of the road freight task in selected ESCAP countries for whichthe data required to make this estimation is available. The table shows that road freight in Mongolia grewexceptionally quickly over the period 2003-2008, averaging over 26 per cent per annum. For similarperiods, in Viet Nam, Armenia and China the road freight task grew at a rate in excess of 10 per cent per

Figure III-5. Actual and forecast growth of road freight volumes in selected countriesof the region, 2006-2015

Source: Datamonitor Road Freight in Asia-Pacific, March 2011.

0

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s

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Figure III-6. Road freight task in selected ESCAP countries

Source: World Development Indicators Database, accessed 21 September 2011.

Notes: The WDI database does have a 2008 entry for China, but the value is anomalous and inconsistent with information available from othersources. The 2007 value has therefore been used in the figure.


annum, while growth Kazakhstan and Azerbaijan were only slightly lower than 10 per cent. Growth rates inthe other countries for which data is available were more modest, ranging from 2.4 per cent per annum inGeorgia to 4.4 per cent per annum in Australia.

D. Asian Highway Network Development

The Asian Highway spans over 142,000 km of roads and is comprised of 55 routes (see Figure III-7.Map of the Asian Highway Network). The extent of the Asian Highway network varies with thegeographical location and size of the country. As can be seen from Figure III-7, China accounts for thelongest national portion of the Asian Highway Network of any ESCAP country, with 26,707 kilometres.Four other countries have more than 10,000 kilometres of Asian Highway network: the Russian Federation(16,848 km); Kazakhstan (12,958 km); India (11,810 km); and the Islamic Republic of Iran (11,134 km). Atthe other end of the scale, there are two participating countries with less than 200 kilometres of AsianHighway network: Singapore (19 km) and Bhutan (165 km).

The average quality of the network also differs significantly between countries. Some ESCAPmembers have developed their portions of the Asian Highway to the minimum standard (Class III) specifiedin the Intergovernmental Agreement on the Asian Highway Network. For example, all of Japan’s AHnetwork is of Primary Class; all of Singapore’s and 79 per cent of the AH network roads in the Republic ofKorea are either Primary Class or Class I. In the case of China, 63 per cent of the AH network consists ofeither Primary Class or Class I roads, while these two categories account for 60 per cent of the AH networkroads in Malaysia.

However, road network quality is still a substantial challenge for a number of countries. Forexample, at least 40 per cent of the AH network in Afghanistan, Bhutan, Democratic People’s Republic ofKorea, Mongolia, Myanmar and Tajikistan do not meet Class III standards, while in Kyrgyzstan, Pakistan,and Sri Lanka, about 20 per cent of the AH network does not meet Class III standards.

The change in status of the quality of the network as a whole is given in Figure III-9(for classification, please refer to Box 1). Based on data received from 20 countries, between 2004 and2008 improvements to the quality of the network were achieved, with an additional 10,000 kilometres ofthe Highway being upgraded to higher standards and around 1,000 kilometres upgraded to meet minimumstandards.55 More specifically, as shown in Figure III-8, while only 9,300 of the 142,000 kilometres or7 per cent of the Highway network met primary road standards in 2004, by 2008, these standards applied toabout 20,700 kilometres or 15 per cent of the network. Similarly, while only 8,100 kilometres or 6 per cent

Table III-2. Growth of road freight task in selectedESCAP countries (per cent per annum)

Country (period)Annual average

growth rate

Australia (2003-2008) 4.4

China (2002-2007) 10.9

Kazakhstan (2003-2008) 9.6

Mongolia (2003-2008) 26.4

Viet Nam (2003-2007) 14.8

Armenia (2003-2008) 17.7

Azerbaijan (2003-2008) 9.8

Georgia (2001-2006) 2.4

Kyrgyzstan (2003-2007) 2.5

Lao People’s Democratic Republic (2003-2008) 3.4

Turkey (2003-2008) 3.6

Source: World Development Indicators database, accessed 21 September 2011.

55 UNESCAP, 2011 Statistical Yearbook for Asia and the Pacific, page 140.


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of the network met Class I standards in 2004, by 2008 about 24,000 kilometres or 17 per cent reached thesestandards. The biggest improvement, however, was in the number of kilometres of the network that wereupgraded from Class III to Class II. In 2008, 56,490 kilometres representing 40 per cent of the network metClass II standards, up from 34,600 kilometres or 25 per cent of the network four years earlier.

Another reflection of these improvements is the reduction in the length of network that still onlymeets or falls below Class III standards. Whereas 49,700 kilometres or 35 per cent of the network wasClass III roads and another 16 per cent fell below this category in 2004, these figures had fallen to 20 percent and 8 per cent respectively by 2008. The number of kilometres of roads that are categorised as ‘other’also fell between 2004 and 2008 from just over 17,000 kilometres to just under 1,200 kilometres.


E. Selected Investment Projects in the Road Sector

Table III-3 summarizes selected road and highway investment projects in the ESCAP region. Itincludes projects in progress or that are planned for commencement within the next five years. The list isnot comprehensive, but rather indicative of major road construction projects in the region. In makinga selection, priority has been given to Asian Highway road developments.

Figure III-9. Quality improvement of Asian Highway, 2004-2008

Source: Based on data from ESCAP Asian Highway database (accessed on 12 September 2011).

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Table III-3. Selected road and highway investment projects in the ESCAP region

Country Selected road and highway investment projects Status

Afghanistan Ring Road project

Overview: The Ring Road project is Afghanistan’s most important highway project,designed to rehabilitate and complete the ring road joining Kabul, Kandahar, Herat andMazar-i-Sharif.

Funding: The total cost of the ring road is estimated at US$ 2.5 billion. The projectwas funded by the international community, with the cost of this project was funded bydifferent donors. According to Ministry of Public Work, the percentage paid byUSAID was 30 per cent; Asian Development Bank 24 per cent, World Bank 12 percent, Pakistan 6 per cent and Islamic Republic of Iran 6 per cent. In addition theJapanese Government has contributed US$ 23.4 million to construct 31 km of the Ringroad near Mazar-e-Sharif as well as extending the existing road from Ferdousi Park.

Status: The project was expected to be completed in early 2009, but due to insecuritythe expected completion has been delayed. In June 2009, the Afghan governmentreported that the project was 90 per cent complete. In April 2011, the ring road wasreported to be nearly completed.


In Progress




Afghanistan Kunduz-Khulm Highway reconstruction

Overview: The project includes reconstruction and upgrading of the first 27.5 km longsection at the Khulm end of the Kunduz-Khulm Highway in north Afghanistan toprovide a direct connection between Mazar and Kunduz.

Funding: The project is being funded by KfW Entwicklungsbank at a cost of US$ 14.3million.

Status: KfW called for tenders for project management at the end of 2010.

Completion date: construction to be completed in February 2015.

Australia Great Eastern Highway Roe Highway Interchange

Overview: This project is designed to improve traffic flow, reduce congestion andcreate grade separation for heavy vehicles and general traffic through the busyintersection of the Great Eastern Highway and Roe Highway in Midland, WesternAustralia. One of Western Australia’s top 10 metropolitan road network black spotlocations, the interchange has predicted traffic counts of 90,000 vehicles a day by 2021.The project will involve design and construction of four new bridges, three underpassesand associated pathways, and modifications to two existing bridges.

Funding: In principle agreement for 50/50 sharing of AU$ 74 m funding by AustralianFederal Government and Western Australian Government.

Completion date: September 2012.

Azerbaijan Upgrading Yevlax-Ganja Road east-west corridor and related local roads

Overview: The Yevlax-Ganja road is part of the east-west road corridor between Bakuand the Georgian border, which is one of Azerbaijan’s main routes for external tradeand forms part of the Asian highway network. The project aims to improve theefficiency of transport on the project sections of the east-west road corridor byrebuilding 127 km of the two-lane paved road on the Yevlakh-Ganja and the Qazakh-Georgian border sections of the road, improving 65 km of local roads connecting toYevlax-Ganja Road. It also includes institutional strengthening for the road sectorreform, and cross-border facilitation at the border with Georgia at Red Bridge.

Funding: US$ 3 m from the Asian Development Bank and US$ 49 m from ordinarycapital resources.

Completion date: delay on target date of August 2009; Yevlax-Ganja Road upgradecompleted in early 2010, at which time local road upgrade tender was on hold.

Bangladesh Sub-Regional Transport Project Preparatory Facility

Overview: Involves the upgrade or construction of 2,000 km of land transport networkto enhance cross-border trade and establish greater connectivity across South Asia, andin particular between Bangladesh and India and Myanmar as well as China. The facilityincludes 14 road projects as well as 8 railway projects. The road projects include:Chittagong-Cox’s Bazar-Teknaf road, 374-km Petrapole (India)-Benapole-Jessore-Magura-Daulatdia-Paturia-Dharkar-Akhaura-Agartala (India), 664-km Phulbari(India)-Banglabandha-Hatikumrul-Mongla, 286-km Dawki/Tamabil-Sylhet-Dhaka,215-km Akhaura-Dharkar-Comilla-Chittagong, 138-km Burimari-Rangpur, 60-kmDhaka-Mawa-Bhanga and 219-km Sonamasjid-Rajshahi-Jamuna Bridge roads. Inaddition a number of national highways and other roads will be upgraded to four lanes.These include 222-km Doulatdia-Magura-Jhenaidah-Jessore-Khulna NationalHighway, 157-km Hatikamrul-Rangpur National Highway, 48-km Khulna-Monglaroad with link to Dhigraj to Mongla Ferry Ghat, 286-km Dhaka (Katchpur)-Bhairab-Jagadishpur-Shaistaganj-Sylhet-Tamabil, 138-km Rangpur-Teesta-Burimari(Lalmonirhat) and 204-km Sonamasjid-Rajshahi-Hatikamrul.

Funding: The estimated cost of the projects is US$ 6.45 billion.

Completion date: 300 kms of the network will be completed by 2012, and the rest by2013.

In Progress

In Progress

Planned/In Progress

NearlyCompleted




China Second Heilongjiang Road Network Development Project

Overview: Heilongjiang province needs more efficient transportation to supporteconomic growth, foster domestic and international trade, facilitate interregionalintegration, and reduce poverty. The project will complete an important missing linkbetween the north-east and north-west of Heilongjiang province, as well as improve thesystems used for road asset maintenance including planning and budgeting, andexecution of road maintenance works, including the introduction of more effectivemethods of maintenance contracting.

Funding: US$ 200.00 million.

Status: Loan contract signed 20 April 2010; by September 2011, 90 per cent of fundshad been committed as contracts and disbursements and 40 per cent of the projecthad been completed.

Completion date: 30 June 2015.

Georgia First East-West Highway Improvement Project

Overview: The First East-West Highway Improvement Project involves upgrading90 kilometres of the local road network covering 10 roads.56 The project aims tocontribute to the gradual reduction of road transport costs and improve access, ease oftransit, and safety along the central part of Georgia’s East-West corridor, by upgradinga segment of the East-West Highway from Tbilisi to Rikoti, including construction ofthe Rikoti Bypass Road and the rehabilitation of the Rikoti Tunnel.57 As well asupgrading the roads from two to four lanes the project aims to strengthen the capacityof the government, Roads Department and the local road construction industry to planand better manage the road network.

Funding: Funded by the Government of Georgia and a US$ 48 million loan from theWorld Bank, as well as funding from other agencies.

Status: The World Bank loan was approved in November 2009. The Rikoti BypassRoad was completed in April 2010. In August 2011, the Georgian Government calledfor tenders for consulting services to develop detailed designs of the upgraded roads.The tunnel is targeted for completion in December 2011.

India Chhattisgarh State Road Development Project

Overview: The primary task is the improvement of 1,700 km of state roads to provideimproved connectivity and access to development opportunities and social services,including health and education facilities. The work is being carried out in two phases.Phase I includes rehabilitation of 810 km of roads (Rajnandgaon-Mohla-MaharashtraBorder, Rajnandgaon-Kukamera-Kaeardha, Bilaspur-Mungeli-Pondi, Abbikapur-Ramanujganj, Gariyaband-Bardula, Kumhari-Berla-Bemetara-Mungeli, Kapasara-Hatidad, rajkheda-Dhanwar, Ramanujganj-Wadrafnagar and Bhanupratappur-Narayanpur Kondagaon), Phase II rehabilitation of 439 km of roads (Hasaud-Sarsiwa-Saraipali, Nandghat-Mungeli, Balodabazar-Hathband-Simga, Amleshwar-Funda,Abhanpur-Rajim-Gariyaband, Rajim-Mahasamund, Basna-Bilaigarh, Dhamtari-Nagri,Dhamtari-Gunderdehi).

Funding: The project is part financed through the ADB (US$ 180 million) and isestimated to cost US$ 285 million.

Status: A total of 21 civil works contracts and three consulting contracts have beenawarded. Phase I of the project is 83 per cent complete, Phase II 53 per cent.

Completion date: The project was due for completion in July 2011; in September 2011,99 per cent of contract funding and 87 per cent of disbursements had been utilized.

56 http://www.georoad.ge/index.php?que=eng/projects57 http://siteresources.worldbank.org/GEORGIAEXTN/Resources/East.pdf

In Progress

In Progress

In Progress




Persian Gulf Bridge

Overview: The 2.2 km-long bridge will link Qeshm, an economic free zone in thePersian Gulf, to the port city of Bandar Abbas in Hormozgan province, south of thecountry.

Funding: The project is estimated to have a price tag of US$ 906 million, of which15 per cent will be state funding and the remaining 85 per cent from domestic andforeign investment. The Austrian Government is contributing to the construction ona 10 year Build, Own and Transfer ownership basis.

Completion date: Construction has commenced in March 2011; expected completiondate is 2015.58

Kazakhstan Development of various highways

Overview: The Government of Kazakhstan, through the State Programme on theDevelopment of Highways for 2006-2012, is reconstructing 2,259 kilometres ofhighways. The reconstruction will take place on highway passes that lead from theborder of the Russian Federation, Aktobe, Kyzylorda, Skymkent, Taraz, Almaty andKhorgos up to the border of China. The objective of the project is to upgrade thetechnical standards of the road to international standards and reduce transportationcosts.

Funding: Government of Kazakhstan at a cost of approximately US$ 1,320 million.

Completion date: The project is due for completion in 2012.

Kazakhstan Astana-Karaganda Road Rehabilitation

Overview: The 238 kilometre Astana-Karaganda Road is part of the major trunk roadbetween Almaty and Astana and also part of the CAREC Transport corridor. Expandedcapacity and increased efficiency are required to support a rapid increase in traffic onthe road between Astana and Almaty. The project includes construction of a bypasspast Karaganda.

Funding: The project is estimated to cost US$ 1 billion and is to be financed througha concession.

Completion date: The project is due for completion in 2012.

Kyrgyzstan Carec Transport Corridor (ADB Project 42399)

Overview: The Bishkek-Torugartr Road is part of the corridor linking the Kyrgyzstan,Kazakhstan, the Russian Federation and China, where more than 70 per cent ofKyrgyzstan’s trade is regional, with 50 per cent moved by road. The corridor is in poorcondition with rehabilitation to facilitate an increase speed and reliability of passengerand freight flows and create business opportunities. The project includes theimprovement of approximately 75 kilometres of road.

Funding: The project is being financed by way of loan by the Asian DevelopmentBank. The estimated value of the loan is US$ 22 million.

Status: Implementation of highway rehabilitation is on schedule with the progress ofcivil works of about 60 per cent.


58 Payvan Iran News, January 4th 2008, Pilot study for Qeshm Island’s Persian Gulf Bridge started; http://www.payvand.com/news/08/jan/1034.html

Islamic Republic ofIran

In Progress

In Progress

In Progress

In Progress




Mongolia Western Regional Road Corridor Development Project – Phase 1

Overview: As part of Asian Highway 4, the new road will help link Mongolia to therest of Asia. It is being built in the Western Region of Mongolia and will link the Hovdand Bayan-Olgiy areas of Western Mongolia with Xinjiang Autonomous Region in theChina and Siberia Province of the Russian Federation. The Project supports ADB’sstrategy for Mongolia – and for the Central Asian region, to promote sustainableeconomic growth and social development by allowing for more market integration andmovement of people. The Project also supports Mongolia’s priority development planof building roads for the Asian Highway under the national development strategy,which is based on the Millennium Development Goals.

Funding: US$ 37.6 million from ADB.

Status: Package 1 contract was awarded in December 2010. Construction has begun onthe Temeen Huzuu-Baga Ulaan davaa direction and is progressing satisfactorily.59

Completion: 1 October 2013.

Myanmar Monywa-Yagyi-Kalewa road upgrade and rehabilitation60

Overview: The 185 km Monywa-Yagyi-Kalewa road located in Sagaing Region linksKani, Minkin and Kalewa townships. Up to 31 May 2011, 117.8 km is sealed, 26.5 kmis gravel road, 36 km is hard road and 5.6 km is earth road. The purpose of the projectis to pave a section of the road between Kalewa and Yagyi village which cannot beused in the rainy season. Although previously paved by the Government of Myanmar,landslides have since damaged the road.

Funding: The estimated cost of the project US$ 40 million, financed by theGovernment of Myanmar.

Status: Preliminary works have been carried out on the road surface and bridges byMonywa Group Construction Co., Ltd. under a BOT system and in August 2011 theproject was handed back to the Ministry of Works, which plans to work together withThai-based NEDA to complete repair of the road section between Monywa andKalewa.

Pakistan Flood Emergency Reconstruction Project

Overview: In direct response to a request from the Government of Pakistan, in March2011 the ADB approved loan assistance and a supporting technical assistance grant. Aswell as upgrading flood protection to agricultural lands, the emergency loan willreconstruct over 790 km of national highways and 800 km of provincial roads andbridges to safer, higher standards.

Funding: The assistance will include US$ 600 million to be taken from OrdinaryCapital Resources with a 32-year term, an eight-year grace period and interest set inaccordance with ADB’s LIBOR-based lending facility. Another US$ 50 millionequivalent will be tapped from ADB’s concessional Asian Development Fund, whichwill have a repayment term of 40 years, with a 10-year grace period, and interestcharges at 1 per cent per annum.

Completion date: March 2014.

59 http://pid.adb.org/pid/LoanView.htm?projNo=39265&seqNo=02&typeCd=2&projType=GRNT60 MRTV_3 Program, Second regular session of First Amyotha Hluttaw continues for 12th day, 6th September, 2011; Uhttp://www.mrtv3.net.mm/open8/070911iss1.html

In Progress

In Progress

In Progress




Sri Lanka National Highway Sector Project

Overview: The project will upgrade 270 kilometres of national highways consisting ofthe Puttalam-Anuradhapura Highway, hilly roads and south highway links. A landacquisition and resettlement of approximately 80 kilometres is also funded by thisproject.

Funding: The World Bank has provided funding by way of loan to the Sri LankanGovernment for approximately US$ 150 million.

Completion date: The expected completion date was September 30, 2011.

Tajikistan Dushanbe-Kyrgyz Border Road Rehabilitation Project (Phase II)

Overview: The Project will rehabilitate central and border sections of Dushanbe toKyrgyz Border road. Key project outputs are rehabilitating 89 km of two-lanehighway; improving 60 km of rural roads in the project area; procuring roadmaintenance equipment for routine and periodic maintenance and vehicle weighingequipment for axle load control; and institutional strengthening of MOTC’s accountingdepartment and auditing functions through training and procurement of computers;

Funding: The ADB has provided funding by way of loan a total of US$ 29.5 million tothe Government of Tajikistan for the project.

Status: The Phase II Project Implementation Unit is set up in the Ministry of Transportand Communications (MOTC) to supervise the daily implementation progress of theproject.


Thailand World Bank Highways Management Project

Overview: Under the Royal Government of Thailand (RGT)’s four-lane Second PhaseHighway Widening Project (Phase II), five national highway sections are beingwidened from two lanes to four lanes (totalling 216 kilometres). Two sections arelocated in the North-East Region of the country, two in the South, and one in theEastern Seaboard. The widening of these sections aims to accommodate the growingtraffic and improve road safety, with an expected outcome in the reduction of road usercosts (including vehicle operating costs, travel time costs and traffic accident costs) byat least 10 per cent on the improved sections.

The existing loan for the Highways Management Project was approved onDecember 9, 2003, and became effective on March 15, 2004. The implementingagency is the Department of Highways (DOH). There was a one-year extension of theloan closing date from June 30, 2008 to June 30, 2009. This was followed by anextension to September 30, 2009 for the processing of a second order restructuring,and another extension to June 30, 2010 as part of the completed restructuring.

Funding: Two separate World Bank loans with an accumulative value of US$ 158.4million have underpinned this project.

Status: In February 2010, 92.4 per cent of the first loan commitment of US$ 84.29million had been utilized.

Completion date: June 2012.

Sources: ESCAP meeting notes, World Bank and ADB project databases and country websites.

In Progress

In Progress

In Progress

IV. Maritime Ports and Developments in Shipping 51

IV. MARITIME PORTS AND DEVELOPMENTS IN SHIPPING

A. Trends in Maritime Trade

Figure IV-1 shows worldwide growth in maritime and container trade volumes over the period1985 to 2010. In both cases, volumes dropped sharply in 2009 as the impact of the Global Financial Crisismade itself felt in the real economy, but recovered in 2010 to pre-crisis levels. Total international maritimetrade volumes grew at an average of 3.3 per cent per annum over the period 1985 to 2010, with the resultthat by 2010 total seaborne trade more than doubled 1985 volumes. Containerized cargoes have grown at anannual average rate of 8.8 per cent over that same period, resulting in more than an eight-fold increase incontainerized cargo movements. Data compiled by UNCTAD suggests that in 2009, the developingeconomies of Asia accounted for 39 per cent of the total volume of maritime cargo loaded, and 40 per centof the maritime cargo discharged (Figure IV-2).

Figure IV-1. Growth of world maritime trade (1985-2010)

Source: Clarksons in-line database; UNCTAD Review of Maritime Transport 2010; Clarkson’s Container Intelligence monthly.

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The role that manufacturing exports have played in the economic development of Asia – andespecially of Asia east of the Bay of Bengal – and the high level of dependence on maritime transport makecontainer shipping a particular important element of the transport system for Asian. Conversely, Asia hasincreasingly become the heart of the global container shipping system. Figure IV-3 shows that, aftera period of extremely high growth in the early years of containerization, the average rate of growth in thenumber of containers handled in the world’s container ports remained around 10 per cent between 1983 to2008. The growth in container port volumes in the ESCAP region comfortably exceeded world growthlevels throughout this period. When world container volumes suffered an unprecedented slump in 2009,volumes in the ESCAP region fell slightly less than global volumes; and in 2010 the recovery in ESCAPports has been slightly stronger.


Figure IV-2. Developing Asia’s share of global maritime volumes, 200961

Source: Based on data from Containerization International on-line database, http://www.ci-online.co.uk

Source: Based on data presented in UNCTAD Review of Maritime Transport 2010.

Figure IV-3. World and ESCAP Container Port Throughput Growth (1973-2010)

2009-2010

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Along with the rapid growth of the global container trade over the last three decades has comea fundamental structural shift in the balance of container handling activity. Figure IV-4 shows the shift inthe distribution of the global container handling task over the 1973-2010 period. The most striking featureof the graph is the rise in the relative importance of the ESCAP region over this period: the proportion ofESCAP ports in the global total has risen from around 23 per cent in 1973 to 59 per cent in 2010. This risehas been largely at the expense of the ports of the developed economies in Europe and North America; theshare of the ports of these two continents in the global total has fallen from 45 per cent to 17 per cent andfrom 30 per cent to 9 per cent respectively.

61 This volume includes several high income ESCAP economies, including the Republic of Korea; Hong Kong, China; Macao,China; Taiwan Province of China; Singapore; and Brunei Darussalam, but excludes Japan, Australia and New Zealand.


There have also been complex structural changes in the geographical balance of container portactivity within the ESCAP region. In the early 1970’s, the East and North-East Asia and Pacific subregionsaccounted for almost 96 per cent of Asia’s container trade and were essentially confined to Japan and HongKong, China, which were the focal points for both the Europe-Asia and trans-Pacific trades, and Australia.Singapore had just entered the container trade market. By 1993 this had changed dramatically, asdiversification of Asian container trade entered a more mature phase. Singapore was by then the secondlargest container port in the world, with only Hong Kong, China handling greater volumes. Other ports inSouth-East Asia, such as Bangkok, Tanjung Priok and Port Klang, were also handling substantial volumes.As a result, South-East ports by 1993 handled nearly 30 per cent of the ESCAP total. On the other hand, theshare of the ports of the Pacific subregion had declined dramatically to around 6 per cent – a share that wasby then matched by the ports of South and South-West Asia.

During the next decade, the principal change was the emergence of the China market. The numberof containers handled by ports in China (including Hong Kong, China) increased from 2 million TEU in1983 to 55 million TEU in 2003 – a remarkable sustained growth rate of approximately 18 per cent a yearover twenty years. As a result of this spectacular growth, the Chinese container market had overtaken Japanand the United States of America as the world’s largest container market.

Since 2003, the East and North-East Asian share of the total ESCAP volumes increased further to66 per cent (from 62 per cent in 2003), while the North Asian share had declined from over 40 per cent in1978 to just 13 per cent. The once significant share of Pacific subregion had dwindled to around 2 per centby 2010. The South-East Asian share, after rising rapidly to 29 per cent in 1998, has subsequently declinedto around 24 per cent.

Figure IV-4. Distribution of global port container volumes, 1973-2010


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B. Container Port Throughput

The world’s top 20 container ports handled 254 million TEU in 2010, which accounted for 48.4 percent of the world’s container port total. The concentration of container port traffic is even more pronouncedin Asia and Pacific, where the 20 busiest container ports handled 227 million TEU, or 73 per cent of theregion’s total throughput in 2010. The world’s eight busiest container ports are located in the ESCAPregion. These eight ports alone handle 30 per cent of world container throughput, or 60 per cent of theESCAP region’s total.62

The world’s top two container ports in terms of container throughput were Shanghai, China andSingapore, which between them handled approximately 57.5 million TEU in 2010. However, in each casethe mega-port’s dominance of its subregion has faced competition from new ports in recent years, resultingin a struggle to maintain market share.

1. North and North-East Asia

Container throughput for ports in China63 increased from 19.4 million TEU in 2000 to 118.3 millionTEU in 2008, equivalent to an average annual growth of 25.4 per cent for this period. This rapid growthconsolidated the position of China as the world’s most important container shipping market. Chinesecontainer port throughput (excluding Hong Kong, China) is now more than six times as large as that ofJapan.

The most dramatic growth in terms of container throughput units has occurred in the port ofNingbo in China, with a recorded throughput of 13.1 million TEU in 2010. The container throughput of theTaiwan, Province of China increased rapidly during the first half of the 1990s, but has subsequently slowedsignificantly. Total throughput at 12.2 million TEU in 2010, was slightly lower than in 2005.

Figure IV-5. Distribution of container port volumes within ESCAP, 1973-2010


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62 Based on analysis of data from Containerization International on-line database, http://www.ci-online.co.uk, downloaded15 October 2011.63 Excluding container throughput for ports in Hong Kong, China and Taiwan, Province of China.


Table IV-1. Port container throughput in selected ESCAP economies and ports, 1990-2010

Economy/Port 1990 1995 2000 2005 2009 2010

China 1,248,121 4,966,262 22,884,361 67,499,063 106,330,920 127,049,185

Guangzhou 80,744 1,429,900 4,685,000 11,190,000 12,550,000

Ningbo 160,000 902,000 5,208,000 10,502,800 13,144,000

Qingdao 135,419 600,000 2,120,000 6,307,000 10,260,000 12,012,000

Shanghai 456,123 1,527,000 5,613,000 18,084,000 25,002,000 29,069,000

Shenzhen 284,000 3,993,714 16,197,173 18,250,100 22,509,700

Tianjin 320,000 702,051 1,708,423 4,801,000 8,700,000 10,080,000

Hong Kong, China 5,100,637 12,549,746 18,098,000 22,601,630 21,040,096 23,532,000

Taiwan, Province 5,450,912 7,848,695 10,510,762 12,791,429 11,352,097 12,230,414of China

Kaohsiung 3,494,631 5,232,000 7,425,832 9,471,056 8,581,273 9,181,211

Keelung 1,828,143 2,169,893 1,954,573 2,091,458 1,577,824 1,763,900

Japan 7,896,365 10,604,124 13,222,734 17,055,082 16,285,918 18,518,824

Kobe 2,595,940 1,463,515 2,265,991 2,262,066 2,247,024 2,556,291

Nagoya 897,781 1,477,359 1,911,919 2,491,198 2,112,743 2,548,853

Tokyo 1,555,138 2,177,407 2,899,452 3,819,294 3,810,769 4,203,000

Yokohama 1,647,891 2,756,811 2,317,489 2,873,277 2,798,002 3,280,000

Republic of Korea 2,348,475 4,502,596 9,111,099 14,885,942 15,676,118 18,510,479

Busan 2,348,475 4,502,596 7,540,387 11,843,151 11,954,861 14,157,291

Gwangyang 677,747 1,441,261 1,810,438 2,073,196

Incheon 611,261 1,153,465 1,578,003 1,887,000

Russian Federation 83,456 167,098 306,010 1,804,410 1,994,523 2,537,584

Georgia 105,946 181,613 336,272

Bangladesh 107,348 245,417 474,935 808,924 1,182,121 1,352,605

India 666,933 1,360,393 2,460,593 4,945,247 7,888,990 8,811,301

Jawaharlal Nehru 54,643 339,136 1,189,780 2,666,703 4,061,343 4,270,000

Mundra 298,336 862,074 1,148,854

Islamic Republic of Iran 173,769 427,747 1,325,643 2,206,476 2,592,522

Shahid Rajaee 167,167 415,382 1,292,962 2,206,476 2,592,522

Pakistan 390,391 550,650 812,234 1,686,355 2,058,056 2,157,258

Sri Lanka 583,811 1,028,746 1,732,855 2,455,297 3,464,297 4,000,000

Turkey 219,222 738,583 1,594,157 3,207,862 4,521,713 5,650,381

Ambarli 1,185,768 1,836,030 2,540,353

Mersin 107,517 147,617 298,597 596,289 843,917 1,024,171

Brunei Darussalam 71,050 26,337 85,577

Cambodia 22,000 211,141 207,577 224,206

Indonesia 923,663 2,035,344 3,797,948 5,738,407 6,718,396 8,565,381

Tianjung Priok 643,963 1,300,126 2,476,152 3,277,868 3,804,805 4,714,857

Malaysia 901,131 2,100,863 4,642,428 12,197,750 15,859,938 18,319,504

Port Klang 496,526 1,133,811 3,206,753 5,715,855 7,309,779 8,870,000

Tanjung Pelepas 418,218 4,177,121 6,016,452 6,530,000

Philippines 1,408,090 1,891,639 3,031,548 4,134,899 4,305,867 5,120,584

Manila 1,038,905 1,668,031 2,291,704 2,665,015 2,815,004 3,257,372

Singapore 5,223,500 11,845,600 17,096,036 24,104,200 26,592,800 29,178,200

Thailand 1,078,290 1,961,916 3,177,950 5,115,213 5,897,935 6,648,532

Bangkok 1,018,290 1,432,843 1,073,000 1,349,246 1,222,048 1,452,829

Laem Chabang 529,073 2,104,950 3,765,967 4,537,833 5,068,076

Viet Nam 129,500 263,685 626,471 4,936,598 5,719,648

Ho Chi Minh City 3,563,246 3,788,000


Australia 1,599,793 2,279,684 4,828,175 5,299,783 6,196,745 5,289,954

Melbourne 622,983 852,282 2,550,053 1,862,878 2,203,480 2,334,000

Sydney 477,395 695,312 990,654 1,445,318 1,927,507 1,531,000

Fiji 25,423 44,077

French Polynesia 32,451 41,299 62,288 69,025 63,807

Guam 115,860 157,036 132,689 150,960 157,096 183,214

New Caledonia 27,799 40,568 72,106 119,147

New Zealand 414,442 732,464 1,355,767 1,660,339 2,218,308 1,294,657

Auckland 221,103 405,092 454,661 664,787 843,590 453,498

Tauranga 31,140 555,284 423,138 511,343

Papua New Guinea 90,361 114,919 154,982 80,257 262,209

Source: Containerization International ci-online database.

Notes: (a) The year refers to calendar or fiscal year; (b) Identified economies only – includes estimates for identified economies for whichfigures were not available in a particular year.

Table IV-1. (continued)

Economy/Port 1990 1995 2000 2005 2009 2010

Growth of container throughput at Japanese ports has also been more moderate in recent years.From 7.8 million TEU in 1990, container throughput grew at nearly 6 per cent per annum to reach10.6 million TEU in 1995. From 1995-2000, growth slowed to an annual average rate of 4.6 per cent, andhas since slowed further reaching 18.5 million TEU in 2008. Unlike most other ESCAP member countries(with the notable exception of China), where container shipping is concentrated in one or two major ports,the container business in Japan is relatively diverse. Four ports – Kobe, Nagoya, Tokyo and Yokohama – allhad throughputs in the excess of 2 million TEU in 2010, with the highest volume being Tokyo, at to4.2 million TEU.

Container throughput for the Republic of Korea continued to grow strongly from 2000 to 2010,rising from 9.1 million to 18.5 million TEU, an average growth rate of 7.3 per cent per year. Developmentof a large transhipment business at the major container port of Busan has contributed significantly to thisgrowth. In the past few years, the port of Gwangyang has made a substantial contribution to the nationaltotal, with throughput a total throughput of 1.9 million TEU in 2010. Meanwhile, container throughput inRussian ports totalled around 2.5 million TEU in 2010.

2. South-East Asia

In several ASEAN countries, the second half of the 1990s witnessed a major shift in trade balance,with imports declining sharply while exports grew strongly, due to lower exchange rates and governmentefforts. This changed trading pattern has in most cases persisted through the 2000s. Amongst the countrieswith a longer history in the container trades, the highest sustained growth rates in South-East Asia wereachieved by the ports of Malaysia, with an average compound rate of 14.7 per cent per year between 2000and 2010. Container port traffic in Malaysia grew strongly from a base of 4.6 million TEU in 2000 to16.8 million TEU in 2010. Meanwhile, Viet Nam was late in entering the container trades, but volumeshave grown very rapidly over the last decade, reaching nearly 6 million TEU in 2010 – an impressivegrowth of 36 per cent per annum (albeit from a very low base) over the decade.

Indonesia’s container trade volume has more than doubled since 2000, increasing from 3.8 millionTEU in that year to 8.6 million TEU in 2010. More than half of this national total passed through the port ofJakarta, Tanjung Priok. Thailand’s container trade grew only slightly more slowly, with the total volume ofcontainers handled increasing from 3.2 million TEU to 6.6 million TEU in 2010. A salient feature of thedevelopment of Thailand’s container traffic is the rise of Laem Chabang as the country’s premier containerport. With the advantage of high productivity terminals and deep water berths, and backed by a policydecision to cap the throughput of the congested Bangkok port at or near one million TEU, Laem Chabang’stotal throughput grew from 2.1 million TEU in 2000 and 5.1 million TEU in 2010. Laem Chabang nowhandles over three-quarters of Thailand’s total international container trade.


The rate of growth in Singapore was more moderate, with an average annual increase of5.5 per cent over the last decade. Although Singapore handled over 29 million TEU in 2010, it wasovertaken by Shanghai in that year, losing its title as the world’s busiest container port.

3. South and South-West Asia

The Islamic Republic of Iran has registered the fastest growth in port container throughput, at anaverage 20 per cent per year from 2000 to 2010, reaching 2.6 million TEU. In fact, the growth in containerport throughput was almost as rapid as in China over this period. In India, the growth of containerport throughput accelerated from an average of 11 per cent per year in the second half of the 1990s to13.5 per cent per year from 2000 to 2010. Indian container port throughput was estimated at 8.8 millionTEU in 2010. The modern, largely privatized Jawaharlal Nehru port is India’s premier container port, andhandled approximately 48 per cent of India’s container volumes in 2010.

In Bangladesh, container port throughput continues to be strong, as it grew by an average11 per cent per year from 2000 to 2010, reaching 1.4 million TEU in 2010. In Pakistan, container portthroughput grew at just over 10 per cent per year from 2000 to 2010, reaching 2.2 million TEU in 2010. InSri Lanka, container port throughput grew at approximately 9 per cent per year from 2000 to 2010, reaching4.0 million TEU in 2010.

C. Shipping Trends

1. Registered merchant fleet capacities

In 2010, the total capacity of the world maritime fleet stood at 883 million gross tonnes (gt)(Table IV-2). Whereas the fleet capacity increased on average by just 0.1 per cent a year from 1980 to 1990,this growth accelerated to 3.1 per cent from 1990 to 2000, and increased further to 4.4 per cent per yearover the decade 2000-2010. Despite a severe deterioration in shipping market conditions in the latter half of2008 and 2009 bringing new orders virtually grind to a halt, delivery of ships already on order meant thatfleet growth continued, with the global fleet increasing at the beginning of 2010 nearly 7 per cent largerthan at the beginning of 2009.

The capacity of the merchant fleet registered in the ESCAP region as a whole expanded on averageby 0.8 per cent per year during the 1990-2000 period, which was considerably slower than the worldaverage (Table IV-2). The slow growth in the ESCAP region during the second half of the 1990s wasmainly due to the reduction in the tonnage registered under two of the major flags of the region: Japan andthe Russian Federation. Tonnage sailing under the Japanese flag fell from over 40 million tonnes in 1980 to16.2 million tonnes in 2000. In 1990, tonnage under the flag of the Soviet Union was around 22.6 million,whereas Russian-registered vessels totalled 10.0 million tonnes in 2006. Some of this reduction resultedfrom the assignment of some vessels formerly registered in the Soviet Union to the flags of other membersof the former Union, but an overall decline in fleet numbers played the major part.

However, the flagging out of the Japanese fleet and the reduction in Russian tonnage slowed after2000, and Asian trade accelerated as economies recovered from the effects of the 1997 Asian financial crisisand the full effects of long boom in China began to be felt. The Chinese and Korean fleets grew rapidly, asdid the smaller fleets of Indonesia and Malaysia. As the same time, several Pacific Island open registers –most notably the register of the Marshall Islands, but also the registers of Vanuatu and Tuvalu – grewquickly. The tonnage of vessels registered under the flags of Pacific Island economies increased more thanfive-fold from 10 million tonnes in 2000 to over 52.0 million tonnes by 2010. As a result, the capacity ofthe merchant fleet registered in the ESCAP region expanded on average 6.9 per cent per year from 2000 to2010, which was well in excess of the world average of 4.4 per cent over the same period.

There are significant differences between the share of global tonnage that is domiciled in a countryand the share that is registered in that country. UNCTAD defines domiciled vessels as follows: “the countryof domicile indicates where the controlling interest (for example, the parent company) of the fleet is


Table IV-2. Capacity of merchant fleets registered in the ESCAP region, 1980-2010

Capacity (’000 GT) Average Annual Growth

1980 1990 2000 2010 1980-1990 1990-2000 2000-2010

China 6,874 13,899 16,266 30,077 7.3% 1.6% 6.3%Democratic People’s 0 0 655 871 2.9%Republic of KoreaHong Kong, China 1,717 6,565 8,587 45,338 14.4% 2.7% 18.1%Japan 40,960 27,078 16,193 14,725 -4.1% -5.0% -0.9%Republic of Korea 4,344 7,783 5,655 12,893 6.0% -3.1% 8.6%Taiwan, Province of China 2,636

East and North-East Asia 53,895 55,325 47,356 106,540 0.3% -1.5% 8.4%

Azerbaijan 743Georgia 0 0 280 798 11.1%Kazakhstan 77Russian Federation 23,444 22,629 9,967 7,650 -0.4% -7.9% -2.6%Turkmenistan 63

North and Central Asia 23,444 22,629 10,247 9,331 -0.4% -7.6% -0.9%

Australia 1,643 2,512 1,944 1,847 4.3% -2.5% -0.5%Fiji 15 56 29 35 14.1% -6.5% 2.1%French Polynesia 1Kiribati 1 4 4 547 14.9% -0.7% 64.7%Marshall Islands 0 0 8,439 49,088 19.3%Micronesia (Federated State of) 0 0 10 12 1.6%New Caledonia 2New Zealand 264 260 241 363 -0.2% -0.7% 4.2%Papua New Guinea 25 37 79 98 4.0% 7.9% 2.2%Samoa 5 27 2 10 18.4% -22.3% 16.6%Solomon Islands 3 8 9 13 10.3% 1.3% 3.7%Tonga 15 40 44 68 10.3% 0.9% 4.5%Tuvalu 0 1 53 1,098 48.9% 35.3%Vanuatu 0 2,164 1,328 2,145 -4.8% 4.9%

Pacific 1,971 5,109 12,182 55,327 10.0% 9.1% 16.3%

Bangladesh 354 464 380 645 2.7% -2.0% 5.4%India 5,911 6,476 6,839 9,027 0.9% 0.5% 2.8%Islamic Republic of Iran 1,284 4,738 3,730 988 13.9% -2.4% -12.4%Maldives 136 78 86 141 -5.4% 1.0% 5.0%Pakistan 478 354 285 295 -3.0% -2.2% 0.4%Sri Lanka 94 350 183 168 14.0% -6.3% -0.8%Turkey 1,455 4,029 6,262 5,451 10.7% 4.5% -1.4%

South and South-West Asia 9,712 16,489 17,764 16,715 5.4% 0.7% -0.6%

Brunei Darussalam 1 358 361 500 80.0% 0.1% 3.3%Cambodia 0 0 1,792 1,964 0.9%Indonesia 1,412 2,179 3,387 8,093 4.4% 4.5% 9.1%Malaysia 702 1,718 5,665 7,718 9.4% 12.7% 3.1%Myanmar 88 827 512 183 25.1% -4.7% -9.8%Philippines 1,928 8,515 7,191 5,219 16.0% -1.7% -3.2%Singapore 7,664 7,928 23,414 41,047 0.3% 11.4% 5.8%Thailand 392 615 1,962 2,526 4.6% 12.3% 2.6%Timor-Leste 1Viet Nam 241 470 929 3,451 6.9% 7.1% 14.0%

South-East Asia 12,428 22,610 45,212 70,702 6.2% 7.2% 4.6%

Total ESCAP region 101,450 122,162 132,762 258,615 1.9% 0.8% 6.9%World total 419,911 423,627 573,121 882,635 0.1% 3.1% 4.4%

Source: UNCTAD Review of Maritime Transport, UNCTAD, New York and Geneva, various issues; Clarkson’s Shipping IntelligenceNetwork, http://www.clarksons.net, accessed 31 December 2009.

Notes: Data refers to merchant ships of 100 tonnes gross and above, excluding wooden and non-propelled craft. 1980 and 1990 data shown forthe Russian Federation are for the former Soviet Union.

Subregion, country oreconomy


located”.64 Ship owners in many countries – especially, but not exclusively, countries with relatively highincomes – have increasingly chosen to register their vessels in other countries in which registration ofvessels by non-residents is permitted.

2. Trends in container slot capacity and ship size

Globally, the size of mainline container ships has increased steadily over the past threedecades. From 3,000 TEU in 1975, the size of the largest vessel in operation rose to 4,000 TEU in 1991, to6,800 TEU in early 2000. The largest containerships currently in operation is given by ContainerizationInternational at 15,550 TEU (Figure IV-6). In February 2011, Maersk Line announced an order for 10 new‘Triple-E’ megaships, with an estimated capacity of 18,000 TEU – 16 per cent larger than the largest shipsnow in service. These vessels will be 400 metres long, 59 metres wide and 73 metres tall, and will costUS$ 190 million each.

Figure IV-6. Increase in containership size (1980-2010)

Source: Historical series compiled from Containerization International, various years.

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These developments are especially significant for the countries of the ESCAP region, as almost allvessels in the world fleet in excess of 6,000 TEU, and all of the vessels in excess of 8,000 TEU, currentlyoperate on two routes: the Trans-Pacific route between Asia and North America and the Asia-Europe route.The other trade in which very large vessels are now being employed is the trade between Asia and SouthAmerica, where vessels of up to 7,500 TEU are now being used.

As the size of mainline vessels has been increasing, so has the size of feeder vessels and vesselsdeployed in regional and services. Feeder vessels of up to 2,000 TEU are now common, whereas in themid-1990s vessels 1,200 to 1,300 TEU marked the top end of the feeder range. Similar trends are evidenton some of the major intra-regional trade routes: between Australia and South-East Asia, for example, thesize of the largest vessel deployed rose from 1,250 TEU in 1992 and 2,900 TEU in 1997 to 4,700 TEU by2010.65 Similarly, vessels of up to 5,000 TEU are operating between South-East Asia and China.66

64 UNCTAD Review of Maritime Transport 2007. UNCTAD further notes that in practice it is difficult to clearly separate the“domiciled” and “registered” categories due to insufficient transparency.65 Containerization International Yearbook, various issues, and Containerization International online database, http://www.ci-online.co.uk, accessed 28 September 2011.66 Containerization International, Well Stacked, May 2011.


The containership order book is now dominated by large vessels: container ships of over 7,000TEU accounting for 69 per cent of the capacity currently on order. Planned investment seems to beparticularly strong for ships with a capacity of 12,000 TEU and above: the 128 vessels in this size class thatare currently on order comprise over 42 per cent of the total order book capacity. Figure IV-7 shows theevolution of the global container fleet from 1988 through to 2011. By the beginning of 2011, a total of4,883 cellular container ships in service offered a total capacity of 14.1 million slots: this is up from2,623 ships offering a total of 4.4 million TEU slots a decade earlier in 2000, and up from 1,239 vesselsoffering a total of 1.7 million TEU slots almost two decades earlier in 1990. The increase in the average sizeof container ships, measured in terms of slot capacity, is from 1,378 TEU in 1988 to 2,892 TEU in 2011.

Figure IV-7. Developments in the numbers of container vessel numbers andtheir average size, 1988-2010

Notes: Shipbuilding Markets 2007 (1999 to 1995); Clarksons Shipping Intelligence Network www.clarksons.net (1996-2008); ContainerizationInternational (2009-2011).

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3. Consolidation in world container shipping

Between 1 January 2000 and late 2011, the share of global container shipping capacity controlledby the top ten container lines increased substantially, from 49 per cent to 65 per cent. But perhaps morestriking is the change in the share of fleet capacity of the top five lines. In 2000, the share of the top fivelines stood at 32.8 per cent. By late 2011, this had risen to 47.4 per cent.67 In other words, all of theincrease in the share of the top ten lines over the decade was accounted for by the gains made by the topfive lines; in aggregate, the share of the global total held by the next five largest lines (that is, the linesranked six to ten) did not change. The majority of the increase in concentration can be accounted for by thegrowth of the very largest lines: in particular Maersk, MSC, and CMA-CGM, which between them nowaccount for almost 40 per cent of global capacity. The increased prominence of CMA-CGM is particularlystriking: the line increased its capacity from 123,000 TEU in 2000 to 1,350,000 TEU by late 2011,improving its global ranking from twelfth to third. As can be seen from Figure IV-8, the share of totalcellular fleet capacity controlled by the top twenty global lines as at 28 September 2011 was approximately88 per cent of global capacity.

67 Data on market shares as at 1 January 2000 is taken from AXS-Alphaliner Liner Shipping Report January 2007; data onmarket shares as at 28 September 2011 is taken from AXS-Alphaliner Top 100 Report, accessed on the Alphaliner’s website:http://www.alphaliner.com, 28 September 2011.


Although all of the three largest lines are European, economies of the ESCAP region are wellrepresented in the mix of major container lines. Twelve of the world’s top twenty container shippingoperators are based in the ESCAP region, and they control 35 per cent of the world’s container shippingcapacity. The growing importance of intra-Asian trade is illustrated by the inclusion of regional specialistsPacific International Line in this group, which is otherwise dominated by global carriers. From 2000 to2010, the container shipping fleet registered in the ESCAP region has also grown 12.4 per cent per year,which is in excess of the world average of 9.2 per cent per year. A significant part of this growth is the rapidincrease in registrations on the open registry of the Marshall Islands, but major contributions also comefrom Singapore, followed by Hong Kong, China and China.

4. Productivity trends in the world merchant shipping fleet

Figure IV-9 illustrates the productivity trends of the world merchant fleet between 1980 and 2009.The operational productivity of the world fleet, measured in tonnes of cargo per deadweight tonne ofcapacity, peaked in or around 2006, at which time productivity of the dry bulk fleet was nearly 25 per centhigher than in 1980; productivity of the tanker fleer 38 per cent above 1980 levels; and productivity of thecontainer fleet an impressive 65 per cent greater than in 1980. Since 2006, the productivity of all sectors hasdeclined: 6 per cent in the dry bulk sector; 17 per cent in the liquid bulk sector; and 28 per cent in thecontainer and general cargo sector.

The primary driver of both the productivity improvement to 2006 and the subsequently slideappears to be the supply-demand balance in the shipping industry. There was a strong surge in worldseaborne trade in the early 2000s, when the demand for shipping far outstripped the expansion in capacity.The subsequent reduction in productivity reflects a large influx of new vessels in 2005, which has continuedright through to the present, combined with the sharp slowdown in world trade that began in 2008. Shipowners have responded by accelerating scrapping, laying vessels up or operating them at reduced speeds.The second and third responses have the effect of driving down productivity (when this is measured bycargo carried per tonne of ship capacity).

Figure IV-8. Share of top twenty shipping lines (as of 28 September 2011)

Source: Based on data from AXS-Alphaliner Top 100 Report downloaded from Alphaliner website http://www.alphaliner.com, 28 September2011.


D. Selected Investment Projects in Maritime Ports

The sharp downturn in international maritime trade that followed the global financial crisis led toas deferral of many port projects throughout the world. Commenting specifically on plans for containerterminal development, Drewry Shipping Consultants note that:

“The downturn has led to a widespread retrenchment in terms of terminal expansion andinvestment. Many projects have been slowed down, or put on hold, while others have beencancelled. While projecting capacity plans is extremely difficult at present, it is clear that a muchsmaller number of investment initiatives are now being taken forward by global operators as manycompanies review their strategic direction in view of the changed economic circumstances”.68

More broadly, UNCTAD also comments that “Many port development projects under way in 2009experienced a slowdown in activity, due to uncertainty about the effects of the global economic crisis anda fear of creating ports without customers, or so-called ‘white elephants’.”69

While the ESCAP region was not immune from this trend, the dynamism of the leading developingeconomies of the region meant that it enjoyed some protection from it. In particular, port developmentcontinued at a comparatively rapid pace in China and India, and in the resource-exporting countries, such asAustralia and Indonesia. Table IV-3 below lists selected port infrastructure in the ESCAP region that areeither in the planning stage, in progress or recently completed. The list is not comprehensive; it is intendedsimply to provide a broad indication of the physical scale of the included projects. The information iscompiled from Thomson project finance international and other information gathered by the secretariat.

Figure IV-9. Productivity of the world merchant fleet, 1980-2009

Source: Based on data in UNCTAD, Review of Maritime Transport 2010.

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68 Drewry Shipping Consultants, Global Container Terminal Operators: Annual Review and Forecast 2010.69 UNCTAD Review of Maritime Transport 2010, UNCTAD Geneva December 2010.


Table IV-3. Selected port infrastructure projects in the ESCAP region (as of end 2011)

Country Selected port infrastructure projects Status

Australia Port Botany Expansion Project

The Botany expansion is one of the largest port redevelopments undertaken inAustralia. The expansion entails:

1,850 metres of additional wharf face for five extra shipping berths

60 hectares of reclaimed terminal land

deep water berths with depths of up to 16.5 metres

dredging of approximately 7.8 million cubic metres of fill material to createshipping channels and berth boxes

dedicated road access to the new terminal area

additional rail sidings to provide rail access to the new terminal area

additional tug berths and facilities

rehabilitation and expansion of Penrhyn Estuary to create a secure estuarineenvironment

community facilities including boat ramp, look outs, pathways

Construction is now well advanced and the first berths are expected to be available in2012.70

Australia Wiggins Island Coal Export Terminal

The Wiggins Island Coal Export Terminal (WICET) is major coal export terminalintended to serve future exports from the Surat and Bowen basins. These coal fields aresituated to the west and south-west of Gladstone in Queensland. The ultimate capacityof the development is 80 million tonnes per annum. Stage 1, expected to costUS$AUS 2 billion and provide an export capacity of around 27 million tonnes, isexpected to come online in 2014.

Australia Port of Gladstone Western Basin Development

The Western Basin at the port of Gladstone has been identified by the Queenslandgovernment as the site at which port facilities for the State’s emerging LiquefiedNatural Gas (LNG) industry will be located. The Basin development involves largescale dredging and disposal works estimated to cost a total of US$AUD 1.3 billion(US$ 1.2 billion). Joint venture partners Van Oord and Dredging InternationalAustralia were awarded the first stage of the dredging project, worth an estimatedUS$AUD 387 million, in March 2011.

China Yangshan Port Construction

Due to the difficulty of maintaining water depth of port in Huangpu River, theMother River of Shanghai, and rapid growth of container volume, the construction ofa mega-deepwater port became a must for Shanghai. Phase I-III have been completed,while the fourth phase is expected to be finished in 2015. This will add 4 million TEUscapacity to the port’s current designed capacity of 9.3 million TEUs. Yangshan’s targetis to have a throughput volume of 15 million TEUs by 2020. By this time, there will becapacity for 50 container berths and a channel depth of 16 m. The port will also havean annual handling capacity of 25 million TEU.71

China Chongqing Container Terminal

Chongqing East Port Container Terminal opened in April 2011 with a forecast annualthroughput of 200,000-250,000 TEU. It is among three container terminals on theYangtze River that the municipality wants to develop. Once all phases are completed,the currently building phase three of its terminal, which will see overall annualcapacity jump to 1.6 million TEU in 2013.

UnderConstruction

Committed

In Progress

UnderConstruction

Planned

70 Sydney Ports Corporation website, www.sydneyports.com.au accessed 14 September 2011.71 Yangshan adds depth to planned Shanghai hub, China Daily 4 March 2011.




India Expansion plan for Chennai

Chennai Port Trust is progressing plans of constructing a mega 4 million TEUcontainer terminal on BOT basis. The terminal is likely to cost Rs. 36,860 million outof which the private developer is expected to invest Rs. 31,250 million while ChPTwill spend Rs. 5,700 million on supporting infrastructure like channel deepening up to18 m., providing tugs, floating crafts etc.. The port trust plans to commission theterminal in phases beginning from the 12th Plan period (2012-2017).

Tenders for the project were issued in January 2008. However, concerns about a rangeof environmental issues, the quality of road access and over-capacity in the greaterChennai region have dampened enthusiasm for the project, and none of the sevenshort-listed bidders lodged financial proposals by the closing date of January 2011.72

However, the Government has re-affirmed its commitment to the development ofChennai as a hub port.

India Kattupali Container Terminal

The Kattupalli Container Terminal (KCT) (25 km north of Chennai) will be operatedand managed by Manila-based International Container Terminal Services Inc. and willbe ready for operations by early 2012. The project has been funded by a joint venturebetween Indian construction firm Larsen & Toubro and Tamil Nadu IndustrialDevelopment Corporation. This facility will initially have two berths on a 700 m quaywall dredged to a depth to 14 m at a cost of US$ 400 million. In the first phase, it isexpected to have capacity to handle over one million TEU a year.73

India Gopalpur Port Project

The master plan envisages 15-20 berths with three separate harbours to enablesegregation of cargo as needed. The later stages of development would see a 3,500 m.breakwater for protection of all the harbours. The port will also be able to reclaim landsouth of the breakwater and use it for bulk storage.74

The first phase of development of Gopalpur Port involved the development of two drybulk cargo berths and a break bulk cargo berth. Although the port has been operationalsince 2007, it has operated only as a seasonal port. Approval to deepen the approachesand expand the port to allow year-round operations was obtained in March 2011.

The company has planned to invest Rs. 12.5 million (US$ 265 million). The port willhave an installed capacity of handling at least 12 millions tonnes cargo by 2013 andaims to increase the capacity to handle 54-60 million tonnes per annum by 2022.

Indonesia Karawang Port Project

State owned port operator PT Pelabuhan Indonesia (Pelindo) II has announced plansfor a new port and container terminal to be built in Karawang, West Java. The projectis due to be completed by 2020, and would ease pressure on Tanjung Priok, thecountry’s largest port. The Karawang port proposal supersedes earlier plans to builda new container terminal at Bojonegoro.

Expansion of Shahid Rejaiee Port

In October 2009, the Government of the Islamic Republic of Iran delegated the thirdstage of the development of the container terminal at Shahid Rajaiee Port to IslamicRepublic of Iran Shipping Line (IRISL).

The first two phases of the project have provided an estimated capacity of 5.7 millionTEU at the port. The third phase will involve the construction of 1,450 meters of berthwith a draught of 16 metres for the reception of Post Panamax vessels, dredging of

Planned

UnderConstruction

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Planned

72 “No takers for mega container terminal at Chennai port”, Hindu Times, 29 January 2011.73 “Wheels in motion”, Containerization International, August 2011.74 Gopalpur port website, http://gopalpurports.com l, accessed 18 December 2009.

Islamic Republic ofIran

In Progress




2.5 million cubic metres and preparation of over 83 hectares of storage area, Whencompleted, the third phase would increase the container capacity of the Shahid RajaeePort Complex further to 7.6 million TEUs.

IRISL has committed US$ 500 million to the project.75

Malaysia Penang Channel Deepening76

Penang Port Sdn Bhd is currently deepening its main shipping channel toaccommodate mainline container ships. The RM (MYR) 322 million project wasincluded in the Ninth Malaysian Plan review, and will increase the depth of the NorthChannel to 14.5 metres. The project has suffered significant delays in securing financeand environmental approvals. However, clearance to proceed was received in June2011 and the project is now expected to be completed by end 2012.

Pakistan FAP terminal, Qasim

Fauji Akbar Portia Marine Terminals (Pvt.) Ltd. was awarded a concession to constructa grain and fertilizer terminal on a greenfields site in the port of Qasim. The terminalwas officially opened in October 2010. At present, draft at the terminal is limited to11.5 metres, but the Port of Qasim Authority has made a commitment to deepen theport to 14 metres, allowing Panamax vessels to be accommodated.77

Singapore Expansion of Pasir Panjang Terminal

Expansion of the port of Singapore is currently centred on the further development ofthe Pasir Panjang container terminal. The terminal is currently undergoing a US$ 714million (US$ 580 million) expansion. The expansion will add 16 berths with anadditional capacity of 14 million twenty-foot equivalent units (TEUs). It will increasethe total capacity of the port to around 50 million TEUs. The expansion is scheduled tobe complete by 2013.78

Sri Lanka Colombo Port Expansion Project

The Project will expand the container-handling capacity of Colombo Port by7.2 million TEU in three increments of 2.4 million TEU each. The major projectelements are dredging an approach channel and inner harbour basin west of theexisting harbour, and constructing a breakwater to the west of the existing harboursufficient to accommodate three new terminals, which will be constructed sequentially.In addition the Project includes the establishment of a new marine operations centre,relocation of an existing submarine oil pipeline near the entrance to the new terminal,provision of navigational aids, and construction of shore utilities including an electricalpower plant, water mains and storage tanks and a sewage treatment plant.79

The common user port works are being funded jointly by the Asian Development Bankand the Sri Lanka Ports Authority, and it is expected that the terminals will bedeveloped by private operators under a PPP arrangement. However, early attempts toattract private sector interest, undertaken at the height of the Global Financial Crisis,were not successful.

In Progress

Completed

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75 “IRISL invests US$ 500 M in Shahid Rajaee port development project”, PMO News (supplement to Ports & Maritimemagazine), Sept-Oct 2009, downloaded from website of Ports and Maritime Organization of Iran, http://www.pmo.ir,16 September 2011.76 “Dredging works back on track”, The Sun Daily, 27 June 2011. Viewed on The Sun Daily website http://www.thesundaily.com.my, 17 September 2011.77 “Pakistan’s first grain, fertilizer terminal to start operations soon”, Daily Post, 24 October 2010, viewed at http://www.highbeam.com, 17 September 2011.78 Port of Singapore, Singapore, viewed at the Ship-Technology website, http://www.ship-technology.com, 17 September 2011.79 Asian Development Bank (ADB) 2007, Proposed Loan: Democratic Socialist Republic of Sri Lanka: Colombo PortExpansion Project, Report and Recommendation to President and Board of Directors.

Islamic Republic ofIran (continued)




The dredging and breakwater works were substantially completed prior to thebeginning of the 2011 monsoon season.80 A BOT agreement has been signed withChina Merchants Holdings (International) Company to develop a 1,200 metresterminal with a land area of 58 hectares and water depth of 18 metres. The project isexpected to take two phases, with Phase I to be ready for operation by early 2013, andthe entire facility completed by 2016.

Turkey Yarimca Container Terminal

The Yarimca Container Terminal is being developed by DP World as a greenfield 1.3 mTEU capacity container terminal near Istanbul. The terminal will have 895 m of berthon a 45 ha site. The project is being developed in a single phase. DP World hasappointed Haskoning for design consultancy services, and contracts for the civil workshave been awarded to local Turkish companies. The port is expected to open in 2012.81

Viet Nam Van Phong Port

The Vietnam National Shipping Lines (Vinalines) commenced the construction ofthe Van Phong international transhipment port in the central province of Khanh Hoain October 2008. As part of a general plan for Vietnam’s seaport system by 2020,Van Phong port will constitute the only international transhipment port in the country.Construction of the port will require an investment of more than US$ 3.6 billion. Theproject has struck technical and financing difficulties, and work on the project wassuspended in May 2011. However, major investor Vinalines remains committed to theproject.82

Viet Nam Lach Huyen Container Terminal

Japanese companies MOL, NYK and Itochu, in a joint venture with Vietnameseshipping line Vinalines – which is meant to take a 51 per cent stake – to develop thecontainer terminal in Lach Huyen near Haiphong. The first phase of the terminal willcost approximately US$ 350 million and will be finished by 2015 and will have anannual capacity of 850,000 TEU, which is almost half of north Viet Nam’s currentcontainer volumes. Lach Huyen will have a 14 m draft and be able to handle ships ofup to 8,000 TEU. Currently, draft restrictions in North Viet Nam mean that portscannot handle vessel of over 1,200 TEU.83

Papua New Guinea Lae Port Development

The Project is expected to catalyze industrial and commercial development andpromote trade for PNG by relieving a binding constraint of key port infrastructure inLae. The core of the Project will be the construction of a tidal basin located at thenorth-west of the existing port facilities; construction of a 240 m long wharf capable ofaccommodating post-Panamax container vessels; and terminal works including allbuildings, storage, area, roads, drainage, water, electrics, and sewerage services.

A loan agreement for funding of the project was signed with the Asian DevelopmentBank in June 2008.84 Tenders were called for the construction of the Tidal Basin, thewharf and related facilities in early 2011.

UnderConstruction

Suspended

Planned

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Sri Lanka(continued)

80 “Sri Lanka: Colombo Port Expansion Project Makes Progress”, Dredging Today, 28 March 2011, viewed on http://www.dredgingtoday.com, 17 September 2011.81 UK Trade and Investment, Sector Briefing: Port Opportunities in Turkey, 2010, dowmloaded from Ministry websitewww.ukti.gov.uk, 17 September 2011.82 “Van Phong Port Construction Halted”, Dredging Today, 25 May 2011, viewed on http://www.dredgingtoday.com,17 September 2011.83 “NYK and MOL to ‘invest’ in new Viet Nam port”, Containerization International, August 2010.84 Loan agreement between the Independent State of Papua New Guinea and the Asian Development Bank, 12 June 2008,viewed on www.adb.org, 20 December 2009.

V. Dry ports, Intermodal Terminals and Logistics Development 67

V. DRY PORTS, INTERMODAL TERMINALS AND LOGISTICSDEVELOPMENT

A. Development of Dry Ports and Intermodal Terminalsin the ESCAP Region

For many decades, national transport plans and programmes have tried to address transport demandby building roads, railway lines and maritime ports that function within individual mode-based frameworks.However, unimodal approaches sometimes result in lower levels of technical and economic efficiency thanmore holistic approaches to transport planning. Today, national and global economic and trade developmentpolicies must consider not only the way in which productive sectors operate but also how their outputs aredistributed rapidly and efficiently to international markets.

Given the significant growth expected in trade to, from and within the ESCAP region, it isimperative not only that all transport links (including railway, road and waterway) be developed but that theinterfaces between these links – including both seaports and dry ports – be well-located, appropriatelyequipped and efficiently operated. At present, countries in Asia are at different stages in developing theirdry ports. Some countries such as China, India, Malaysia, Republic of Korea, Russian Federation andThailand have established well functioning dry ports while other countries are still in the early stages ofdevelopment. However, even in those countries where dry port development is relatively advanced,significant further development is likely.

Further efforts could be expended to identify intermodal corridors along the Asian Highway andTrans-Asian Railway networks offering high intermodal potential. The implementation of these effortspresent a particular challenge born from the fact that in most countries the responsibilities for thedevelopment and implementation of intermodal policies and projects are distributed over many ministries oragencies dealing each with one specific aspect. A consequence is that related transport policy and resourceallocations are modally oriented with narrowly focused programmes and projects lacking a coherent whole.Intermodal transport therefore requires a high degree of coordination and cooperation across allstakeholders, including government agencies and institutions, the private sector of shippers and modalcarriers and the public and various interest groups.

Recognizing the key role of dry ports in facilitating a coordinated approach to an internationalintegrated intermodal transport and logistics system, the Forum of Asian Ministers of Transport, at its firstsession, held in Bangkok in December 2009, requested the secretariat to work towards developing anintergovernmental agreement on dry ports. Formalizing the development of dry ports through anintergovernmental agreement would: (a) promote international recognition of dry ports, (b) facilitateinfrastructure investment by attracting strong commitment of member States and increased financing frominternational banks and bilateral donors, and (c) define operational services for a more harmonizedapproach to the development and operation of dry ports in the region through enhanced collaboration withthe private sector. The ESCAP secretariat is currently developing such an agreement in close consultationwith member states.

Some recent dry port and intermodal facility development initiatives in the ESCAP region aredescribed below.

Australia

Over the last decade Australia has witnessed a significant growth in interest in intermodal facilitiesin both the domestic and international transport supply chains. Several States have unveiled plans for thedevelopment of major new intermodal terminals. For example, in 2006, the Government of the state of NewSouth Wales endorsed a plan for a new network of intermodal terminals to support the movement ofcontainers by rail with the aim of increasing the proportion of import and export containers moving in andout of the Port Botany by rail from 20 per cent to 40 per cent. In 2007, the Government approved SydneyPorts Corporation’s proposal to develop the disused rail marshalling yard at Enfield as an Intermodal


Logistics Centre (ILC). The Enfield site is connected to the port by dual track rail, and the site also hasdirect access to Sydney’s key road freight corridors. Site works commenced in 2010, and the Early Workspackage, including work associated with the a new vehicular bridge over RailCorp’s New EnfieldMarshalling Yards to connect the ILC Site with Wentworth Street, is due for completion during 2011.85 InAugust 2011, the Government announced today that Hutchison Port Holdings (HPH) has been appointedoperator of the terminal.86

Meanwhile, the Moorebank Project Office (MPO) was established within the Department ofFinance and Deregulation to conduct a feasibility study into a proposed IMT at Moorebank. The study isconsidering technical, economic, environmental and community factors. Subject to environmentalassessment and Government approval of the proposed Moorebank IMT the staged development of thefacility is expected to commence in 2013.87

Azerbaijan

Azerbaijan has identified the renewal and reconstruction of ports infrastructure (including dryports) as a priority in its transport policy, and has endorsed the development of dry ports along its maininternational transport corridors as one of the key issues in the creation of international transportinfrastructures. The main dry ports of Azerbaijan that involve rail connections are the dry port at Yalama onthe border with the Russian Federation and the dry port at Boyuk-Kasik on the border with Georgia.There are also cargo interchange points on border crossings along the Asian Highway network. The MainCargo Terminal of Baku Sea Trade Port (Dry Cargo terminal) situated within the boundaries of Baku cityalso plays an important role. The Terminal, which has a throughput of 2 million tonnes/year, is servedby 8 kilometres of rail siding of railways of the terminal is 8 km and has 24,000 m2 of open storage and10,000 m2 of closed warehouse.88

Cambodia

There are many privately owned dry ports in Cambodia, mainly concentrated in and around PhnomPenh. The most important existing dry ports are:

So Nguon ICD at Bavet, which operates on seven hectares of land and provides customsclearance facilities as well as warehousing and container freight station services

So Nguon ICD at Phnom Penh, which operates on ten hectares of land and provides a similarrange of services89

MSE-KPM ICD at Sangkat Cham Chao, Khan Dangkor, Phnom Penh. The terminal enjoysgood access to Sihanoukville Port, Phnom Penh Port and Phnom Penh International Airport. Itcovers an area of almost 10 hectares currently and provides some 10,000 square metres ofwarehousing space and 27,000 square metres of storage and container yard.90

Tec Srun ICD at Chom Chao on national road 4

Olair Dry Port at Chom Chao

Teng Lay Dry Port at Chom Chao, which occupies an area of 40,000 square metres91

Bok Seng ICD in Phnom Penh

85 “ILC at Enfield project update”, website of Sydney Ports Corporation, www.sydneyports.com.au, accessed 19 September2011.86 Hutchison Port Holdings to Operate Enfield Intermodal Logistics Centre, website of Sydney Ports Corporation,www.sydneyports.com.au, accessed 19 September 2011.87 Moorebank Intermodal Terminal Project – Community Update August 2011, Department of Finance website, http://www.finance.gov.au/, accessed 19 September 2011.88 Azerbaijan Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports alongthe Asian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.89 Songuon Group website, http://www.songuongroup.com accessed 19 September 2011.90 SKL Group website, http://www.sklgroup.com, accessed 19 September 2011.91 Teng Lay Transport Group website, http://tenglaytransport.com, accessed 19 September 2011.


CWT Dry Port in Phnom Penh operated by the Port Authority of Sihanoukville.

New dry ports are planned for Bavit, Trapeanplong and Poi Pet.92

China

The ‘Go West’ policy of moving the locus of economic development to the inland provinces ofChina has sparked a renewed interest in intermodalism and Dry Port development in China. One majorinitiative to cater for this expansion has been a programme launched by Railway Container Transport Corp.Ltd. (a subsidiary of the Ministry of Railways) in 2003. The project will see the construction of 18 newinland hub container handling facilities throughout China through joint venture private partners at a cost ofUS$ 1.6 billion. These terminals will form the basis of a transport network composed of approximately16,000 kilometres of railway by 2020. The terminals, which are planned for completion by 2015, are shownin Figure V-1.

Figure V-1. Existing and planned major intermodal terminals in China

Source: Ministry of Railways, Government of China.

Medium and Long-Term Railway Planning

Rail container terminal under operation

Rail container terminal under construction

Existing railway

Planned railways to be constructed

New railway proposals

Legend

92 Cambodia Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports alongthe Asian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.


India

India currently has 252 dry ports, operated by private companies, state governments and theirvarious agencies and by the Container Corporation of India (CONCOR).93 Although the Indian railwaynetwork was opened to 13 new entrants in 2005, CONCOR remains the dominant operator of rail-basedintermodal facilities. Established by the Ministry of Railways to promote containerized transport in India, atits incorporation, CONCOR inherited the then network of seven ICDs from the Indian Railways and wascharged with their operation. It currently operates a total of 61 dry ports.94

Figure V-2. Container throughput at ICDs operated by CONCOR 1995-2009

Source: Website of Container Corporation of India Ltd., 18 September 2011, www.concorindia.com/corebusiness.asp

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

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U

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1996-1

997

1997-1

998

1998-1

999

1999-2

000

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001

2001-2

002

2002-2

003

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004

2004-2

005

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006

2006-2

007

2007-2

008

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009

2009-2

010

2010-2

011

Figure V-2 shows that the number of containers (TEU) handled by CONCOR has increasedfourfold since 1996-1997. A downturn in volumes due to the impact of the global financial crisis wasexperienced in international intermodal container handling in 2008-2009 with an overall drop in intermodalcontainer volumes from the 2007-2008 level of 2.45 million TEUs to 2.3 million TEUs, but volumes havesince recovered to exceed the previous peak.

Indonesia

In Indonesia, providing high quality transport links to the interior is regarded as essential to theeconomic development of these inland areas, and a number of signification dry ports have been established.Four of these – at Cikarang, Surabaya, Cirebon and Cilegon – are in fact located very close to majorseaports. However, the other four serve areas that do not have direct maritime access. Cikarang, Gedebage,Cibungur and Solo are rail-based terminals; all of the others are served only by road. Figure V-3 shows thevolume of containers handled at each of the major dry ports in 2008. An additional dry port – the Rambipujidry port in East Java – has temporarily ceased operations because of a shortage of traffic.95

93 India Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along theAsian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.94 Container Corporation of India Website, http://www.concorindia.com, accessed 18 September 2011.95 Indonesia Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along theAsian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.


Islamic Republic of Iran

The Government of the Islamic Republic of Iran has adopted a number of policies in support of thedevelopment of intermodal transport and dry ports, and the first major dry port in Aprin is now in operation.The Aprin Terminal is located 21 kilometres south western of Tehran at the intersection of East-West andNorth-South railways; it is also accessible to a number of highways. It has a total area of 100 hectares.Current throughput at the terminal is 5,000 TEU. Two other major dry ports are planned to serve designatedspecial economic zones: a 36 hectare facility in the Salafchegan Special Economic Zone and a 40 hectarefacility in the Sirjan Special Economic Zone.96

Republic of Korea

The National Intermodal Transportation Network Plan (2000-2019) was set up to securetransportation infrastructure to boost national competitiveness in the 21st century and to build a transportsystem that will be sufficient to handle the expected intermodal freight. There are five large-scale inlandcontainer depots that are in operation or under development in the Republic of Korea (Table V-1. TheseICDs are used primarily to distribute trade between the country’s two main ports (Busan and Gwangyang)and the hinterland. Each of these facilities is connected by rail to both of these ports, and all (exceptYangsan) have, or will be provided with full customs service. The first of these facilities, Uiwang ICD, wascompleted in 1993 with funding provided through a Build-Operate-Transfer contract with a privateconcessionaire.

Figure V-3. Throughput of Indonesia’s major dry ports, 2008

Source: Based on Indonesia Country Paper to Regional UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along theAsian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.

0

20,000

40,000

60,000

80,000

100,000

120,000T

EU

Import Export

Cikarang Gede Bage Cibungur Cirebon Solo Surabaya Tonjong Cilegon

Dry Port

96 Islamic Republic of Iran Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development ofDry Ports along the Asian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.


Lao People’s Democratic Republic

At present, Lao People’s Democratic Republic has one dry port, the Thanalaeng Warehouse StateEnterprise on the outskirts of Vientiane. With the completion of the rail link from Thanalaeng to Bangkokand Laem Chabang, there are plans to establish another dry port at the Thanalaeng Railway Station. Dryports are also planned for Savannakhet, at the intersection of NR13 and NR9 highways, which will improvelogistics facilities along the Greater Mekong Subregion East-West Economic Corridor; and at Champasackon NR16, which will facilitate transport on Thailand-Laos-Cambodia-Vietnam route.97

Malaysia

Dry ports have been an important feature of the logistics landscape in Malaysia since thedevelopment of the Sungai Way ICD in conjuction with the containerization of Port Klang in 1973. Atpresent there are six major facilities operating in Malaysia. The main details of these facilities are shown inTable V-2 below. Malaysia does not have an explicit national plan for the development of dry ports andICDs, and any impetus for further development of the network is expected to come from the private sector.

Table V-1. Inland container handling facilities in the Republic of Korea

Region LocationThroughput (TEU)

2010 Jan-Oct 2011

Seoul Uiwang, Kyunggi-do Province 753,127 903,000 841,000 1,370,000

Busan Yangsan, Kyungsangnam-do Province 951,940 395,000 250,000 1,400,000

Honam Jangsung, Chollanam-do Province 520,782 5,700 4,280 340,000

Central Chungboo, Chungchungbuk-do Province 480,736 3,500 11,290 350,000

Youngnam Chilgok, Kyungsangbuk-do 456,499 6,600 18,740 330,000

Source: Data provided to UNESCAP by Government of Korea.

Area (sq m) Capacity(TEU)

Table V-2. Dry Ports in Malaysia

Served by Container yardApproximate

Name Location(mode) area (m2)

throughput(TEU)

Ipoh Cargo Terminal (ICT) 181 km south of Penang Port and Road/Rail 30,000 40,000250 km north of Port Klang

Nilai Inland Port (NIP) 50 km south of Kuala Lumpur and Road/Rail/ Not known 4,00093 km from Port Klang Inland waterway

Prai ICD 10 km from Butterworth Terminal, Road/Rail 20,000 3,000Pinang

Sungai Way ICD 22 km from Port Klang Road/Rail 30,000 6,000

Padang Besar ICD* 158 km north of Penang Port and Road/Rail 20,000 90,000588 km north of Port Klang

Segamat Inland Port (SIP) 212 km south of Kuala Lumpur and Road/Rail 101,000 c. 1,000188 km north of Port Tanjung Pelepas

Source: Malaysian Country Paper to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along the Asian Highwayand Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.

* Padang Besar ICD does not provide a full range of services – it serves purely as an intermodal facility with transfer of cargo between road andrail.

97 Lao PDR Country Paper, presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along theAsian Highway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.


Mongolia

Dry port development plans for Mongolia centre on a small number of facilities serving strategiceconomic development zones. The government of Mongolia has identified four key locations: the ZamynUud Free Economic Zone, on the border with China; Samshand Industrial Park; Ulaanbataar; andAltanbulag Free Trade Zone, on the border with Russian Federation.98 In December 2010, The AsianDevelopment approved a US$ 40 loan for the development of the Zamyn Uud dry port.99

Nepal

Nepal has several dry ports in the border towns of Birgunj, Bhairahawa, Biratnagar, and Kakarbitta,which are key land customs points. Birgunj has rail access; the other three facilities are road-based. Anotherdry port is being developed at Larcha, near the border with China. The facilities are designed to offer thecomplete range of modern infrastructure to facilitate expeditious clearance of import and export cargomovement by containers.

The Birgunj Dry Port, located at Sirsiya, 4 km west of Birgunj town, is the biggest of the four,stretching over an area of 38 hectares. It is linked with a broad gauge railway which has a connection to theseaport in Kolkata via Raxaul. The complex has a railway yard with 6 full length lines. The containerstacking yard has 656 ground slots capable of holding 1,570 TEUs at one time with the possibility ofextensions up to 2,528 TEUs. Figure V-4 shows that throughput at Birgunj has grown strongly since itsinception in 1984, with growth over the last five years averaging nearly 20 per cent per annum.

The Kakarbhitta Dry Port has an area of 7.5 hectares and is reported to be currently handling80-90 trucks per day.100 The Biratnagar facility is a road-based ICD with a total area of 2.86 hectares. It hasa container yard of 3,700 sq.m. capable of holding 150 TEUs at a time and parking area for around80 trucks. The Bhairahawa ICD is also a road-based ICD with a total area of 3.6 hectares.

Figure V-4. Throughput at Birgunj Dry Port

Source: Based on data from Himalayan Terminals Pvt. Ltd. website, http://wwe.htpldryport.com, accessed 19 September 2011.

0

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6,000

8,000

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U

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

98 Mongolia Country Paper, UNESCAP Regional Expert Group Meeting on the Development of Dry Ports along the AsianHighway and Trans-Asian Railway Networks, 1-3 November 2010 Bangkok, Thailand.99 Asian Development Bank, 41192: Regional Logistics Development Project: Project Information Document, accessed on ADBwebsire http://www.adb/org, 19 September 2011.100 Ripak D. Sharma, Kakarbhitta dry port awaits its potential to be tapped, Republica, 13 Novenber 2011, viewed at http://www.myrepublica.com, 8 December 2011.


Thailand

Thailand has one major dry port facility, located at Lat Krabang approximately 30 kilometres eastof the centre of Bangkok. The Lat Krabang ICD was developed in the early 1990s in conjunction with thedevelopment of the new deepwater port at Laem Chabang, and has direct rail connections (as well as goodroad connections) with the port. The site, which is owned by the State Railway of Thailand, is divided intosix roughly equal modules, each of which is leased to a private terminal operator. The six modules shareaccess to a central rail spur. Throughput through Lat Krabang has grown strongly since the facility wasestablished, reaching nearly 2 million TEU before the downturn in trade brought on by the global financialcrisis.

Uzbekistan

The major dry port facilities in Uzbekistan are:

International Logistic Center Navoi: located in the Navoi Free Industrial Zone adjacent to theNavoi International airport, this facility is designed to facilitate the integration of road, rail andair transport.

International Logistic Center Angren: the Angren centre in Tashkent was commissioned in2010 and provides a full range of freight forwarding, cargo handling services, containertransportation, storage, customs clearance and certification of goods. It handled an estimated4 million tonnes of cargo in 2010.

International Logistic Center Tashkent: this centre is still under development. It is located2 km away from Tashkent ring road.

Container Terminal Station Chuqursoy: this facility occupies an area of 18.2 ha with a handlingcapacity of 460 containers per day. It handled approximately 20,000 containers in 2009.

There are also 22 regional ICDs focussed on meeting the needs of export cotton industry.101

B. Logistics Development in the ESCAP Region

The ESCAP region is home to some of the most sophisticated logistics operations in the world,with Singapore and Hong Kong, China in particular established benchmarks of world’s best practice inlogistics. However, many developing countries in the ESCAP region have yet to address logistics issues ina coherent way. In many countries in the region the “logistics industry” consists of a fragmented collectionof infrastructure, services, actors, rules and regulations that are administered or managed by independentministries, departments, agencies, organizations and companies, each operating in their own “silos”. Eventransportation alone, as one of the key activities in logistics, responsibility for each transport mode oftenfalls under the jurisdiction of separate agencies. Consequently, investment and development decisions arebased primarily on the needs of the sub-sector with little coordination between the different modes.

Information and communications technology (ICT) infrastructure and software are also crucialelements in the development of the logistics industry as they can, amongst others, provide information onthe location of goods and inventories, increase efficiency and reduce transactions costs. While individualcompanies and transport sub-sectors in some developed countries have established tracking and tracingsystems, no standardized systems are in place that cover all sub-sectors, countries and users. In view of themodal silo systems that have evolved, it is unlikely that standardization of transport and logisticsinformation systems will be achieved without policy interventions.

In some countries, a number of issues related to logistics fall under the jurisdiction of state orprovincial governments. Policy measures can include regulation of warehousing and distribution, toll gatesat state borders to collect local taxes, and regulation of farm-to-market supply chains. These practicesimpact directly on incomes of farmers, increase losses in the supply chain, impair the quality of produceand increases the prices paid by consumers.

101 Uzbekistan Country Paper presented to UNESCAP Regional Expert Group Meeting on the Development of Dry Ports alongthe Asian Highway and Trans-Asian Railway Networks, 1-3 November 2010, Bangkok, Thailand.


While infrastructure and logistics service providers are the elements that link the supply side ofthe logistics industry, institutional arrangements can play a significant role in stimulating the demand side.In the Republic of Korea, for example, where physical infrastructure and working capital seems to beless of an issue compared to other countries of the region, it is recognized that the demand for logisticsservices can be further stimulated. According to a 2006 survey by the Korea International TradeAssociation, small- and medium-sized businesses have a very low level of awareness, knowledge andinformation about third-party logistics service provider. 20.9 per cent of survey respondents cited “lack ofknowledge and information about 3PL” for their reason of not acquiring services.

1. Measuring Logistics Performance

In order to measure the quality and level of logistics, several indices have been developed. Themost commonly cited indices are the Logistics Performance Indicator and the “Doing Business AcrossBorders”, both developed by the World Bank. The Logistics Performance Index (LPI) summarizes theperformance of countries in six areas that capture the most important aspects of the current logisticsenvironment, as identified through theoretical and empirical research and extensive interviews withinternational logistics professionals:

Efficiency of the customs clearance processes.Quality of trade and transport-related infrastructure.Ease of arranging competitively priced shipments.Competence and quality of logistics services.Ability to track and trace consignments.Frequency with which shipments reach the consignee within the scheduled or expected time.

Figure V-5 shows the value of the World Bank Logistics Performance Index for selected ESCAPeconomies as well as the average for the region as a whole and for each subregion with ESCAP, andcompares these with the global average value.

The average value of the Index for ESCAP economies was very close to the global average in both2006 and 2009. But this overall average masks some significant differences between subregions. The Eastand North-East Asian subregion rates particularly well, with Japan and Hong Kong, China in particularacknowledged as being at or very close to world’s best practice. South-East Asia also rates very highly, withSingapore ranked second only to Germany in the global rankings and Malaysia and Thailand also rankedhighly. The Pacific subregion, taken as a whole, also scores above the world average, because of the highscores achieved by Australia and New Zealand on the index.

The average for South and South-West Asia fell below the global average in both years, but wasboosted by high scores for two of the subregion’s largest economies. By contrast, in North and Central theIndex was equal to or lower than the world average for all of subregional members in both 2006 and 2009.However, this subregion achieved the largest improvement in the Index between 2006 and 2009, will everymember of the group recording an improved performance.

A complementary perspective of logistics performance can be obtained from the World Bank’s costof Doing Business project. This project monitors the ease of doing business in 183 countries around theworld, looking at a set of nine key factors. Most of these do not relate directly to logistics, but one of them –the ease of trading across borders – reflects both the success of facilitation measures and the level oftransport costs. The ease of trading across borders is reflected in an index that takes into account:

the number of documents required to import and exportthe cost to import and exportthe time to import and export.


Figure V-5. World Bank Logistics Performance Index – Selected ESCAP economies

Source: Based on data in World Bank, Connecting to Compete – Trade Logistics in the Global Economy: the Logistics Performance Index andits Indicators, World Bank, Washington 2010.

Figure V-6 shows the ranking given to each of the ESCAP economies included in the reporting set,grouped by subregion. Singapore and Hong Kong, China rank first and second in the world on this measure.A number of the other East and North-East Asian and ASEAN economies also rank very highly. Withinthese subregions, there appears to be a storng correlation between ranking and level of economicdevelopment, with lower income countries clustered at the lower end of the rankings.

China

Hong Kong, China

Japan

Mongolia

Republic of Korea

East and North-East Asia Average�

Armenia

Azerbaijan

Georgia

Kazakhstan

Kyrgyzstan

Russian Federation

Tajikistan

Turkmenistan

Uzbekistan

North and Central Asia Average

Australia

Fiji

New Zealand

Papua New Guinea

Solomon Islands

Pacific Average

Afghanistan

Bangladesh

Bhutan

India


Maldives

Nepal

Pakistan

Sri Lanka

Turkey

South and South-West Asia Average�

Cambodia

Indonesia


Malaysia

Myanmar

Philippines

Singapore

Thailand

Viet Nam

�South-East Asia Average

ESCAP Average

World

World Bank Logistics Performance Index

2009 2006

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5


This relationship is not evident within the North and Central Asian subregion. All but two of theseeconomies are clustered within the bottom quartile of the rankings. (The exceptions are Georgia andArmenia), and there is no clear relationship between ranking and income level. Pacific Island countries,with the exception of the developed economies of Australia and New Zealand, are clustered around themedian value, while rankings of South and South-West Asian countries cover a comparatively broadspectrum, from a ranking of 73 for Sri Lanka to 183 for Afghanistan.

Figure V-6. Relative ease of trading across borders, 2011

Source: Based on data downloaded for the World Bank ‘Doing Business’ project website, http://www.doingbusiness.org, downloaded30 September 2011.


Cambodia

Timor-Leste

Viet Nam

Philippines

Brunei Darussalam

Indonesia

Malaysia

Thailand

Singapore

Afghanistan

Nepal

Bhutan

Maldives


Bangladesh

India

Pakistan

Turkey

Sri Lanka

Vanuatu

Palau

Fiji

Micronesia (Federated State of)

Papua New Guinea

Samoa

Solomon Islands

Kiribati

Marshall Islands

Tonga

Australia

New Zealand

Kazakhstan

Tajikistan

Azerbaijan

Uzbekistan

Russian Federation

Kyrgyzstan

Armenia

Georgia

Mongolia

China

Japan

Republic of Korea

Hong Kong, China

170

118

91

63

61

52

47

37

12

1

183

164

161

138

131

112

100

81

76

72

142

121

103

97

96

94

86

83

70

60

29

28

181

178

177

169

162

156

82

35

158

50

24

8

2

0 20 40 60 80 100 120 140 160 180 200

Rankings on ease of trading across borders


These patterns suggest that some caution is required in interpreting these results. While to someextent the rankings reflect the policies and procedures that are under the control of government, the size andlocation of the country also influence the cost and time of exporting. For this reason, the index is moreappropriately interpreted as a measure of the challenges facing an economy in forging links with theinternational trading community that as a measure of government performance.

The ‘Doing Business’ project has been tracking the six dimensions of the ease of trading acrossborders since 2004. Comparative data for most ESCAP economies is available for 2006 and 2011. Table V-3shows how performance on these dimesions has changed over this five year period. In most cases, the costof importing and exporting has increased. However, in most cases the time required to import and export,and the number of documents required in each case, has either improved or remained unchanged.

2. Developing a National Logistics Strategy

Some countries in the region have started to take initiatives to put in place policies to guide andsupport the development of efficient logistics. For example, the Government of Thailand adopted a nationalstrategy on logistics (2007-2011). In recent years the National Development and Reform Commission ofChina has been leading the development of national logistics policy with participation of seven ministriesand authorities as well as the private sector. In Japan, the Ministry of Economy, Trade and Industry and theMinistry of Land, Infrastructure and Transport jointly formulated a “Comprehensive Programme of LogisticsPolicies (2005-2009)”. In the Republic of Korea, many initiatives have been taken by the Government topromote the development of logistics. For example, in 1995, the Logistics Facilitation Act was revised andthe Distribution Centre Development Act was passed in order to provide financial incentives to developers.

Among the ways of assisting the industry players to implement more cost effective practices beingpursued by ESCAP and its member countries are the promotion of development of freight forwarderassociations. Indonesia, for example, has established a national logistics blueprint and multimodaltransportation blueprint, while Malaysia is implementing a range of initiatives aimed at supportingimproved freight forwarding practices, such as the establishment of establishing industry standards anda professional accreditation body for freight forwarders, customs agents, and shipping operators; a NationalLogistics Council; and an independent research body, namely, a Supply Chain and Logistics Centre for thepurpose of strengthening rules and regulations on road hauliers, introducing container safety measures;reviewing licensing policies on road transport; and adopting more liberal employment policies for foreignexperts.102

One of the most significant factors impeding the further development of multimodal transport andadoption of logistics solutions within the ESCAP region is the limited number of trained personnelavailable to the industry. The provision of the full range of freight forwarding and multimodal transportservices requires up-to-date knowledge of a broad range of issues, including regimes of liability andapplicable international conventions, contract law, trading terms, documentary credits, customs proceduresand documentation, quarantine requirements, transport arrangements, packaging and labelling requirements,dangerous goods codes, and recovery claims and insurance. As well as these operational capabilities, thereis also a need to improve core management capabilities for running small businesses. In addition, due to thecomplexity of the tasks and responsibilities assumed by the multimodal transport operator on behalf ofshippers, a thorough knowledge of case law and precedents can help in avoiding unnecessary risks and, inthe case of loss, lead to a speedy and satisfactory resolution of claims.

The general lack of common standards in the region impedes progress of the freight forwardingindustry in development of the operational capacities. As well as supporting freight forwarders through skilldevelopment, it is also important to enhance their professionalism and competitiveness by establishingminimum standards and codes of conduct for participation in the industry. As suggested by Table V-4below, research conducted by ESCAP revealed that freight forwarders (as well as NVOCCs and MTOs)in the Region may be managed by different models of government regulation and licensing or industryself-regulation.

102 Report of the UNESCAP Regional Forum of Freight Forwarders, Multimodal Transport Operators and Logistics ServiceProviders, Bali, Indonesia, 15 July 2010.


Table V-3. Change in ease of trade across borders, 2006-2011

EconomyDocuments Time to Cost to Documents Time to Cost to to export export export to import import import

China Increased Increased Increased Decreased Unchanged Increased

Hong Kong, China Decreased Decreased Increased Decreased Decreased Increased

Japan Unchanged Unchanged Increased Unchanged Unchanged Increased

Mongolia Decreased Decreased Increased Decreased Decreased Decreased

Republic of Korea Decreased Decreased Increased Decreased Decreased Decreased

Armenia Decreased Decreased Increased Unchanged Decreased Increased

Azerbaijan Unchanged Decreased Increased Unchanged Decreased Increased

Georgia Decreased Decreased Decreased Decreased Decreased Decreased

Kazakhstan Decreased Decreased Increased Decreased Decreased Increased

Kyrgyzstan Decreased Decreased Increased Decreased Decreased Increased

Russian Federation Unchanged Unchanged Increased Unchanged Unchanged Increased

Tajikistan Unchanged Unchanged Increased Decreased Unchanged Increased

Uzbekistan Unchanged Decreased Increased Unchanged Decreased Increased

Australia Increased Decreased Increased Decreased Decreased Increased

Fiji Unchanged Decreased Increased Unchanged Decreased Increased

Kiribati Unchanged Unchanged Decreased Unchanged Unchanged Decreased

Marshall Islands Unchanged Unchanged Increased Unchanged Unchanged Increased

Micronesia (Federated State of) Unchanged Unchanged Increased Unchanged Unchanged Increased

New Zealand Unchanged Unchanged Increased Unchanged Unchanged Increased

Palau Unchanged Unchanged Decreased Unchanged Decreased Decreased

Papua New Guinea Unchanged Unchanged Increased Unchanged Unchanged Increased

Samoa Unchanged Unchanged Decreased Unchanged Unchanged Unchanged

Solomon Islands Unchanged Unchanged Decreased Unchanged Unchanged Decreased

Tonga Unchanged Unchanged Increased Unchanged Decreased Increased

Vanuatu Unchanged Unchanged Decreased Unchanged Unchanged Decreased

Afghanistan Increased Increased Increased Increased Decreased Increased

Bangladesh Unchanged Decreased Increased Unchanged Decreased Increased

Bhutan Unchanged Unchanged Increased Unchanged Unchanged Increased

India Unchanged Decreased Increased Unchanged Decreased Decreased

Islamic Republic of Iran Unchanged Decreased Increased Unchanged Decreased Increased

Maldives Unchanged Unchanged Increased Unchanged Increased Increased

Nepal Unchanged Decreased Increased Unchanged Unchanged Increased

Pakistan Unchanged Decreased Decreased Unchanged Decreased Increased

Sri Lanka Increased Decreased Increased Decreased Decreased Increased

Turkey Decreased Decreased Increased Decreased Decreased Increased

Cambodia Increased Decreased Decreased Decreased Decreased Increased

Indonesia Unchanged Decreased Increased Unchanged Unchanged Decreased

Lao People’s Democratic Republic Decreased Decreased Increased Decreased Decreased Increased

Malaysia Unchanged Unchanged Increased Unchanged Unchanged Increased

Philippines Unchanged Decreased Decreased Unchanged Decreased Decreased

Singapore Unchanged Unchanged Increased Unchanged Unchanged Increased

Thailand Decreased Decreased Decreased Decreased Decreased Decreased

Timor-Leste Unchanged Unchanged Increased Unchanged Unchanged Increased

Viet Nam Unchanged Decreased Increased Decreased Decreased Increased

Source: Based on data downloaded for the World Bank ‘Doing Business’ project website, http://www.doingbusiness.org, downloaded30 September 2011.


ESCAP is currently working to develop a draft code of conduct, as well as minimum standards forstaff qualifications and numbers. ESCAP’s research suggested that when choosing a model, the level ofeconomic development and the maturity of the industry, the legal regime, and the national industry policiesneed to be taken into consideration. It was also suggested that it is desirable for a country to set up anintegrated government agency in managing freight forwarders, NVOCCs and MTOs. However, if differentgovernment authorities are in charge of different types of operators, coordination among them needs to bepromoted.

Table V-4. Government regulations and industry self regulations forfreight forwarders

CountryGovernment Industry selfregulations regulations

Bangladesh Yes Yes

China Yes Yes

Indonesia Yes Yes

Republic of Korea Yes Yes

Philippines Yes Yes

India No Yes

Lao People’s Democratic Republic No Yes

Myanmar No Yes

Singapore No Yes

Sri Lanka No Yes

Thailand No Yes

VI. Facilitating Transport Across Borders 81

VI. FACILITATING TRANSPORT ACROSS BORDERS

A. Implementation of International Conventions and Agreements Relating toTransport Facilitation and the Movement of Goods

and Services across Borders

International trade has played an increasingly prominent role in driving economic growth aroundthe world, and in the Asia and Pacific region in particular. While recognising the importance ofinfrastructure, however, it is now widely accepted the institutional and regulatory rules governing themovement of goods and people across borders have an equal if not bigger influence on internationaltransport. For the road transport sector, for example, the smooth and efficient flow of transport requires theharmonization of a number of elements:

infrastructure planning standards and signage.

rules on access to the transport market and the right to conduct transport operations.

technical insurance and customs regulations relating to the means of transport (trucks, trailers,et cetera).

driver licensing standards and visa requirements.

customs and quarantine rules governing the movement of cargo.

traffic rules.

Broadly speaking, measures to address issues such as those listed above are grouped together astrade and transport facilitation issues. Many international organizations have promoted internationalconventions and agreements as a means to harmonize the rules regulating international movement of goods.For example, international transport conventions and agreements such as those developed under theauspices of the United Nations Economic Commission for Europe (UNECE) have focused on the transport-related aspects of the movement of goods and people, such as cross-border movement of vehicles, goods,transit fees, and visas for drivers. Most subregional agreements which were subsequently developed underthe auspices of subregional organizations and groupings contain the same principles or refer to theinternational transport conventions, particularly those relating to road transport.

Recognizing that the harmonization of certain rules governing the international movement of goodsby road and rail could contribute to international trade by reducing time and costs, the ESCAP Commissionadopted Resolution 48/11 on “Road and rail transport modes in relation to facilitation measures” in 1990.This resolution recommended that ESCAP member countries consider the possibility of acceding to thefollowing seven core international conventions relating to transport facilitation:

Convention on Road traffic (Vienna, 8 November 1968)

Convention on Road Signs and Signals (Vienna, 8 November 1968)

Customs Convention on the International Transport of Goods under Cover of TIR Carnets(TIR Convention) (Geneva, 14 November 1975)

Customs Convention on the Temporary Importation of Commercial Road Vehicles (Geneva,18 May 1956)

Customs Convention on Containers (Geneva, to December 1972).

International Convention on the Harmonization of Frontier Control of Goods (Geneva,21 October 1982) and

Convention on the Contract for the International Carriage of Goods by Road (CMR) (Geneva,19 May 1956).


Table VI-1 provides an update of the status of accession by ESCAP member states. Although therehas been some progress since resolution 48/11 was adopted, the legal and institutional harmonization at thelevel expected has yet to be achieved. A review undertaken by ESCAP in 2006 identified several keyobstacles to the effective implementation of the resolution and recommended a new strategy to supportfurther progress. The review also recommended the inclusion of three additional facilitation conventions:

Protocol to the Convention on Contracts for the international carriage of goods by road, 1978.

International Convention on the Simplification and Harmonization of Customs Procedures, asAmended (revised to Kyoto convention), 1973.

Convention on Temporary Admission (Istanbul Convention), 1990.

Table VI-1. Status of accession of ESCAP Regional Members to the International Conventions listedin Commission resolution 48/11, as of 30 November 2011

Country or area Convention Convention Customs Customs Customs International Conventionon Road on Road Convention Convention Convention Convention on theTraffic Signs and on the on the on on the Contract(1968) Signals International Temporary Containers Harmonization for the

(1968) Transport Importation (1972) of Frontier Internationalof Goods of Controls of Carriage

under Commercial Goods of GoodsCover of TIR Road (1982) by Road

Carnets Vehicles (CMR)(1975) (1956) (1956)

Group I: Mainland Asia

Afghanistan x xArmenia E E E E EAzerbaijan E E E E E E E

BangladeshBhutanCambodia xChina xDemocratic People’sRepublic of KoreaGeorgia E E E E E E

India xIslamic Republic x x x E Eof IranKazakhstan E E E E E EKyrgyzstan E E E E E E ELao People’s EDemocratic RepublicMalaysia

Mongolia E E E E EMyanmarNepalPakistan x xRepublic of Korea S 1 S x xRussian Federation x x x x x x

Singapore xTajikistan E E E EThailand S STurkey x E x E ETurkmenistan E E E EUzbekistan E E E E E E E

Viet Nam


The facilitation of transport is also connected to the broader issue of the liberalisation andfacilitation of trade. On the one hand, it can be argued that trade liberalisation agreements give meaning andurgency to transport facilitation agreements, especially as these relate to the carriage of goods. In somecases trade liberalization measures also lead directly to improved transport performance: for example, thosemeasure which liberalise the trade in transport services. Trade facilitation agreements, such as agreementsto simplify customs procedures, also have an impact on transport movements across borders; they not onlylower the cost of preparing and processing customs documentation, but also reduce the time that cargoesspend in transit.

The agreements negotiated under the World Trade Organization have both a direct and indirectbearing on the rules and regulations governing the movement of freight across borders. The GeneralAgreement on Trade in Services (GATS), negotiated under the Uruguay Round, is the first multilateral setof legally binding rules for international trade in services. Under GATS, trade in services is subdivided intoeconomic sectors, including transport, and each sector is characterized by four modes of supply:

Mode 1 – cross-border supply (services supplied from one country to another – for example,international telephone calls);

Mode 2 – consumption abroad (consumers or firms making use of a service in another country– for example, tourism)

Mode 3 – commercial presence (a foreign company setting up subsidiaries or branches toprovide services in another country – for example foreign banks setting up operations ina country); and

Mode 4 – presence of natural persons (individuals travelling from their own country to supplyservices in another – for example, fashion models or consultants).103

The GATS commits member governments to undertake negotiations on specific issues and to enterinto successive rounds of negotiations to progressively liberalize trade in services. Services negotiations

Table VI-1. (continued)

Country or area Convention Convention Customs Customs Customs International Conventionon Road on Road Convention Convention Convention Convention on theTraffic Signs and on the on the on on the Contract(1968) Signals International Temporary Containers Harmonization for the

(1968) Transport Importation (1972) of Frontier Internationalof Goods of Controls of Carriage

under Commercial Goods of GoodsCover of TIR Road (1982) by Road

Carnets Vehicles (CMR)(1975) (1956) (1956)

Group II: Island countries

Brunei Darussalam

Indonesia S S x xJapanMaldivesPhilippines x xSri Lanka

Source: http://treaties.un.org/Pages/Treaties.aspx?id=11&subid=A&lang=en http://www.unece.org/trans/conventn/legalinst.html,

Notes: x acceded before adoption of ESCAP Commission Resolution 48/11.

E acceded after adoption of ESCAP Commission Resolution 48/11.

S signature.1 The Republic of Korea acceded to the Convention on Road Traffic (1949), while it remains as a signatory of the new version of the convention(1968).

103 World Trade Organization, “Discussion Paper on the Environmental Effects of Services Trade Liberalization (WT/CTE/W/218)”, October 2002, viewed on the WTO website on 26 November 2007 at http://www.wto.org/english


started officially in early 2000 under the Council for Trade in Services. Progress has been erratic, withseveral periods during which negotiations have effectively stalled, partly because of linkages betweennegotiations of services and negotiations in other particularly intractable areas – notably agriculture andmore recently, reduction in carbon dioxide emissions.104 In a report to the Trade Negotiations Committee ofthe WTO in April 2011, the Chairman of the Negotiating Committee summarised progress in the followingterms:

“While Members have intensified their engagement in the negotiations as of January 2011, gapsremain. Limited progress has been achieved in the market access negotiations since July 2008. Ondomestic regulation, recent intensification of negotiations has produced notable progress, even ifdisagreement persists on important and basic issues. On GATS rules, while technical workcontinues, there does not seem to be any convergence regarding the expected outcome in any of thethree negotiating subjects (safeguards, government procurement and subsidies). On theimplementation of LDC modalities, while Members support a waiver permitting preferentialtreatment to LDCs, disagreements continue, mainly regarding the scope of the waiver, and rules oforigin for services and service suppliers.”105

The generally mixed outcome of the negotiations on trade in services extends to areas that relatemore specifically to services related to transport and logistics. The state-of-play in four such areas, asdescribed in the Chairman’s report, is summarised in the Table VI-2 below.

Table VI-2. Summary of GATS progress on matters related to transport and logistics, 2011

Service Type Summary of Progress

Air transport Some improvements of existing offers had been indicated at the plurilateral meeting in March 2011,notably in the sub-sectors of aircraft maintenance and repair, selling and marketing, and computerreservation services. On ground handling services and airport operation services, some Membersindicated that they would take commitments. Other Members considered that these two sub-sectorswere not covered by the Annex and, therefore, they would not consider offering any commitments. Insum, gaps still remained between the request and the offers tabled and signals given.

Maritime transport 13 of the 25 recipients had made positive indications at the Signalling Conference in 2008 or duringbilateral and plurilateral meetings, but no recipient had fully met the plurilateral request. Althoughsome recipients and co-sponsors had taken positive steps towards meeting the plurilateral request, itwas felt that significant gaps remained and further efforts to meet the level of ambition of the requestwere needed.

Distribution services In the lead-up to the 2008 Signalling Conference, 12 of the 27 recipients (including the eightco-sponsors) had indicated that they would consider further improvement to their offers in response tothe request. However, a sizable gap remained between the request’s ambition as well as autonomousmarket openings and the offers and signals of recipients. No recipient had offered commitments for allsub-sectors included in the request. Regarding the specific request for the removal or easing of foreignequity caps, only 12 recipients had indicated not to have any equity caps and only one recipientsignalled easing of existing caps. While welcoming progress, co-sponsors believed that it wasimportant to at least bind current autonomous liberalization.

Logistics services About one half of the 41 recipients of the request (including co-sponsors) had given positive signals inrespect of certain logistics services at the Signalling Conference in 2008. While there were relativelymore positive signals on “other related services”, few were given in “core freight logistics services”and “management consulting and related services”, and only a few positive indications were providedregarding rail and road freight transportation services. Significant gaps persisted between recipients’offers or indications and the request.

Source: Based on report of Ambassador Fernando de Mateo, Chairman of the Negotiating Committee on Trade in Services, Report to the TradeNegotiations Committee, 21 April 2011.

104 Timeline on progress of GATS negotiations, World Trade Organization website, http://www.wto.org, accessed 19 September2010.105 Ambassador Fernando de Mateo, Chairman of the Negotiating Committee on Trade in Services, Report to the TradeNegotiations Committee, 21 April 2011.


In addition to the liberalization of trade in services, the World Trade Organization has activelypromoted trade facilitation. The WTO’s work on trade facilitation complements that of many otherinternational organizations – such as World Customs Organization, the United Nations Centre for TradeFacilitation and Electronic Business (UN/CEFACT), OECD, UNCTAD, the World Bank, regionalcommissions, and private sector. The work of these actors not have the binding force of WTOcommitments, but consists of facilitation of agreements, development of recommendations, preparation ofconventions, articulation of standards, and technical assistance projects. Critically, they are crucial to the“practical implementation of trade facilitation reforms, as they provide practical solutions, allow for theexchange of experiences, and develop harmonized approaches”.106

Despite the many difficulties hampering the conclusion of the current Doha Round, therefore, someobservers have noted that there has been some progress in the area of trade facilitation.107 At the centre ofthe negotiations are the level of obligation and the level of precision that the new rules will have, as well astheir overall coherence. In general, the language of the negotiating text is non-prescriptive, expressed in“best endeavour” terms rather than binding commitments. This is attributed partly to uncertainty on the partof developing countries on the concerns about implementation, and also by issue linkage between thenegotiations on trade facilitation and the Doha Round’s other negotiating areas.108

B. Subregional Approaches to Transport Facilitation

In a move that has paralleled the growth of Preferential Trade Agreements, the number, magnitudeand extent of subregional cooperation initiatives and organizations have increased significantly over thepast 20 years. Most new initiatives involved only a handful of countries at a time. The result of these trendsis a “hub-and-spoke” system of agreements and programmes. For example, the International North-SouthTransport Corridor (INSTC) founding members were India, the Islamic Republic of Iran and the RussianFederation, and BIMSTEC links a subset of members of SAARC with a subset of members of ASEAN.

The conclusion of these agreements and initiatives, however, has sometimes lead to theestablishment of different legal and operating regimes for the inter-subregional movements of goods,vehicles and passengers. These differences can act as physical and non-physical barriers to smooth andefficient transport between subregions. As a result, these subregions can effectively become “isolatedislands” with little land transport and trade to and from other subregions.109

A recent ESCAP report on “Regional Cooperation for Facilitation of International Road Transport”notes that while many subregional agreements relating to transport facilitation have been developed overthe past two decades, “many of the subregional agreements took years to negotiate and also years tocomplete the legal process for entry into force after conclusion of the negotiation”.110 The report expressesconfidence that for most comprehensive subregional facilitation agreements, focus will move fromnegotiation to implementation in the next five to ten years, but draws attention to the significant challengesthat will be faced in operationalizing these agreements. In particular, the geographical overlap of thesubregional agreements, combined with their differing terms and conditions, may create legal conflicts – forexample in the adoption of international conventions.

Furthermore, partly as a consequence of the slow development of regional and subregionalagreements, a large number of bilateral agreements now underpinned the international movement of roadfreight in the ESCAP region. Many countries have signed more than ten, and some over 40, bilateralagreements on road transport. The same report notes that “[formulation management and implementation of

106 UNCTAD, p. 135.107 According to UNCTAD, “the WTO negotiations on trade facilitation are now in their sixth year and are widely described asan area of the Doha Round in which tangible progress has been made.” UNCTAD, Review of Maritime Transport 2010,UNCTAD, Geneva, p. 134.108 UNCTAD, loc. cit.109 ESCAP, Emerging issues in transport: Connecting subregional transport networks, paper prepared for the Expert GroupMeeting on Preparations for the Ministerial Conference on Transport, Bangkok, 14 and 15 July 2011 (TD/EGM.1/2011/12).110 ESCAP, Report of Study on Regional Cooperation for Facilitation of International Road Transport, prepared for RegionalMeeting on Cooperation for Facilitation of International Road Transport, 30 May – 1 June 2011, Beijing, p. 21.


the numerous agreements represents a challenge for governments, inspectors, carriers and drivers”, andrecommends the development of a “standardized structure or template the model clauses further bilateralagreements on international road transport… [which would]… help to reduce the differences between thebilateral agreements and to better align it with international conventions and subregional agreements”.111

The current status of transport facilitation initiatives under selected subregional organizations isdescribed below.

1. Shanghai Cooperation Organization (SCO)

The Shanghai Cooperation Organization (SCO) was formed from regular Summit Meetingsbetween China, Kazakhstan, Kyrgyzstan, the Russian Federation and Tajikistan which aimed primarily topromote cooperation, regional and global peace, security and stability. In 2001, the Prime Ministers of theSCO members signed a Memorandum of Understanding (MOU) on Fundamental Goals and Directions ofRegional Economic Cooperation and Kick-off of the Process for Facilitation of Trade and Investmentbetween the Governments of Members of the Shanghai Cooperation Organization. The MOU specificallynoted the potential of transit transport with effective utilization of the existing transport and communicationinfrastructure, and the opportunity to realize facilitation of trade and investment through ensuring legal,economic, organizational and other conditions for goods and passenger transport (including transittransport).112 The Charter of the Shanghai Cooperation Organization, which was signed at the Second SCOSummit Meeting, also underlined the need for the improvement of transit potential of member countrieswith effective utilization of existing transport infrastructure.113

In September 2003, the Prime Ministers of the SCO members approved the Programme ofMultilateral Economic and Trade Cooperation of the Shanghai Cooperation Organization Members duringtheir meeting at Beijing, China. The programme includes cooperation in utilization and further developmentof transport as one of the essential tasks, and utilization of existing transport infrastructure and common useof potential of transit transport as priority areas. The Prime Ministers’ Meeting in Beijing also issueda communiqué, which stated that the Prime Ministers of the six countries advocate that the SCO membersshould further strengthen cooperation in transport, improve transport infrastructure, coordinate transittransport policies, establish international transport corridors and formulate relevant multilateralinstruments.114

In June 2008, Kyrgyzstan hosted the eighth meeting of experts from the SCO member states on thepreparation of the draft Agreement on road transportation facilitation. During the negotiations, the partiesreached a united position on all the articles of the Agreement and expressed hope for the earliest possibleformulation of Addenda to the Agreement after its initialling. This was followed by the fourth Meeting ofthe Ministers of Transport of the Member States of the Shanghai Cooperation Organization in 2009. TheMinisters noted significant progress in transport cooperation of the member states which had playeda positive role in developing economic cooperation in the SCO region. These included SCO pilot projects inthe field of transport, such as the China-Kyrgyzstan-Uzbekistan motorway and E-40 route, as well as otherimportant projects of regional transport cooperation, including the construction of Tajikistan-Uzbekistanmotorway. The Ministers particularly noted the completion of the draft framework Agreement among thegovernments of the SCO member states on international road transportation facilitation. The experts wereinstructed to continue their work in preparing the relevant Appendices to the draft Agreement.

A series of meetings has subsequently been held to finalise the text of the main agreement on theAgreement on the Facilitation of International Road Transport, and the negotiation of the operationalannexes to the agreement. The third and most recent negotiating meeting was held in September 2011 inShanghai. The parties to the agreement are considering multilateral transport permit that “would be

111 ibid, p. 25.112 Articles 1, 2 and 3, Memorandum of Understanding on Fundamental Goals and Direction of Regional Economic Cooperationand Kick-off of the Process for Facilitation of Trade and Investment between the Governments of Members of the ShanghaiCooperation Organization, Almaty, Kazakhstan, 14 September 2001.113 Article 3, Charter of the Shanghai Cooperation Organization, Saint Petersburg, Russian Federation, 7 June 2002.114 Paragraph 5, Joint Communiqué on the Meeting of the Prime Ministers of the Shanghai Cooperation Organization Members,Beijing, China, 23 September 2003.


centrally issued and distributed and issued to transport operators by national issuing authorities. Initially itwould be valid for a single trip within one year of issuance. Quotas will be decided annually by a jointcommittee of the contracting parties”.115

2. Greater Mekong Subregion (GMS)

Cross Border Transport Agreement (CBTA)

Historically, the Greater Mekong Subregion (GMS) has faced inconsistent and difficult bordercrossing formalities and procedures, restrictions on entry of motor vehicles, restrictive visa requirements,and different standards on vehicles and drivers across countries. The Agreement for the Facilitation of theCross-Border Transport of Goods and People in the Greater Mekong Subregion (GMS CBTA) was signedby the Lao People’s Democratic Republic, Thailand and Viet Nam on 26 November 1999. Subsequently itwas acceded to by Cambodia on 29 November 2001; by China on 3 November 2002; and by Myanmar on19 September 2003.116 The agreement is a 10-year development strategy that aims to facilitate the crossborder movement of people and goods.117

The GMS agreement attempts to harmonize these procedures and reduce the non-physical barriersof cross-border freight movement. Lao People’s Democratic Republic and Viet Nam were the first twocountries to implement the GMS agreement. The initial stage saw the Lao Bao border gate in Huong Hoadistrict and central Quang Tri Province commence single window and single stop inspections.Representatives of the Governments of Lao People’s Democratic Republic and Viet Nam signeda memorandum of understanding on initial implementation of the GMS agreement at the two border gatesand are continuing to negotiate the remaining annexes and protocols of the agreement. As a result of thisinitial signing, the time required for cross border procedures and transport costs has been cut.118

The East-West corridor linking Lao People’s Democratic Republic, Myanmar, Thailand and VietNam previously allowed most trucks to move freely across the Lao-Thai border. However, any movementsfurther inside the countries were restricted to the border areas. Because of the absence of inland containerdepots near the border, Lao goods are brought across the border as loose cargo, transferred to Thai trucks,and transported to the port where they are loaded into containers. The implementation of the GMSagreement is an attempt to reduce the above barriers by creating a streamlined process of transit throughthis corridor. Initial Memoranda of Understanding were signed for Mukdahan-Savannakhet (July 2005) andLao Bao-Dansavanh (March 2007).

With financial and technical assistance from the Asian Development Bank, the GMS countriesdrafted, negotiated, and finalized a set of annexes and protocols to articulate the detailed commitmentsrequired to operationalize the CBTA. These annexes and protocols were prepared in consultation with otherrelevant agencies, such as ESCAP and the United Nations Economic Commission for Europe (ECE) toensure that they were in conformity with the substantive provisions of relevant international conventions.By 2010, formalization of the agreement was complete, with the main gaps in the ratification processconfined to two GMS countries: Thailand has ratified only 11 of 20 annexes and protocols, while Myanmarhas yet to ratify any.

However, there is still a considerable way to go before the CBTA is fully effective. Progress on theexchange of traffic rights in particular has been slow. At present, traffic rights under the CBTA have beengranted only for operations on a small number of the designated corridors and are limited in number. Thisconstrains and increases cost of delivery of the goods to their final inland destination. Bilateral exchangeof traffic rights has been adopted by Viet Nam and Lao People’s Democratic Republic, Cambodia andThailand, Cambodia and Viet Nam. The GMS Customs Transit and Temporary Admission System does notyet function as intended and utilization is low.

115 ESCAP, Report of Study on Regional Cooperation for Facilitation of International Road Transport, Regional Meeting onCooperation for Facilitation of International Road Transport, 30 May – 1 June 2011, Beijing, China, p. 36.116 Study of transit charges to be assessed under Protocol 2 of the Agreement for the facilitation of the Cross Border Transport ofGoods and People in the Greater Mekong Subregion, November 2004.117 http://www.johannesburgsummit.org/html/prep_process/national_reports-/cambodia_natl_assess.pdf118 Viewed on VOV Radio News, 2005, http://www.vov.org.vn


Strategic Framework for Connecting GMS railways

Because the major cross-border activity in the GMS region was road-based, the initial focus oftransport facilitation activity was on the facilitation of road transport. However, more recently cross-borderrail operations have been gaining increased priority. The 16th GMS Ministerial Conference held in Hanoi in2010 sought to address this need by endorsing a Strategic Framework for Connecting GMS Railways. TheFourteenth Meeting of the GMS Subregional Transport Forum, held in Nanning, China, with the theme“Next Generation of Transport Connectivity in the GMS”, focused on revisiting the recommendationsendorsed by the Ministerial Conference, and trying to translate these into a plan of action.

The Strategic Framework identified five key priority actions:

Ensuring that all GMS countries are connected to a rail network by 2020

Promoting development of a seamless rail network by:– agreeing on technical standards of interoperability– streamlining and harmonizing procedures for cross-border movement of people and goods

Ensuring that railway infrastructure and equipment are modern and sufficient to meet thedemand for rail services

Supporting the development of GMS railway organizations and the implementation of bestpractice in the operation and regulation of GMS railways

Involving the private sector in the planning and development of the GMS railway network119

The Strategic Framework is a significant first step toward the development of an integrated GMSrailway system, which is a key element of the multimodal transport connectivity envisioned for thesubregion. It was also announced in the meeting that ADB would provide technical assistance (TA) to helpset up and prepare a detailed business and financing plan for a GMS Railway Coordination Office (RCO),a key recommendation of the Strategic Framework. The RCO will help ensure that GMS countries’ railwayplans and broad activities are coordinated and that all stakeholders are engaged in the future development ofGMS railways.120

3. IGC-TRACECA

The Basic Multilateral Agreement (MLA) on International Transport for the Development of theTransport Corridor Europe-Caucasus-Asia routes, and its technical annexes were signed by Armenia,Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Ukraineand Uzbekistan, on 8 September 1998. The Islamic Republic of Iran acceded to the MLA in 2009. TheMLA aims at:

developing economic relations, trade and transport communications in the regions of Europe,Black Sea, the Caucasus, the Caspian Sea and Asia,

facilitating access to the international market of road, air and railway transport and alsocommercial maritime navigation,

facilitating international transport of goods and passengers and international transport ofhydrocarbons,

ensuring traffic safety, security of goods and environment protection,

creating equal conditions of competition between different types of transport.121

119 ABD, Connecting GMS Railways: A Strategic Framework, Mandaluyong City, Philippines: Asian Development Bank, 2010.120 Greater Mekong Subregion Economic Cooperation Project, Fourteenth Meeting of the GMS Subregional Transport Forum,Nanning, Guangxi Zhuang Autonomous Region People’s Republic of China, 2-3 December 2010, Summary of Proceedings.121 Basic Multilateral Agreement (MLA) TRACECA, viewed on TRACECA website, http://www.traceca-org,org, 20 September2011.


In July 2008, the TRACECA Legal Working Group developed a Draft Agreement on thedevelopment of Multimodal Transport, with the objective of harmonising the relevant legislation of membercountries to provide a unified legal framework based on a consistent set of definitions and concepts.The Working Group has also developed a draft Model National Law on Freight Forwarding Activity.122 On16 June 2009, the 7th Meeting of the Intergovernmental Commission TRACECA the MLA Parties adoptedthe Agreement on Development of Multimodal Transport TRACECA. The agreement commits the partiesto the agreement to endeavouring to harmonize their legislation to implement a unified legal framework formultimodal transport development using the definitions and based on the concepts based in theAgreement.123

To further progress the objectives of the MLA, The IGC-TRACECA has developed and adopteda formally articulated strategy. This strategy identifies seven key focus areas for TRACECA through to2015:

Strengthening and modernising the institutional dimensions of transportIntegration and cohesion of infrastructure networksDevelopment of sound multimodal chainsExploiting the full potential of air transport and boosting air passenger trafficMaking transport within TRACECA safe, secure and sustainableSecure funding solutionsSupporting the strategy by strengthening IGC-TRACECA.124

4. Economic Cooperation Organization (ECO)

The members of the Economic Cooperation Organization (ECO), namely, Afghanistan, Azerbaijan,the Islamic Republic of Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan andUzbekistan, signed the Transit Transport Framework Agreement (TTFA) on 9 May 1998. In 2002, ECOundertook a reconciliation of the inconsistencies between the agreement and the Transit Trade Agreementsigned on 15 March 1995.125 The Transit Transport Coordination Council (TTCC) conducted severalmeetings between 2006-2007 to finalize modalities for establishment of ECO Fund for implementation ofTTFA. The Transit Transport Framework Agreement (TTFA) entered in to force in May 2007.

The main purposes and objectives of the TTFA and its Annexes are:

to facilitate the movement of goods, luggage and passengers through the respective territoriesof the Contracting Parties and provide all necessary facilities for transit transport under theprovisions of this Agreement.

to ensure the safety of goods, luggage and passengers and avoidance of unnecessary delaysduring the transit traffic through territories of Contracting Parties;

to cooperate and coordinate the efforts of the Contracting Parties to avoid the incidence ofcustoms frauds and tax evasion and harmonizing necessary administrative affairs dealing withtransit traffic.

At the Third Meeting of TTCC, the Council decided that the joint ECO/IRU/UNECE regionalworkshop for capacity building on international conventions mentioned in the TTFA, should considerdevelopment of a roadmap for implementation of the relevant conventions, in particular the TIRconvention, in the ECO region. UNESCAP and other relevant international organizations should be invited

122 Central Asia Transport website, http://www.centralasiatransport.com, viewed 31 December 2009.123 TRACECA, Agreement on Multimodal Transport, downloaded from TRACECA website, http://www.traceca-org.org,20 September 2011.124 TRACECA, Strategy of the Intergovernmental Commission TRACECA for the development of the intermodal transportcorridor “Europe-Caucasus-Asia” (TRACECA) for the period to 2105, downloaded from TRACECA website, http://www.traceca-org.org, 20 September 2011.125 ECO Transit Transport Framework Agreement, Almaty, Kazakhstan, May 1998.


to this workshop. Expressing its satisfaction with the approval of a Technical Assistance (TA) Grant by IDBand ECO Feasibility Study Fund for preparation of a regional programme on implementation of the TTFA,the Meeting agreed steps to be taken by the ECO Secretariat and the Member States for effectiveimplementation of the TA project.126

At the 8th Meeting of the Ministers of Transport and Communications of the ECO Member Statesheld in 2011, the Ministers endorsed the new Programme of Action for ECO Decade of Transport andCommunications. Other decisions included endorsement of the establishment of the ECO Logistic ProviderAssociations Federation, and developing road transport corridor on Islamabad-Tehran-Istanbul as well as onIslamic Republic of Iran-Afghanistan-Tajikistan-Kyrgyz Routes.

126 Moj News Agency, A Report on 3rd Meeting of ECO’s Transit Transport Coordination Council (TTCC). viewed on theHighbeam website, http://www.highbeam.comm , 20 September 2011.

VII. Safe and Sustainable Transport 91

VII. SAFE AND SUSTAINABLE TRANSPORT

A. Road Safety

Increasing economic activities and the rapid growth in population have led to a significant effect onthe growth of motor vehicles in the ESCAP region. Consequently, this has resulted in an upsurge in thenumbers of road accidents in several countries within the region, particularly within metropolitan cities.Worldwide, road traffic takes the lives of nearly 1.3 million people every year, and injures 20-50 millionmore.127 According to the World Health Organization, road traffic fatalities are predicted to rise to becomethe fifth leading cause of death by 2030, resulting in an estimated 2.4 million fatalities per year.

Road traffic fatalities and injuries are believed to disproportionately impact lower income groups:over 90 per cent of road traffic deaths and injuries occur in low- and middle-income countries128 withvulnerable road users (pedestrians, motorcyclists and cyclists) accounting for the majority of thefatalities.129 Direct costs of traffic accidents include any related expenses, including medical costs, costs forvehicle repairs and administrative costs, and indirect costs include items, such as the loss of quality of life(including pain, grief and suffering) and the loss of productivity. In total, road accidents are estimated tocost most developing countries one to three per cent of their gross national product.130

A number of factors, including geometric features of roads, vehicle design, road user and driverbehaviour, traffic and pavement characteristics, and environmental aspects, are thought to contributetowards the increase in road accidents.131 In addition, there tends to be a link between poor road conditionsand the number of road crashes (i.e. the type of road, whether it is an urban or rural location (which willoften have an impact on road standards and maintenance), and the type of terrain). Roads that are notcapable of handling levels of traffic volume, are inadequate for the terrain, are poorly maintained and havepoor visibility, can all contribute to road fatalities and injuries. In a recent survey, WHO concluded thatpoor road and land-use planning in South-East Asia often leads to a deadly mix of high-speed throughtraffic, heavy commercial vehicles, motorized two-wheelers, pedestrians and bicyclists on developing-country roads. Adequate accommodation for vulnerable road users, such as sidewalks and bicycle lanes, israre.132

The WHO Global Report on Road Safety also highlighted significant concerns regarding road userbehaviour with respect to seat belt wearing, with many developing nations in particular having laws that donot apply to all car occupants. Whilst seat belt laws are widespread, the rate of compulsory seat belt lawsdrops in alignment with socio-economic indicators; 76 per cent of high income nations require all occupantsto wear seat belts, with the rate lowering to 54 per cent in middle income countries and 38 per cent in lowincome countries.133 Enforcement of seat belt laws is also weak in many nations.

1. Road fatalities

Figure VII-1 shows that road fatality rates, measured as the number of deaths per 100,000population, vary widely across the region. Most developing countries in the ESCAP region have higherfatality rates than OECD countries. According to the last Global Status Report by the WHO, published in

127 World Health Organization, Saving Millions of Lives, WHO, Geneva, 2011, downloaded from WHO website http://www.who.int 26 October 2011.128 World Health Organization, United Nations Road Safety Collaboration: Key Messages, viewed on WHO website http://www.who.int 26 October 2011.129 World Health Organization, Global Status Report on Road on Road Safety: Time for Action , WHO, Geneva, 2009.130 World Heath Organization, United Nations Road Safety Collaboration: Key Messages, viewed on WHO website http://www.who.int 26 October 2011.131 Chakraborty, S., and Roy, S.K. (2005) Traffic Accident Characteristics of Kolkata, Transport and Communications Bulletinfor Asia and the Pacific, No. 74, 2005.132 WHO (2009) Regional Report on Status of Road Safety: the South-East Asia Region – A call for policy direction.133 WHO (2009) Global Status Report on Road Safety – Time for Action.


2009 with data from 2007, the highest rate of 45 per 100,000 was for the Cook Islands. However, as this issomewhat anomalous (most small Pacific Island countries have low fatality rates due to limited motorvehicle travel) and the number of fatalities involved is small, this is likely to be a statistical aberration. Ofthe larger countries, Afghanistan has the highest fatality rate, at nearly 40 deaths per 100,000 inhabitants.Eight other countries (Cambodia, Islamic Republic of Iran, Kazakhstan, Pakistan, Russian Federation,Malaysia, Myanmar and Kyrgyzstan) recorded rates in excess of 20 per 100,000 inhabitants.

However, it has been argued that “road fatality rates per million inhabitants are an ambiguousindicator of road safety since the number of accidents depends to a great extent on the number of vehicles ineach country”.134 Figure VII-2 therefore compares fatality rates per 10,000 registered vehicles.

134 OECD, OECD Factbook 2006, OECD Paris 2007.

Source: Based on data from Statistical Annex, World Health Organization, Global Status Report on Road on Road Safety 2009. Forconsistency, the number of fatalities is based on the point estimates provided in this report, not on reported fatalities. This differs from theapproach taken in the 2009 Review of Developments of Transport in Asia and the Pacific.

Figure VII-1. Fatality rate per 100,000 population in selected ESCAP countries, 2007

Marshall Islands

Singapore

Japan

Tonga

Fiji

Australia

Tuvalu

Uzbekistan

Nauru

New Zealand

Bangladesh

Republic of Korea

Samoa

Azerbaijan

Turkey

Sri Lanka

Brunei Darussalam

Armenia

Tajikistan

Papua New Guinea


Bhutan

Palau

Nepal

Timor-Leste�

Viet Nam

Indonesia

China

Georgia

India

Solomon Islands

Maldives


Vanuatu

Turmenistan

Mongolia

Thailand

Philippines

Kyrgyzstan

Myanmar

Malaysia

Russian Federation

Pakistan

Kazakhstan


Cambodia

Afghanistan

Cook Islands

0 5 10 15 20 25 30 35 40 45 50

Road Fatalities per 100,000 population


Adjusting for the level of motorization significantly improves the relative safety performance ofsome upper middle income countries with high levels of car ownership, such as Kazakhstan and Malaysia.Conversely, the relative safety performance of low income countries – most notably Bangladesh – is worseon this indicator. In terms of fatalities per 10,000 vehicles, the low income countries Cambodia andBangladesh have the highest fatality rates in the ESCAP region, while the rates for high income countriesare, without exception, very much lower: for example, in Cambodia, there were 337 fatalities per 10,000vehicles in 2007; in Japan, there were 0.7.

Figure VII-2 suggests that, once the level of motorization is taken into account, there is strong andsystematic relationship between poverty and road fatalities. This is confirmed by the analysis presented inFigure VII-3. This figure charts, on a dual logarithmic scale, the relationship between road deaths per10,000 motor vehicles and per capita income for a cross-section of ESCAP countries.

Source: Based on data from Statistical Annex, World Health Organization, Global Status Report on Road on Road Safety 2009. Forconsistency, the number of fatalities is based on the point estimates provided in this report, not on reported fatalities. This differs from theapproach taken in the 2009 review.

Figure VII-2. Fatality rate per 10,000 vehicles in selected ESCAP countries, 2007

Japan

Australia

New Zealand

Brunei Darussalam

Singapore

Republic of Korea

Malaysia

Marshall Islands

Thailand

Palau

Cook Islands

Indonesia

Viet Nam

Fiji

Turkey

Sri Lanka

Russian Federation

Tuvalu

Armenia

Georgia

Azerbaijan

Turkmenistan


Samoa

Kazakhstan

China

Maldives


Bhutan

India

Vanuatu

Mongolia

Tonga

Philippines

Tajikistan


Kyrgyzstan

Nepal

Timor-Leste�

Pakistan

Solomon Islands

Myanmar

Afghanistan

Papua New Guinea

Bangladesh

Cambodia

0 50 100 150 200 250 300 350 400

Road Fatalities per 10,000 motor vehicles


The large differences between fatality rates in countries in the Asia Pacific region, and systematicrelationship between these rates and income level, indicates there is considerable potential for concertedaction to significantly reduce the levels of road traffic deaths, injuries and property damage – but also that,to realize this potential, significant resources will need to be directed to the less developed countries of theregion.

The nature of road safety issues in the region also varies between developing and developedcountries (see Figure VII-4). The majority of people killed in road accidents in Bangladesh are non-motorizedroad users: pedestrians and cyclists. The same appears to be the case in India, although in this case thepicture is somewhat clouded by the large proportion of road crash casualties not classified by road usertype. Non-motorized road users also comprise more than 40 per cent of fatalities in Tajikistan, Tonga,Kyrgyzstan, China, Islamic Republic of Iran, Myanmar, and China. Perhaps more surprisingly, since highlevels of pedestrian deaths are often associated with developing countries, non-motorized road users alsocomprise more than 40 per cent of all road fatalities in Japan and the Republic of Korea. Meanwhile, insome countries motor-cycle riders and passengers form a very high proportion of roads fatalities in somecountries, especially in South-East Asia: deaths in this category exceed 50 per cent of all fatalities inSingapore, Indonesia, Malaysia, Cambodia and Thailand.

The 2009 Country Status Reports provided by ESCAP member countries to the secretariat reflectedmixed progress in reducing road user fatalities between 2007 and 2009.135 Figure VII-5 shows that themajority of countries providing reports recorded reductions in road fatalities over this period. Progress wasparticularly impressive in Kazakhstan, which achieved a drop in fatalities close to 20 per cent per annum,and in Bhutan, Brunei Darussalam, the Russian Federation, Kyrgyzstan and Azerbaijan, fatalities werereduced by over 10 per cent per annum. Also noteworthy, given the low rates that they had already achievedin 2007, were the further reductions of over 5 per cent per year in Singapore and Japan. On the other hand,fatalities increased by over 10 per cent per year in Nepal, Georgia and Lao People’s Democratic Republic,and by over 5 per cent in Indonesia, Cambodia, Myanmar and India.

Figure VII-3. Relationship between road fatalities and per capita income,selected ESCAP countries, 2007

Source: Based on data from Statistical Annex, World Health Organization, Global Status Report on Road on Road Safety 2009.

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135 UNESCAP, Road Safety, paper prepared for Expert Group Meeting on Preparations for the Ministerial Conference onTransport, Bangkok, 14-15 July 2011 (TD/EGM.1/2011/9).



Figure VII-4. Road fatalities by road user class, selected ESCAP countries, 2007

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Figure VII-5. Change in road fatalities in selected ESCAP countries, 2007-2009

Source: Based on data from UNESCAP Road Safety, TD/EGM.1/2011/9. Data for Mongolia, Islamic Republic of Iran, Sri Lanka, Georgia andNepal is not available for 2009, so data for 2008 has been used.

Nepal

Georgia


Sri Lanka

India

Myanmar

Cambodia

Indonesia


Tajikistan

Malaysia

Republic of Korea

Mongolia

Thailand

Armenia

Japan

Viet Nam

Turkey

Singapore

Azerbaijan

Kyrgyzstan

Russian Federation

Brunei Darussalam

Bhutan

Kazakhstan

-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

Annual change 2007-2009 Annual change 2007-2008


To a significant extent, the increases are due to rapidly increasing motorization in these countries.Unfortunately, the data required to systematically assess the influence of increased motor vehicle ownershipand impact on the number of fatalities is not available for most countries. However, the rate of fatalities per10,000 motor vehicles fell in all six of the countries that provided data on movements in this ratio – in fourof these countries, the actual number of fatalities increased. This demonstrates that it is feasible fordeveloping countries in particular to achieve significant reductions in road fatalities in a short period oftime provided there is commitment and sustained effort by the national government and other road safetystakeholders.

2. International initiatives to improve road safety

The significant social and economic costs associated with traffic accidents have been recognized ina number of international initiatives. For some years now, ESCAP has worked to improve road safety in theregion. ESCAP has also supported the creation of the Global Road Safety Partnership (GRSP) movementand encourages a multilateral approach towards road safety represented in its work in partnership withAsian Development Bank, World Bank, GRSP, International Road Assessment Programme, InternationalRoad Federation and International Road Transport Union. In 2006, ESCAP transport ministers attended theMinisterial Conference of Transport in Busan, the Republic of Korea. Ministers at the conference conveyedprofound concern for the rapid increase in deaths and injuries resulting from road traffic accidents, and theconference adopted the Ministerial Declaration on Improving Road Safety in Asia and the Pacific bytransport ministers on 11 November 2006 (The Busan Declaration).

Calls for action at the global level were stepped up during the First Global Ministerial Conferenceon Road Safety, hosted by the Russian Federation in 2009. The Conference led to the adoption of theMoscow Declaration which invited the UN General Assembly to declare a Decade of Action for RoadSafety from 2011 to 2020. Subsequently, the General Assembly of the United Nations endorsed the proposalof Moscow Declaration and proclaimed the period 2011-2020 as the Decade of Action for Road Safety(Box VII-1). The Decade of Action was proclaimed with a goal to stabilize and then reduce the forecastlevel of road traffic fatalities around the world by increasing road safety activities conducted at the national,regional and global levels.

Box VII-1. The Global Plan for the Decade of Action for Road Safety 2011-2020

United Nations General Assembly Resolution 64/255 requested the World Health Organization and the UnitedNations regional commissions, in cooperation with the United Nations Road Safety Collaboration and otherstakeholders, to prepare a Global Plan for the Decade as a guiding document to support the implementation of itsobjectives. The Global Plan provides an overall framework for activities at the local, national, regional and globallevels.

The guiding principles of the Global Plan are those of a “safe system” approach. This approach aims todevelop a road transport system that is better able to accommodate human error and take into consideration thevulnerability of the human body. The goal of a “safe system” is to ensure that accidents do not result in fatality orserious human injury. Road users, vehicles and the road network are addressed in a holistic manner through a widerange of traditional and newer approaches, with a focus on five “pillars”: (a) building road safety managementcapacity, (b) providing safer roads and mobility, (c) ensuring vehicles are safer (d) inculcating safer behaviour inroad users, and (e) improving post-crash response.

Moving to a “safe system” approach requires the development and implementation of sustainable road safetystrategies and programmes, and the setting of ambitious yet feasible targets for the reduction of road fatalities duringthe Decade of Action for Road Safety. The Global Plan defines specific activities to be undertaken in support of eachof the five pillars, and suggests indicators that could be used to track progress in each area. At the national andregional levels, road safety management capacity, and data collection and monitoring systems need to bestrengthened and improved. Also important is the sharing of successes and lessons with other countries and theregion, and optimizing the value of existing resources whilst continuing to seek further funding for future road safetyprojects and endeavours.


In response to the General Assembly resolution and in accordance with the Global Plan for theDecade, ESCAP has developed a detailed set of goals targets and indicators for road safety improvement inthe Asia-Pacific region. The overall objective of the ESCAP road safety goals, targets and indicators for theDecade of Action for Road Safety is a 50 per cent reduction in fatalities and serious injuries on the roads ofAsia and the Pacific over the period 2011 to 2020.136 There are eight areas supporting the overall objective:

Making road safety a policy priority;

Making roads safer for vulnerable road users, including children, senior citizens, pedestrians,non-motorized vehicle users, motorcyclists, and persons with disabilities;

Making roads safer and reducing the severity of road crashes (“forgiving roads”);

Making vehicles safer and encourage responsible vehicle advertising;

Improving national and regional road safety systems, management enforcement;

Improving cooperation and fostering partnerships;

Developing the Asian Highway as a model of road safety; and

Providing effective education on road safety awareness to the public, young people anddrivers.

Across the eight areas, ESCAP has recommended a list of 25 targets and 36 indicators for membercountries to consider when planning and implementing their national road safety strategies and inevaluating progress. The road safety goals, targets and indicators were presented at the ESCAP RegionalExpert Group Meeting on the Implementation of the Decade of Action for Road Safety, held in Bangkok inSeptember 2010 (see Table VII-1). The Meeting noted the UNESCAP road safety goals, targets andindicators for the Decade of Action with an overall objective of a 50 per cent reduction in fatalities andserious injuries on the roads of Asia and the Pacific over the period 2011-2020.137

136 The overall objective of a 50 per cent reduction in fatalities and serious injuries is comparable to the previous objective ofsaving 600,000 lives and preventing a commensurate number of serious injuries on Asia-Pacific roads between 2007 to 2015contained in the Ministerial Declaration on Improving Road Safety in Asia and the Pacific made in Busan, Republic of Korea, inNovember 2006.137 UNESCAP, Report of Report of the Regional Expert Group Meeting on Implementation of Decade of Action for Road Safety,2011-2020, 21-23 September 2010, Bangkok, Thailand, viewed on ESCAP website http://www.unescap.org, 27 October 2011.

Table VII-1. ESCAP Road Safety Goals, Targets and Indicators for the Decade of Action

Goals and Targets Indicators for monitoring achievements

Overall Objective: 50 per cent reduction in fatalities and serious injuries on the roads of Asia and the Pacific over theperiod 2011 to 2020

a) Reduce the fatality rates by 50 per cent from2011 to 2020.

1) Number of road fatalities (and fatality rates per 10,000 motorvehicles, per motor vehicle-km and per passenger-km).

2) Number of road crashes.

3) Number of serious road injuries (and injury rate per 10,000 motorvehicles, and per motor vehicle-km).

b) Reduce the rates of serious road injuries by50 per cent from 2011 to 2020.

Goal 1: Making road safety a policy priority

4) Information on existing national road safety policy, strategy, andplan of action.

5) Name of designated lead agency. Description of responsibilities oflocal, regional and national government organizations.

6) National road safety reports or impact evaluation reports ofgovernment programmes.

7) Amount of funding allocated to road safety programmes (public,private and donors) and research and development to create saferroad environment.

a) Create a road safety policy/strategy, designatea lead agency and implement a plan of action,by 2011.

b) Allocate sufficient financial and humanresources to improving road safety.


Table VII-1. (continued)


Goal 2: Making roads safer for vulnerable road users, including children, senior citizens, pedestrians, non-motorizedvehicle users, motorcyclists, and persons with disabilities

a) Reduce by one third the pedestrian death rate inroad crashes (or reduce it to less than 1 per10,000 motor vehicles).

8) Numbers of pedestrian deaths or pedestrian deaths per 10,000motor vehicles.

9) Number of new safe crossings or improvement constructed orplanned.

10) Number of motorcyclist deaths and motorcyclist death per 10,000motorcycles.

11) Existing law or administrative rule for mandatory use of helmetsand specifying minimum helmet quality standards. Information onhelmet use (percentage).

12) Number of child fatality in road crashes.

13) Existing law or administrative rule on measures for child safety incars (child restraints) and on motorcycles (child helmets).

14) Use of child seat restraints and child helmets (percentage).

15) Existing or planned education programmes on road safety inschool, starting class and its coverage.

b) Increase the number of safe crossings forpedestrians (e.g., with subway, overheadcrossings or traffic signals).

c) Make the wearing of helmets the norm andensure minimum helmet quality, in order toreduce the motorcyclist death rate by one third(or reduce it to below the average motorcyclistdeath rate of the ESCAP region).

d) Ensure minimum child safety measures, inorder to reduce the child death rate by one third(or reduce it to less than 0.01 per 10,000 motorvehicles).

e) Equip all school children with basic road safetyknowledge.

Goal 3: Making roads safer and reducing the severity of road crashes (“forgiving roads”)

16) Number of, and information about, road safety audits carried outfor new road construction and major improvements.

17) Number of improvement programmes carried out to make roads“forgiving” (e.g., blackspot, removing or cushioning roadsideobstacles).

18) Existing length of pedestrian and bicycle tracks in kilometres per100,000 people or per 10,000 km of roads (along highways andcity roads). Programme to construct pedestrian and bicycle tracks.

a) Integrate road safety audit in all stages of roaddevelopment starting at the design stage, carryout necessary improvement works, and improvehazardous locations.

b) Increase separate/secure road space forpedestrians and cyclists in urban and suburbanareas (where space permits).

Goal 4: Making vehicles safer and encourage responsible vehicle advertising

a) Make regular inspection of road vehiclesmandatory and ensure enforcement of inspection(starting in urban areas).

19) Existing law or administrative rule on vehicle inspection,frequency of inspection (annual), number of vehicle inspectionfacilities and organizations.

20) Existing law and regulation specifying vehicle safety standardsand implementation.

b) Ensure safety requirements for new vehicles tobe in line with international standards.

Goal 5: Improving national and regional road safety systems, management and enforcement

21) Information on existing road safety database and responsibleorganizations.

22) Information on law or administrative rule on compliance withhelmet wearing (including percentage use).

23) Information on law or administrative rule on compliance withseat-belt use, use of mobile phone (including percentage use).

24) Information on law or administrative rule on compliance with“drinking and driving” and speed limits.

25) Existing alcohol level testing rules, types of tests and alcohollimits used and allowed for prosecution.

a) Implement a national (computerized) databasethat provides information on road crashes.

b) Introduction of laws and regulation to ensurecompliance with mandatory helmet, seat-beltuse, drinking and driving, use of mobile phoneand speed limits.

c) Allow alcohol tests for prosecution (eitherbreathalyzer and/or behavioural tests).




Goal 5: Improving national and regional road safety systems, management and enforcement (continued)

d) Make it the norm to keep motorcycle front-lights on at all times.

e) Increase coverage of emergency assistancesystems for road victims, to cover at least allurban areas and trunk roads.

26) Information on existing law or administrative rule on keepingmotorcycle headlight on while driving.

27) Kilometres of road (by type) on which emergency services areprovided.

28) Average emergency response time.

29) Number of emergency service centres per length of highways(except city roads).

Goal 6: Improving cooperation and fostering partnerships

a) Encourage and recognize private-sectorsponsored initiatives.

30) Number of major partnerships in the area of road safety, funding(private sector, public-private initiatives).

31) Number of major partnerships with NGO, scope and funding.b) Create new and deepen existing partnershipswith non-governmental organizations.

Goal 7: Developing the Asian Highway as a model of road safety

a) Reduce the total number of fatalities and roadcrashes on the Asian Highway.

32) Total number of road fatalities and road crashes on the AsianHighway in each country per year.

33) Number of fatalities per billion vehicle-kilometres for each AsianHighway segment per year.

34) Amount of resources allocated to safety-related works for theAsian Highway segments from government and donors.

35) Information on road safety assessment and rating programme forthe Asian Highway.

b) Reduce the number of fatalities on all AsianHighway segments to below 100 per billionvehicle-kilometres.

c) Increase resource allocation for road safety-related measures along the Asian Highway.

d) Improve Asian Highway road segments to beforgiving to road users if a crash occurs.Demonstrate best practice.

Goal 8: Providing effective education on road safety awareness to the public, young people and drivers

a) Carry out targeted awareness campaigns andtraining programmes

36) Information on number of national road safety awarenesscampaigns and training programmes carried out.

Source: UNESCAP, Report of Report of the Regional Expert Group Meeting on Implementation of Decade of Action for RoadSafety, 2011-2020, 21-23 September 2010.

3. National road safety targets and initiatives

Many ESCAP member countries have developed national road safety plans with measurable goals,targets and indicators. Recent examples include Thailand, which aims to reduce the number of deathsresulting from road crashes by half by 2020;138 Cambodia, whose draft National Road Safety Action Planincludes the goal of reducing the number of road fatalities and fatality rate by 50 per cent by 2020;139 andAustralia, whose National Road Safety Strategy for 2011-2020 includes the target of a 30 per cent reductionin deaths and serious injuries by 2020.140 Table VII-2 provides an overview of the types of measures beingimplemented across the region.

138 Thailand determined to achieve the goals of the Decade of Action for Road Safety 2011-2020, viewed on website of UnitedNations Road Safety Collaboration, from http://www.who.int/roadsafety/en, 26 October 2011.139 Boran Pen, Cambodia National Road Safety Action Plan 2011-2020, presentation to Regional Expert Group Meeting onImplementation of Decade of Action for Road Safety, 2011-2020, 21-23 September 2010, downloaded from UNESCAP website,http://www.unescap.org, 26 October 2011.140 Australian Transport Council, National Road Safety Strategy 2011-2020, 28 May 2011, downloaded from website ofAustralian Transport Council, http://www.atcouncil.gov.au 26 October 2011.


Table VII-3 lists more specific commitments aimed at the improvement of road safety from a cross-section of ESCAP countries.

Table VII-2. Overview of types of measures being implemented by ESCAP member states

Type of measure Countries

Road safety audits Afghanistan, Armenia, Azerbaijan, Georgia, India, Kazakhstan, Kyrgyzstan, LaoPeople’s Democratic Republic, Malaysia, Mongolia, Nepal, Philippines, Republic ofKorea, Russian Federation, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-Leste,Turkey, Turkmenistan, Uzbekistan and Viet Nam.

Hazardous locations improvement Bhutan, Cambodia, Japan, Kazakhstan, Kyrgyzstan, Malaysia, Nepal, Philippines,programmes Republic of Korea, Russian Federation, Singapore, Sri Lanka, Tajikistan, Thailand,

Turkey and Viet Nam.

Phasing out older vehicles which are Bhutan, Cambodia, India, Indonesia, Kazakhstan, Kyrgyzstan, Malaysia, Mongolia,no longer roadworthy through regular Nepal, Philippines, Russian Federation, Singapore, Sri Lanka, Tajikistan, Thailand,mandatory vehicle inspections Timor-Leste, Turkey and Viet Nam.

Legislation on seatbelt use in cars Armenia, Azerbaijan, Bhutan, Cambodia, China, Georgia, India, Indonesia, IslamicRepublic of Iran, Japan, Kazakhstan, Kyrgyzstan, Lao People’s DemocraticRepublic, Malaysia, Nepal, Pakistan, Philippines, Republic of Korea, RussianFederation, Singapore, Tajikistan, Thailand, Timor-Leste, Turkey, Turkmenistan,Uzbekistan and Viet Nam.

Legislation on helmet use by Armenia, Azerbaijan, Bangladesh, Bhutan, Cambodia, China, Georgia, India,motorcyclists Indonesia, Japan, Kazakhstan, Kyrgyzstan, Lao People’s Democratic Republic,

Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Republic of Korea,Russian Federation, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-Leste, Turkey,Turkmenistan, Uzbekistan and Viet Nam.

Legislation on drink-driving Afghanistan, Armenia, Azerbaijan, Bangladesh, Bhutan, Cambodia, China, Georgia,India, Islamic Republic of Iran, Japan, Kazakhstan, Kyrgyzstan, Lao People’sDemocratic Republic, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines,Republic of Korea, Russian Federation, Singapore, Sri Lanka, Tajikistan, Thailand,Timor-Leste, Turkey, Turkmenistan, Uzbekistan and Viet Nam.

Source: Country reports presented at various ESCAP meetings.

Table VII-3. Recent Road Safety Initiatives in ESCAP member States141

Country Recent Road Safety Initiatives in 2009-2010

Armenia Government launched a plan to include a compulsory subject on road safety in the schoolcurriculum for classes 1 to 11.

Bangladesh The Bangladesh Road Transport Authority has launched a road safety publicity programme throughnewspapers, radio, television, posters and leaflets. It also arranged 81 training programmes for8,500 professional drivers to improve their driving skills and road awareness.

Brunei Darussalam The Government’s draft road safety action plan for 2011-2020 includes a proposal to establisha centre for road safety.

Cambodia A survey on seat-belt wearing in Phnom Penh and surrounding areas was conducted. It found thatthe average wearing rate among drivers and front-seat passengers was 55 per cent.

Indonesia A dedicated website with national road safety and impact evaluation reports was established(http://hubdat.web.id/). The rollout of a national accident investigation and road safety audittraining programme continued in 9 provinces involving 270 participants.

141 As reported in 2009 Country Status Reports and at the Regional Expert Group Meeting on Implementation of Decade ofAction for Road Safety (Bangkok, 21-23 September 2010). Country papers and presentations are prepared and presented by thefocal points from member countries and should not necessary be considered as reflecting the views and carrying the endorsementof the United Nations.


As can be seen from the preceding paragraphs, the majority of ESCAP countries have reasonablycomprehensive frameworks for the regulation of safe driving (and riding) behaviour. Four of the mostcritical issues covered by legislation are drink driving; the wearing of helmets (by motor cycle riders andpassengers); speed limits; and the wearing of seat belts.

Alcohol

Most ESCAP countries now have national legislation defining the maximum blood alcohol content(BAC) at which it is legal to drive. From a cross-section of 48 countries for which information is providedin the WHO’s Global Status Report on Road Safety, eight countries – mainly countries in which theconsumption of alcohol is generally prohibited – the limit is set at zero.142 Meanwhile, 25 of the48 countries have a legislated national BAC equal to or lower than the ‘typical’ Western European level of0.05 per cent, and 37 of the 48 countries set this level at or below the level permitted in the United States.Only one country set a blood alcohol content above this level. In ten countries there are no national limits,because either there is no legislation on this issue (one country); the limits are set by sub-nationalgovernments and are not uniform (two countries);143 or driving under the influence of alcohol is definedwith reference to something other than blood alcohol content (seven countries).

Kazakhstan The Young Inspectors’ Movement programme targeted at young children was implemented in85 per cent of public schools. The Government also plans to implement a computerizedinformation system to record road accident information.

Kyrgyzstan The Government introduced car parking rules and traffic discipline in the Chuy region of Bishkek.

Malaysia Remedial measures were carried out on 30 black spot hazardous areas.

Nepal The Government has introduced traffic safety in the curriculum of school classes I to IV as part ofa subject entitled “Social studies and creative arts”.

Philippines A road safety awareness project entitled “Use of Flash Cards as Instructional Materials for Grade 5Students in Public Schools” which seeks to reduce road fatalities involving children is to belaunched following a six month pilot in the 2010-2011 school year.

Republic of Korea A historic Memorandum of Understanding between the Ministry of Land, Transport and MaritimeAffairs, and the Police was signed. This will enhance traffic safety in the Republic of Korea.

Russian Federation A dedicated website which contains comprehensive and regularly updated database andinformation on road safety issues was established (http://www.fcp-pbdd.ru/).

Sri Lanka The National Council for Road Safety has erected a road safety fund with US$ 100 million.One per cent of third party insurance premiums is being allocated to this fund.

Thailand The Government declared 2011-2020 as Thailand’s Decade of Action for Road Safety with a newroad safety target of a 50 per cent decrease in road deaths per 100,000.

Timor-Leste The Government has approved a ministerial diploma concerning the enforcement of laws regardingthe use of motorcycle helmets.

Turkey Publicity campaigns were run in 2009 and 2010 to inform and impact the behaviour of road usersand raise the general public’s awareness of road safety.

Viet Nam The Government introduced strong penalties for drink-driving as well as new law requiringchildren above the age of six to wear motorcycle helmets properly.

Source: UNESCAP, Report of the Regional Expert Group Meeting on Implementation of Decade of Action for Road Safety,2011-2020, 21-23 September 2010.


Country Recent Road Safety Initiatives in 2009-2010

142 Based on data from Statistical Annex, World Health Organization, Global Status Report on Road on Road Safety 2009. Forthe Philippines, BAC limit (0.05) was taken from website of International Centre for Alcohol Policies, http://www.icap.org,viewed 27 October 2010.143 In some countries, such as Australia, limits are formally set by sub-national governments but legislation is coordinated to givea common national standard. In the analysis above, these countries have been regarded as having national BAC legislation.


Helmets

In 41 of the 48 countries for which data is available, there is now national (or quasi-national)legislation requiring the wearing of motor-cycle helmets. In all but one of these cases, the requirement isthat helmets are worn by both the rider and his or her passengers. There is, however, considerable variabilitybetween countries in the conditions under which a rider or passenger is exempt from this requirement. Of theseven countries in which there is no national legislation, the issue is dealt with at a sub-national level intwo, while four of the remaining five countries are small island states.144

In many ESCAP countries, anecdotal information also suggests that the helmets being sold orproduced are of a substandard quality, thereby giving a false sense of security to riders even when they dowear them. Legislation on the need to wear helmets usually specify that helmets must be certified bya government authority or relevant safety standard-setting authority. Unfortunately, substandard helmetsmay feature fake certification stickers. In the Philippines, the Motorcycle Helmet Act of 2009 requires theseller and/or dealer of new motorcycles to make new motorcycle helmets bearing the Philippine Standard(PS) mark or Import Commodity Clearance (ICC) of the Bureau of Product Standards (BPS) available asa purchasing option for new buyers.145

Speed

In ESCAP countries, the most common general urban speed limits are 40 km/hr, 50 km/hr and60 km/hr, with almost equal numbers of countries in each group (11, 12 and 13 respectively). Pacific islandcountries tend to dominate the group with 40 km/hr speed limit, while in the 60 km/hr speed limitgroup, North and Central Asian countries are over-represented. There is greater variation in generallyapplicable speed limits on rural roads. Approximately one-quarter of countries set the general limit at orbelow 50 km/hr; this group is dominated by small island countries and countries with very limited sealedroad networks. At the other end of the scale, approximately one-quarter of countries have limits in excess of80 km/hr, with three countries reporting no generally applicable limit.

Seat belts

Compulsory wearing of seat belts is the legislative area in which the current situation in theAsia-Pacific lies furthest away from best road safety practice. Only a little over one-third of countries havelegislation that requires all occupants to wear seatbelts. One-quarter of countries do not have nationalcompulsory seatbelt legislation, while one-third limit the requirement to wear a belt to occupants of thefront seats.

Enforcement

To have appropriate road safety legislation is one thing; to ensure that it is effectively enforced isanother. As well as compiling hard data on legislative regimes in the Asia-Pacific, the WHO has useda survey approach to gain some insight into how effectively different regulations are enforced in eachcountry. Figure VII-6 summarises the results from this survey. From a possible score of 10 for perfectlyeffective enforcements, the average score for enforcement of helmet laws was 6.4; this was the highestrating for any of the four legislative components reported above. The weakest enforcement (5.28 onaverage) was in the area in which the legislation itself is the weakest – compulsory wearing of seatbelts.This is also the area in which the variability of enforcement across the region was greatest (this is shown bythe fact the standard deviation of scores for enforcement of seatbelt laws is higher than the correspondingstatistic for the other aspects of road safety legislation).

144 Based on the Statistical Annex to World Health Organization, Global Status Report on Road on Road Safety 2009.145 http://wiki.lawcenter.ph/index.php?title=Motorcycle_Helmet_Act_of_2009


Figure VII-6. Mean and variability of enforcement effectiveness,selected ESCAP countries, 2009


0

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2

3

4

5

6

7

Alcohol Helmets Speed Limits Seatbelts

Average Score (scale of 0-10) Standard Deviation of Valid Scores

146 European Environment Agency, Understanding climate change — SOER 2010 thematic assessment, EEA, Copenhagen 2010.147 The Copenhagen Diagnosis, 2009: Updating the World on the Latest Climate Science. I. Allison, N.L. Bindoff, R.A.Bindschadler, et al. The University of New South Wales Climate Change Research Centre (CCRC), Sydney, Australia, viewed athttp://www.copenhagendiagnosis.com/on 9 December 2009.148 European Environment Agency, Understanding climate change — SOER 2010 thematic assessment, EEA, Copenhagen 2010.149 The Copenhagen Diagnosis, 2009: Updating the World on the Latest Climate Science. I. Allison, N.L. Bindoff, R.A.Bindschadler, et al. The University of New South Wales Climate Change Research Centre (CCRC), Sydney, Australia, viewed athttp://www.copenhagendiagnosis.com/on 9 December 2009.

B. Sustainable Transport Development

1. The impact of transport activities on the environment

Human activities are increasingly changing the composition and properties of the earth’satmosphere. Most significantly, the concentration of carbon dioxide (CO

2) in the atmosphere has increased

by 38 per cent over the levels of the pre-industrialised era146 to a level higher than at any time in the past800,000 years.147 Moreover, the rate of increase in the concentration of CO

2 is accelerating. Measurement

records from the US National Oceanic and Atmospheric Administration research station in HawaiiMoreover show an increase of over 22 per cent in atmospheric CO

2 over the last fifty years. During the

decade 1960-1970, the average annual rate of increase in atmospheric CO2 was 0.27 per cent. Between

2000 and 2010, the average annual rate of increase was 0.54 per cent.

There has also been a rise in the atmospheric concentrations of other significant greenhouse gases:“the CO

2 equivalent concentration of the 6GHG is – CO

2, CH

4 , N

2O, hydrofluorocarbons (HFC),

perfluorocarbons (PFC) and sulphite hexafluoride (SF6 – included in the Kyoto protocol reached 438 ppm

CO2-equivalent in 2008, an increase of 160 space ppm from the preindustrial level.”148 Together, these

gases build up in the earth’s atmosphere, and it is generally accepted that this build-up has led to thetrapping of more heat from sunlight than would otherwise be the case. The additional heat in the earth’satmosphere manifests as global warming, which is strongly related to climate change and sea level rise. Forexample, extreme weather events such as heatwaves, heavy rain, drought and tropical cyclones are allforecast to increase in intensity and frequency.149 These global environmental impacts pose obvious threats


to low-lying oceanic states in the ESCAP region.150 But they also have very significant implications formajor continental economies: the Maplecroft Climate Change Vulnerability Index includes five major Asianeconomies – Bangladesh, India, Philippines, Viet Nam and Pakistan – in its list of the 16 countriesclassified as at ‘extreme risk’ from climate change.151

In 2005, it was estimated that approximately 70 per cent of anthropogenic greenhouse gasemissions were due to energy consumption, while transport-related emissions accounted for 21 per cent ofenergy-related emissions. The majority of these emissions are CO

2, though transport also contributes to

global N2O and methane emissions. Motor vehicle air conditioners are major contributors of HFCs. As

shown in figure VII-7, it is estimated that transport activity produces approximately 15 per cent of totalanthropogenic greenhouse gas emissions. Road transport accounts for three-quarters of transport-relatedgreenhouse gas emissions; aviation accounts for approximately one-eighth, and the rest is emitted by railand shipping.152

One of the main factors driving the growth of transport-related GHG emissions is rapidurbanization and the increase in the number of motor vehicles used, particularly for passenger transport incities. In addition to contributing to climate change, urban air pollution also causes the greatest damage tohealth and loss of welfare from environmental causes in Asian countries. Figure VII-8 show clearly thaturban air pollution is principally a problem that afflicts developing countries. Despite high levels ofurbanization and motorization, few if any cities in Western Europe, North America or Japan have PM

10(particulate matter of less than 10 micrometres diameter) concentrations in excess of 30 µg/m3. By contrast,the majority of major cities in developing ESCAP member states have concentrations above this level.

150 See, for instance, UNDP, Climate change threatens human security in the Pacific Islands, August 2009, viewed on UNDPNewsroom website, http://content.undp.org/go/newsroom, 18 October 2011.151 Maplecroft, Big economies of the future – Bangladesh, India, Philippines, Viet Nam and Pakistan – most at risk from climatechange, 20 October 2010, viewed on Maplecroft website, http://maplecroft.com, 18 October 2011.152 International Transport Forum, Reducing Transport GHG Emissions, Trends and Data 2010, OECD/ITF 2010.

Figure VII-7. Sources of global greenhouse gas emissions in 2005

Source: International Transport Forum, Reducing Transport GHG Emissions, Trends and Data 2010, OECD/ITF 2010.

�


The air quality in selected Asian cities over the period 1993-2009 is presented below inFigure VII-9 below. On average, NO

2 levels were fairly low even at the start of the period, and there has

been a modest decline over the period. By the end of the period, the average across the 243 cities in thesample was below the World Health Organization (WHO) standard, but in 63 cities in the regionexperiences levels of NO

2 pollution that exceeded the standard.153 Similarly, while there was a significant

improvement in SO2 levels over the observation period, in 51 of the 213 cities for which 2008 data is

available, average daily concentrations of SO2 levels exceeded the World Health Organization (WHO)

standard.

However, the major air pollution challenge facing the cities of the region is the reduction ofparticulate emissions. Although there was some improvement over the period 1993 to 2001, the averageconcentration of particulate matters has subsequently increased. By 2008, much of the modest gain that hadbeen achieved in the first half of period has been reversed, and the average level across the sampleapproaching 90 µg/m3 – this is four-and-a-half times the WHO Air Quality Guidelines (20 µg/m3) and wellin excess of even the WHO Interim Target 1 of 70 µg/m3.154 CAI-Asia reports two cities with annualaverage PM

10 concentrations of above 250 µg/m3, with a further six cities with particulate pollution at or

about that level. In total, 10 per cent of all the cities in the CAI-Asia sample have annual average PM10

concentrations above 200 µg/m3 – ten times the level recommended by the WHO.155 This is a serious healthconcern: outdoor air pollution, particularly due to transport emissions, therefore has the potential tosignificantly affect human health and mortality. The WHO has estimated that, worldwide, the annualnumber of premature deaths caused by urban air pollution is in excess of 1 million per year.156

Figure VII-8. Geographical distribution of urban air pollution

Source: World Health Organization, WHO website, http://www.who.int, accessed 18 October 2011.

153 Clean Air Initiative for Asian Cities Center, Air quality in Asia: Status and Trends, 2010 Edition, Pasig City, Philippines. Notethat the WHO standard is set as the average over a 24-hour period, rather than an annual average.154 The WHO notes that the Interim Target 1 levers ‘are associated with about a 15 per cent higher long-term mortality riskrelative to the AQG level’. (WHO, WHO Air Quality Guidelines for particulate matter, ozone, nitrogen dioxide and sulphurdioxide: global update 2005 – summary of risk assessment, WHO Press, Geneva).155 Clean Air Initiative for Asian Cities Center, op cit.156 World Health Organization, Global health risks: Mortality and burden of disease attributable to selected major risks, WHO,Geneva, 2009.


2. Policies to address the dual challenges of climate change and air pollution

The transport sector, like other economic sectors, is expected to play a part in the emissionsabatement challenge. However, unlike other sectors such as energy production and distribution which aremore geographically concentrated, transport emissions come from a huge number of individual, privatelyowned vehicles, and therefore pose an enormous challenge for policy-makers. For example, with thecoming into force of the Kyoto Protocol in 2005, many of the 37 major industrial countries and members ofthe European Community which were bound by the agreement introduced various measures to reduce theirgreenhouse gas emissions, including measures to reduce emissions from transport.157 However, the variousmarket-based tools offered under the Kyoto Protocol, namely emissions trading – known as “the carbonmarket”, the Clean Development Mechanism (CDM), and Joint Implementation (JI) project have not beenwidely utilized by governments to address emissions from the transport sector, partly because the firstmethodology for transport projects under the CDM was only approved by the Executive Board of theUnited Nations Clean Development Mechanism in 2006.

The commitments made under the Kyoto Protocol extend only to 2012. It was widely hoped thata new agreement containing binding commitments from both developed and developing countries would beachieved at the 16th “Conference of the Parties” held in Copenhagen in December 2009, but the Conferencedid not produce an enforceable agreement on greenhouse gas targets. It did, however, result in theCopenhagen Accord, which articulated a number of important principles and provided a framework forvoluntary commitments to targets for, and/or programmes for the reduction of, GHG emissions. These werefurther negotiated during the 17th meeting of the “Conference of the Parties” held in Cancun, Mexico in2010, where the Copenhagen Accord, which, one year earlier, had merely been “noted”, was formerlyadopted. By doing so they agreed to keep temperature increases below a global average of 2 degreesCelsius. This brought this aspiration, as well as the emission pledges of individual countries, into the formalUnited Nations process for the first time.

Figure VII-9. Air Quality in Asia: Average annual ambient AQ levels, 1993-2009

Source: Clean Air Initiative for Asian Cities, 2011. www.citiesact.org.

Note: Not all cities have reported data for PM10

, SO2 and NO

2 consistently from 1993 to 2009.

AQ = Air quality. µg/m3 = micrograms per cubic metre. Red line represents United States Environmental Protection Agency’s National AmbientAir Quality standards; purple line represents European Union Air Quality standards; blue line represents WHO’s air quality guidelines.

157 The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005.


The contribution that transport makes towards greenhouse gas emissions and other forms ofpollutants will continue to pose significant challenges for policy makers in the future. These challengesmust be addressed at every level of government. At the national and subnational levels, governments havea leading role to play, for example, by taking into consideration energy efficiency and pollution effectsof national transport planning; investing in “eco-efficient and socially inclusive” infrastructure, orinfrastructure that will “create more value with less impact”; and setting national legislation to minimize thenegative impacts of transport. Legislation to control environmental impacts of transport, however, has beenrelatively ineffective due to limited institutional capacity and weak enforcement: despite the fact that mostcountries in the ESCAP region now have clearly defined air quality standards, in many cases these fall shortof the latest WHO recommendations.

Table VII-4. Air Quality Standards – Selected ESCAP Economies (µg/m3)

EconomyPM

2.5PM

10SO

2NO

2O

3CO (’000) Pb

24-Hr Annual 24-Hr Annual 24-Hr Annual 8-Hr 1-Hr 8-Hr Annual

Afghanistan – – – – – – – – – –

Bangladesh 65 15 150 50 365 100 157 40 10 0.5

Bhutan – – – – – – – – – –

Cambodia – – – – 300 – – 40 20 –

China: Grade I – – 50 40 50 40 – 10 – 1.0

China: Grade II – – 150 100 150 80 – 10 – 1.0

China: Grade III – – 250 150 250 80 – 20 – 1.0

Hong Kong, China – – 180 55 350 80 – 30 10 –

India* 60 40 100 60 80 40 100 4 2 0.5

India** 60 40 100 60 80 30 100 4 2 0.5

Indonesia – – 150 – 365 100 – 30 – 1.0

Lao People’s Democratic – – – – – – – – – –Republic

Malaysia – – 150 50 105 – 120 35 10 –

Mongolia – – – – 30 – – – – –

Nepal – – 120 – 70 40 – – 10 0.5

Pakistan – – – – – – – – – –

Philippines – – 150 60 180 – 60 35 10 1.0

Republic of Korea – – 100 50 131 56 118 28.6 10.3 0.5

Singapore 35 15 150 – 365 100 147 40 10 –

Sri Lanka 50 25 100 50 80 – – 30 10 –

Thailand – – 120 50 300 – 140 34 10 –

Viet Nam – – 150 50 125 40 120 30 10 0.5

WHO 25 10 50 20 20 40 100 30 10 0.5

Source: Clean Air Initiative for Asian Cities Center, Air quality in Asia: status and trends, 2010 Edition, Philippines.

Notes: Red indicates a less stringent standard than WHO recommended levels; green indicates equal to or stricter than WHO standardsChina: Grade I = applies to specially protected areas, such as natural conservation areas, scenic spots, and historical sites; China: Grade II =applies to residential areas, mixed commercial/residential areas, cultural, industrial, and rural areas; China: Grade III = special industrial areas;India* = NAAQS for Industrial, Residential, Rural and Other Areas; India** = NAAQS for Ecologically Sensitive Areas (notified by CentralGovernment); Pb = lead; PM

10 = Particles with aerodynamic particle diameters of 10 micrometers or less; PM

2.5= Particles with aerodynamic

particle diameters of 2.5 micrometers or less.

In order to meet the needs of the environment, policy makers have taken a combination of measureincluding: the development of new transport technologies, increased use of renewable energy sources,changes in economic geography and urban form, and new and more sophisticated forms of demandmanagement. The following sections focus on three separate but related policy measures: urban airpollution abatement policies; development of rapid mass transit systems and promotion of non-motorizedtransport in urban areas; and moving freight sustainably.


Urban air pollution abatement policies

One of the major policy instruments available to governments in reducing impact of transportactivities on air quality is the specification of vehicle emissions standards. As part of China’s Air QualityRegulations of 2010, for example, there are provisions to tighten the approval process for newly producedmotor vehicles, while the production, sale and registration of vehicles which fail minimum vehiclestandards is prohibited (see Box VII-2).

Box VII-2. New Clean Air Regulations in China

In 2010, China introduced new Air Quality Regulations. The regulations provide guidance to ‘all provinces,autonomous regions and municipalities directly under the Central Government, all ministries and commissions ofthe State Council, and all institutions directly under the State Council’ and set out the policies and strategies to beadopted by these bodies to improve air quality. The regulations include four strategies that specifically address thereduction of emissions from motor vehicles:

Strict implementation of national motor vehicle emission standards by tightening approval procedures fornewly produced motor vehicles, and prohibiting production, sale and registration of vehicles that fail to comply withthe national motor vehicle emission standards. The regulations also include expansion of the government subsidyprogramme for replacement of old vehicles, and call for ‘vigorous’ development of clean energy automobiles.

Improve the motor vehicle environmental management system through strengthening the inspection ofmotor vehicle compliance with emission standards, introduction of motor vehicle environmental labelling. Theregulations also call for consideration of tax policies that promote motor vehicle pollution prevention and control.

Accelerate the use of clean vehicle fuels through promotion of low-sulphur vehicle fuels, acceleration ofimprovements in oil refineries, and increasing the market supply of quality vehicle fuels. The regulation also foracceleration of the development of improved fuel quality standards.

Development of public transportation through improved infrastructure, prioritization of public transit intransportation strategy, speeding up the construction of dedicated bus and electric vehicle lanes (roads), andestablishing signal systems that give priority to public buses. The regulation also calls for improvement of theconditions for residents to travel on foot or by bicycle.

Source: China’s New Regional Air Quality Regulation – translated, viewed on the Network for Climate and Energy Information website(a World Resources Institute website) http://www.chinafaqs.org, 22 October 2011.

In Japan, the Ministry of Environment is jointly working with other ministries, is preparing totighten its already stringent tailpipe emissions requirements on NO

2, PM, sulphur oxides (SOx), and carbon

dioxide (CO2) for ethanol-fueled vehicles, and heavy-duty, diesel-powered vehicles. These new emissions

standards under development are likely to apply to vehicle manufacturers and importers by the end of2016.158 Meanwhile, the Russian Federation has recently proposed linking vehicle tax rates to the emissionsclass to which they belong – with higher rates imposed on higher polluting vehicles. The proposal wouldkeep the basic tax rate on vehicles meeting the Euro-4 equivalent emissions level, currently at 2.5 to 15.0roubles per unit of horsepower depending on the vehicle class. However, the basic tax rate for vehiclesmeeting the Euro-3 equivalent emissions would be raised by about 20 per cent, and for vehicles onlymeeting the Euro-2 equivalent standards the rate would increase by about 60 per cent.159

Another major policy instruments available to governments in reducing impact of transportactivities on air quality is the specification of fuel standards. Over the past few decades, there are two mainareas in which fuel standards have been tightened in an endeavour to improve air quality and, asa consequence, improve public health: the elimination of lead from fuels and reduction in sulphur levels.The presence of lead, even in relatively low concentrations, was found to have harmful health effects on thedevelopment of the central nervous system of foetuses and children, and many studies confirmed that motor

158 “Japan to toughen tailpipe emission standards”, ACFA News, Nov./Dec. 2010, Asian Clean Fuels Association.159 “Russia considering tax rate like to emission levels”, ACFA News, Nov./Dec. 2010, Asian Clean Fuels Association.


vehicle exhausts were a significant source of lead in the urban air.160 By 2000, 42 countries, mainly fromthe developed world, had banned the use of lead as an additive in transport fuels.161 Other countries havegradually followed suit, and leaded petrol is now in use in only three countries of the ESCAP region (seeTable VII-5).

Table VII-5. Fuel standards in selected ESCAP countries

EconomySulphur – max permitted

Unleaded petrolDiesel Petrol

Afghanistan Leaded 10,000

Armenia Unleaded 50 150

Australia Unleaded 10

Azerbaijan Unleaded 1,000 1,000

Bangladesh Unleaded 5,000

Bhutan Unleaded 500

Brunei Darussalam Unleaded 1,000

Cambodia Unleaded 1,500

China Unleaded 2,000 150

Fiji Unleaded 500

Georgia Unleaded 350 500

Hong Kong, China Unleaded 50 50

India Unleaded 500

Indonesia Unleaded 3,500 500

Islamic Republic of Iran Unleaded 5,000

Japan Unleaded 10

Kazakhstan Unleaded 2,000 500

Kiribati Unleaded

Kyrgyzstan Unleaded 2,000 1,000

Lao People’s Democratic Republic Unleaded 2,500

Macao, China Unleaded

Malaysia Unleaded 500 500

Maldives Unleaded

Marshall Islands Unleaded

Micronesia (Federated State of) Unleaded

Mongolia Unleaded 5,000

Myanmar Leaded 2,000

Nauru Unleaded

Nepal Unleaded 500

New Zealand Unleaded 10

Niue Unleaded

Pakistan Unleaded 5,000

Palau Unleaded

Papua New Guinea Unleaded

Philippines Unleaded 500 500

Republic of Korea Unleaded 50 10

Russian Federation Unleaded 350 150

Samoa Unleaded

Singapore Unleaded 50 500

Solomon Islands Unleaded

160 Swapan K. Biswas et al., Impact of Unleaded Gasoline Introduction on the Concentration of Lead in the Air of Dhaka,Bangladesh, Journal of the Air & Waste Management Association, 53: 1355-1362.161 Facts and Firsts about Lead, viewed on the website of the LEAD Group Inc., http://www.lead.org.au, 22 October 2911.


Policies to reduce sulphur levels in fuels have been less effective due to the popularity of dieselfuels. Sulphur oxides (SOx), especially when present as particulate sulphates (particulate matter may beformed in the atmosphere from SOx precursors) have local health and environmental effects, such asimpacts on respiratory health and asthma. SOx are gaseous emissions formed by the oxidation of fuelsulphur during the combustion process and depend entirely on the level of sulphur in the fuel. (NOx).Diesel fuels tend to be particularly high in sulphur, and diesel PM is of special concern because dieselexhaust has been associated with an increased risk of lung cancer. Additionally, SOx emissions result in theacidification of local environments, damaging buildings, and urban greenery (e.g. trees and shrubs). Finally,reducing sulphur to very low levels (50 ppm and less) not only reduces PM emissions but also enables theintroduction of emission control technologies that provide even greater emission reductions. Initiatives suchas the Partnership for Clean Fuels and Vehicles (PCFV) are promoting the reduction of sulphur in vehiclesfuels to 50 parts per million (ppm) or below worldwide, concurrent with clean vehicles and clean vehicletechnologies, with roadmaps and timelines developed regionally and nationally.162

At the urban (or local level), air pollution abatement strategies vary significantly between countriesand cities in terms of the focus of attention on the different types of pollutants, and their source. This isprimarily due to the need to target specific pollutants and emissions whilst working within the framework oflocal, national and regional policy frameworks. Table VII-6 shows some of the recent initiatives introducedby municipal authorities of the region.

3. Moving people sustainably

Governments in the region’s urban areas, particularly the large cities, have recently been investingin Mass Rapid Transit (MRT) projects. The term “Mass Rapid Transit” refers to “public transport modesoperating on fully or partially exclusive tracks (rail or road), away from street traffic and are thus subject tofull or at least considerable managerial control by the operator”.163 In a number of cases, these projects areundertaken with private sector participation.

Sri Lanka Unleaded 500

Tajikistan Unleaded 2,000 1,000

Thailand Unleaded 350 500

Timor-Leste Unleaded

Tonga Unleaded

Turkey Unleaded 10 10

Turkmenistan Unleaded 2,000 1,000

Tuvalu Unleaded

Uzbekistan Unleaded 5,000 1,000

Vanuatu Unleaded

Viet Nam Unleaded 500 500

Source: United Nations Environment Programme, Matrix indicating status of leaded gasoline by country, MiddleEast, North Africa & West Asia; Matrix indicating status of sulphur in diesel by country [Actual Sulphur Levels],Middle East, North Africa & West Asia; » Matrix indicating status of leaded gasoline by country, Asia-PacificMatrix indicating status of sulphur in diesel by country, Asia-Pacific; Fuel Quality Information Matrix, Central andEastern Europe. Viewed on UNEP website, http://www.unep.org, 22 October 2011.

Note: India and China have lower limits for some urban areas.


EconomySulphur – max permitted

Unleaded petrolDiesel Petrol

162 United Nations Environment Programme, Opening the door to cleaner vehicles in developing and transitional countries: therole of lower sulphur fuels, Report of the Sulphur Working Group of the Partnership for Clean Fuels and Vehicles (PCFV),UNEP, Nairobi, undated.163 World Bank Public Transport Modes & Services, viewed 11 August 2005, http://web.worldbank.org


Table VII-6. Measures to improve urban air quality

City Initiative

Delhi, India Delhi was the host city for the Commonwealth Games in 2010. Preparation for the Games served as anadditional stimulus to long term plans to improve air quality in the city. However, it has been pointedout that the air quality measures adopted during the Games were part of larger plan which includedupgrading fuel quality, shifting and closing of industries, development of new standards for PM

2.5,

benzene and ozone comparable to European Union’s standards and World Health Organization’sguidelines.164 The principal transport related measures adopted to improve air quality in Delhi are:

Expansion of public transport (in particular the Delhi Metro)

Phasing out of old public transport

Conversion of all buses to CNG mode

Introduction of unleaded petrol and catalytic converter

Reduce sulphur content in diesel

Adopting EURO standards for vehicle emissions.165

Jakarta, Indonesia In Jakarta, transport activities are the main source of hydrocarbon, carbon monoxide and nitrogenoxide emissions, and a significant contributor to particulate emissions, while industry is the mainsource of sulphur dioxide emissions. The Jakarta provincial government has responded through a seriesof measures, including the passage of a bylaw to prevent, control, monitor and mitigate air pollution.Subsequent implementing regulations provide for gas fuel use in public transport and governmentoperational vehicles; and vehicle emission testing and maintenance.166 In 2008, the Jakarta cityadministration introduced a Car Free Day on the last Sunday of every month along Jalan Sudirman andJalan Thamrin. The administration recently announced that the frequency of the Car Free Day will nowbe increased to once a week.167 The municipal public transport agency, TransJakarta, also developedthe first full BRT system in Asia.168

Istanbul, Turkey The Istanbul Metropolitan Municipality has adopted a multi-pronged Action Plan to reduce vehicleemissions as part of its broader strategy of air quality improvement. The Plan includes:

Raising awareness about the environmentally friendly driving techniques.

Using filter and catalytic converter systems for exhaust emission control on vehicles.

Reducing pollution through the use of environmentally acceptable vehicles and fuels in publictransportation.

Promoting alternative and more sustainable modes of transport to the cars.

Improving and popularizing marine transportation.

Promoting the implementation of Park and Ride applications.

Application of traffic congestion charge.

Improving major transportation infrastructure.169

Mandulayong, About 34 per cent of total vehicular population in the Philippines is made up of two- and three-Philippines wheelers, which are major causes of air and noise pollution, traffic congestion and accidents. Despite

all the negative impacts of tricycles, they remain a major transport tool to the residents in the localgovernment units (LGUs). The city of Mandaluyong launched a programme aimed to replace the existingfleet of tricycles with more environmentally friendly substitutes. Following agreement with the tricyclefederations, a city ordinance has announced the ban of 2-stroke tricycle operations in the city.170 At the

164 Clean Air Initiative for Asian Cities (CAI-Asia) Center, Communicating Air Quality during the Commonwealth Games 2010Delhi, Report on the Post-CWG AQM Workshop held on 8 March 2011, Central Pollution Control Board, Delhi, India.165 AQM [Air Quality Management] Measures in Delhi 2010, viewed on the Clear Air Initiative megaevents website, http://megaevents.cleanairinitiative.org, 22 October 2011.166 GTZ, Indonesia Country Profile: Focus on Smaller Cities, report prepared for CAI-Asia Center, 2009.167 Jakarta’s Car Free Day to Be Expanded, 19 June 2011, viewed on the website of the Jakarta Globe, http://www.thejakartaglobe.com, 23 October 2011.168 Making TransJakarta a World Class BRT System, Final Recommendations of the Institute of Transportation and DevelopmentPolicy, June 30, 2005.169 Istanbul Metropolitan Municipality, Istanbul Air Quality Strategy, 2009, downloaded from the Istanbul MetropolitanMunicipality website, http://www.ibb.gov.tr, 21 October 2011.170 Transport measures and policies to promote emission reductions, Philippines, viewed on website of the Sustainable UrbanTransport Initiative, http://ww.sutp.org, 23 October 2011.


Rail-based Mass Rapid Transit Systems

Rail-based MRT systems have many advantages. Most notably, rail-based systems can providehigh capacity as well as high quality services. At the same time, however, they require considerablefunding, and their viability is contingent upon high passenger flows. Several Asian megacities have well-developed or are in the process of developing rail-based MRT systems: underground rail systems arealready a long-established feature of the cities of Tokyo, Hong Kong, China; and Seoul, and their systemscontinue to be enhanced and improved. More recently, rail-based public transport systems have also beenintroduced in several other Asian cities, including light rail (Bangkok, Manila, Changchun) and metro(Beijing, Delhi, Nanjing, Shanghai) systems. Other cities in which rail-based mass transit systems haveeither been implemented, are planned or are under active consideration, include Busan, Daegu and Incheon(Republic of Korea), Kolkata, Chennai and Mumbai (India), Tianjin and Chongqing (China), Karachi(Pakistan); Tbilisi (Georgia) and Dhaka (Bangladesh). Details of selected recent rail-based MRT projectsare provided in Table VII-7.


City Initiative

same time, together with CAI-Asia and its country network Partnership for Clean Air, a micro-financing scheme was set-up to replace existing 2-strokes tricycles with 4-stroke motorcycle engines tolessen carbon emissions. In addition, ADB sponsored a trial of twenty electrically powered tricycles.These will have an estimated range of 200 km and will cost around PHP 45 to recharge, compared toPHP 235 for the fuel used by a petrol-driven tricycle to cover the same distance.171

Shanghai, China Shanghai has a car plate auction system for interested vehicle buyers. Shanghai only allows 50,000new vehicles to be registered every year. Shanghai has an extensive bus system covering manydifferent routes and its metro system is the largest in the world (in terms of length) and one of the top10 busiest.

171 Carlo Suerte Felipe, Mandaluyong tests e-trikes, November 22, 2010, viewed on the website of Manila Bulletin PublishingCorporation, 23 October 2011.

Mandulayong,

the Philippines(continued)

Table VII-7. Selected recent rail mass transit developments in the ESCAP region

City Investment projects

Changchun, China Changchun metro and railway lines

The new mass transit system in Changchun, a city situated in north-eastern China, is said to be the firstnew light rail transit system in China. The initial phase of Line 3 was completed in 2001, while thesecond phase was completed in 2007. Trial service on the second light rail line, Line 4, began in June2011. This 17 km north-south route includes three underground stations on its northernmost section,while the rest of the line runs mostly elevated along Linhe Street (Linhejie). A further north-south line(Line 1) and East-West line (Line 2) are planned for completion by 2020.

Chongqing, China Chongqing subway

Chongqing’s first full subway runs from Chaotianmen (passenger port) at the east end of the centraldistrict to Shapingba in the west. The initial section is 16.4 km, with 14 stations. In the long term it willbe extended to Shuangbei, a further 6.2 km. Limited service started between Jiaochangkou (L2) andShapingba in July 2011. Line 6, the second full subway, is schedule for completion in 2012.

Beijing, China Beijing suburban metro lines

The first sections of four suburban metro lines opened on 30 December 2010: Changping Line, DaxingLine, Fangshan Line and Yizhuang Line. The Daxing Line is connected directly to Subway Line 4,with metro trains running through on the mostly underground suburban route. Until metro line 9 isopened, the Fangshan Line is not directly linked to the existing subway network. The suburban subwaylines share the same specifications with the urban lines, but typically have longer average stationdistances and run partly on the surface.


Bus Rapid Transit (BRT) systems

Bus rapid transport, or BRT, systems, refer to high-capacity buses which operate in segregated buslanes and allow rapid loading and unloading of passengers at stations. Buses used in such systems are oftenarticulated, meaning that they feature a pivotal joint connecting an additional trailer, thereby allowing fora longer bus which can still negotiate turns safely. Most BRT systems utilize electronic fare pre-paymentsystems and level access to decrease the stopping times at stations. BRT systems can be attractiveeconomical alternatives to rail-based MRT systems especially but not exclusively in developing countries,as BRT systems tend to be cheaper and faster to construct, more profitable to operate and cheaper forcommuters.

Shanghai, China Shanghai metro lines

Shanghai’s metro system is one of the most rapidly expanding in the world. Recently completedextensions to the metro network include the extension of Line 2 to Pudong International Airport(completed April 2010); the extension of Line 6 and Line 8 to the Oriental Sports Stadium (April2011); and the construction of Lines 10, 11 and 13.

Delhi, India Delhi Metro System:

Development of the Delhi Metro System has been under consideration for over 50 years. Scheduled forcompletion by 2021, the master plan includes the construction of 240 kilometres of high capacity railtransit.

As of July 2011, with the Airport Express Line in service, the Delhi Metro system comprises six lineswith a total length of ~190 km and 142 stations. Recent extensions to the system include: a 28-kmextension of Yellow Line (line 2), completed September 2010; extension of the Blue Line (lines 3and 4) to Dwarka Sector 21 and Vaishal, completed July 2011extension of Green Line (line 5) toMundka and connection of this line to the Blue Line at Kirti Naga; and completion of the new VioletLine (line) and Orange Line Lines (Airport Express Line).

Bangkok, Thailand BTS Extension and Airport Link

The extension of the Sukhumvit Line of the BTS system from On Nut eastwards to Bearing wascompleted in August 2011. A further extension in this direction to Samut Prakhan has been contracted,while extension at the other end of the line from Mo Chit to Lm Lukka is planned.

In 2010, the Airport Link from Makkasan to Suvarnabhum Airport was brought into operation. Thisline is also used for the City Line commuter service.

Kolkata, India Kolkata Metro

Construction of Line 2 started in 2009. It will run from Salt Lake (Bidhannagar) Sector 5 (in east) toHowrah Railway Station (in west). Unlike line 1, which is operated by Indian Railways, line 2 will beoperated by a new company – Kolkata Metro Rail Corporation (KMRC). Trains will be airconditioned, and underground stations would have platform screen doors. It will use standard gauge,like Kolkata tram, but unlike line 1, which uses broad gauge. It will be elevated along the easternsection through Salt Lake City.

Mashad “Urban Railway”

Mashad’s “Urban Railway” is a completely segregrated light rail system, using low-floor rolling stockmanufactured by CNR Changchung. The first line now in operation is an 18 km east-west route with22 stations, of which about 9 km and 11 stations are underground. Construction works began inDecember 1999, and regular services commenced in October 2011.

Baku, Azerbaijan Baku Metro extension

During 1970-1980s, a 2-line network of 52 km and 33 stations was planned to be completed by theyear 2000. In 2010, however, a new Baku metro development master plan was announced, which setsa target of 5 lines, 119 km of track and 76 stations by 2030. Construction works started in August 2011.

Sources: http://www.urbanrail.net (viewed in October 2011).


City Investment projects

Mashad, IslamicRepublic of Iran


Across Asia there is increased interest in the development of BRT, which can also contribute to thereduction of congestion and pollution within cities. Approximately 40 cities across Asia now haveoperational Bus Rapid Transit systems. China is now formally integrating BRT projects into its plans toimprove urban public transportation, and the largest number of BRT systems that are planned, underconstruction or under consideration are in Chinese cities. However, there are also over a dozen cities inIndia constructing or planning BRT systems. Table VII-8 provides details of selected BRT projects acrossthe region.

Table VII-8. Bus Rapid Transit (BRT) projects in the ESCAP region

City Projects

Ahmedabad, India Ahmedabad BRT

The Ahmedabad BRT system consists of 38 km of dedicated busway located in the centre of the road.There are 57 stations are located at approximately 700 m intervals along the route. The system usesa fleet of 70 dedicated BRT diesel buses. The first 12 km came into operation in 2009, with the fullsystem becoming operational in 2010. As at June 2011, the average daily patronage was 115,000.

Bangkok, Thailand Bangkok BRT

On 15 May 2010 the first Bus Rapid Transit line commenced service linking Sathorn to Ratchapruekacross the Chao Phraya River in Thonburi. This is the first of 14 Bus Rapid Transit lines ultimatelyserving the greater part of the city in the next decade. In the first phase, there will be five BRT lines.The existing and planned Bangkok BRT lines will link to existing skytrain and subway lines andplanned mass rapid transport lines. The BRT uses custom-built air-conditioned buses on dedicated buslanes on the outer lanes of the road.

Changzhou, China Changzhou BRT

The development of the Changzhou BRT was completed in 2009. The system consists of twointersecting corridors comprising a total of 41 kms located in the centre of the roadway, with51 stations at an average separation of approximately 900 m.

Guangzhou, China Guangzhou BRT

A new BRT line in Guangzhou opened in February 2010. The BRT line starts from Guangzhou Dadaoin Tianhe District in the west and runs along Tianhe Lu, Zhongshan Dadao and Huangpu Donglubefore reaching Luogang Kaifa Dadao. The route runs 23 km and has a total of 26 bus stops (1 more isexpected to be added in 2011).172 Peak ridership at any point is around 27,500 passengers per hour inone direction, and total passenger volumes average 805,000 trips per day. The Guangzhou BRT is thefirst high capacity ‘direct-service’ BRT system, in which BRT buses can enter and leave the BRTcorridor, and the first BRT system to include direct physical connections between BRT stations andmetro stations.

Hefei, China Heifi BRT

The Hefei Bus Rapid Transit system opened in 2010. It uses a combination of 7.7 km of dedicatedbusway and 15 kilometres of bus lanes, with a total of incorporating 9 stations at intervals ofapproximately 850 m along the dedicated busway. Peak traffic level is 2,700 persons per hour in onedirection.

Tehran BRT

The city of Tehran has seven BRT lines operating in various directions.

Line 1 was inaugurated in January 2008. It comprises an 18-km route in the east-west directionbetween Tehran-Pars and the Azadi Terminal. The line is characterized by a segregated corridor withmedian arterial runway, median-located stations, and low-floor left-door buses. It does not operateexpress buses. Investment on Line 1 was US$ 80 million.

Line 2 also operates in the east-west direction along a 20-km route between Khavaran Terminal andAzadi Terminal. It has its own segregated corridor, reserved platforms and stations located at the sideof the roads. The line operates about 250 express and normal buses. It was inaugurated in September2008 and currently carries more than 270,000 commuters daily.

Tehran, IslamicRepublic of Iran

172 The official website of the 16th Asian Games, http://www.gz2010.cn, Guangzhou Bus Rapid Transit (BRT) to open inJanuary, viewed on 4 January 2010.


Promotion of Non-motorized Transport (NMT)

Non-motorized transport (NMT), such as walking, bicycles and three-wheel pedal-poweredvehicles, is still an important form of transportation for many people in a number of Asia’s major cities.A recent ADB report examines a cross-section of 19 Asian cities and finds pedestrian mode share to rangefrom 40 to 63 per cent (see Figure VII-10).176 Separate studies conducted under the Clean Air Initiative –Asia on sustainable transport indicators in Pune (India), Hanoi (Viet Nam) and Xi’an (China) found that60 per cent of all trips in each of these cities are walked, cycled, in two-wheelers, or in cycle rickshaws(Pune and Hanoi) and three-wheeled rickshaws (Pune).

However, increased motorization in many Asian cities means that “walking and non-motorizedtransport... traditionally the main means of transport in emerging Asia… are becoming more difficult andless socially acceptable in many Asian cities.”177 Leather et al. report that: “in Hanoi, many trips could bemade by foot and bicycle because average trip lengths are low. But poor infrastructure forces people toabandon walking and cycling and use motorcycles instead. The situation is similar in Manila where nearly35 per cent of destinations are within a 15-minute walk or bicycle trip, but the majority of short trips aremade by paratransit (jeepneys and tricycles) and cars. In Surabaya, a city that is only 15 km from north to


City Projects

Line 3 runs in a north-south direction between Khavaran Terminal and Elm-O-San’nat Terminal overa distance of 14 km. The route operates 120 buses, carrying 150,000 commuters daily.

Other lines which have started operations in 2010 include:

Line 4 between Parkway and the South terminal,

Line 5 between the Elm-O-San’nat Terminal and the Olympic Village,

Line 6 between Parkway and Hafte Tir, and

Line 7 between Tajrish and Railway Square.

These lines together operate more than 2,000 articulated buses.173

Hanoi, Viet Nam Hanoi BRT

With financial assistance from the World Bank, the Japan Policy and Human Resources DevelopmentFund and the Global Environment Fund (GEF), the Hanoi People’s Committee Transport and UrbanWorks Projects Management Unit is investing US$ 170 million in an ongoing Urban TransportDevelopment Project (HUTDP). The project has three components. The first of these covers anestimated US$ 60-90 million of investment into developing the city’s bus network. Project activitiesinclude increasing the capacity of the bus system, building two experimental BRT routes, developingbus maintenance facilities, and the implementation of modern secure ticketing systems.174

Jakarta, Indonesia Jakarta BRT

TransJakarta was the first full BRT system in Asia. It was opened on a single route in January 2004,was constructed by the municipal government of Jakarta and cost US$ 49 million. The TransJakartasystem now encompasses ten routes and 145 stations, spanning a total of 119 km of dedicated busweay.The planned system includes 14 corridors. ITDP data shows there were only 30,000 passengers a dayin the busway’s first operational year in 2004. By April 2011, the number of busway passengers hasnow increased to 330,000 day, with the peak volume on an individual route reaching 3,000 per hour.175

Source: Unless otherwise indicated, information is from China Bus Rapid Transit website, http://www.chinabrt.org, viewed 25 October 2011.

173BRT in Iran: Beneficiary of country’s transportation reforms, July 1, 2011, viewed on website of Global Mass Transit, http://www.globalmasstransit.net, viewed 26 October 2011.174 World Bank (2004), VN-Hanoi Urban Transport Project, [Project Information Document (PID) Concept Stage], (World Bank,Washington), viewed on World Bank website projects database, www.worldbank.org175 Jakarta Post, Busway system could save Rp 235 billion in subsidies, 7 February 2008.176 James Leather, Herbert Fabian, Sudhir Gota, and Alvin Mejia Walkability and Pedestrian Facilities in Asian Cities: State andIssues, ADB Sustainable Development Working Paper Series, ADB, Manila, February 2011.177 Asian Development Bank, Energy Efficiency and Climate Change Considerations for On-road Transport in Asia, WorkingPaper Consultation Draft, 19 May 2006, viewed October 2007, http://www.cleanairnet.org/caiasia/1412/articles-70656-draft2.pdf.


south, over 60 per cent of trips are under 3 km, but they are mostly made by motor vehicles such asmotorcycle mopeds or by paratransit modes.”178

The needs of non-motorized transport have been ignored in conventional planning strategies andhave been assigned lower importance compared to other vehicles on the road.179 But NMT remainsa viable option to meet the basic mobility needs of all groups in an environmentally sustainable way. Theendorsement of “segregated walk- and bike-ways to provide the safety and user-friendliness that theseactivities require” is a necessity.180 There are some signs of increasing formal recognition of the importanceof pedestrian movements in urban transport planning. The Dhaka Strategic Transport Plan, for example,explicitly adopts a ‘Pedestrian First’ philosophy.181 Examples of cities which promote the use of the bicycleas a sustainable means of transportation are given in Table VII-9 below.

Figure VII-10. Pedestrian mode share in Asian Cities

Source: Leather et al., Walkability and Pedestrian Facilities in Asian Cities: State and Issues.

178 Leather et al., op. cit.179 Garima Nayyar, People first: Time for some democracy on the streets, The Times of India, 4 June 2010,180 Asian Development Bank, Energy Efficiency and Climate Change Considerations for On-road Transport in Asia, WorkingPaper Consultation Draft, 19 May 2006, viewed in October 2007, http://www.cleanairnet.org/caiasia/1412/articles-70656-draft2.pdf.181 Leather et al., op. cit.

Dongguan, China, 2006

Pondicherry, India, 2008

Urumqi, China, 2006

Nanchang, China, 2003

Weihai, China, 2005

Jaipur, India, 2005

Bikaner, India, 2008

Ghangzhou, China, 2003

Chennai, India, 2002

Mysore, India, 2005

Surat, India, 2005

Shenzhen, China, 2005

Lanzhou, China, 2001

Gangtok, India, 2008

Zhuzou, China, 2000

Shimla, India, 2008

Haiphong, Viet Nam, 2007

Dhaka, Bangladesh, 1999

Chongqing, China, 2002

0 10 20 30 40 50 60 70

Pedestrian Mode Share


4. Moving Freight Sustainably

Far less attention has been paid to moving freight sustainably than to moving people sustainably.Yet the movement of freight generates a significant proportion of urban traffic, and an even higherproportion of regional and inter-urban traffic. In recent work undertaken by the United Nations, a taxonomyof measures that might be taken to improve the sustainability of freight movements was developed.185 Thisis reproduced in Figure VII-11 below.

Reducing the volume of freight moved

The two main strategies for reducing the volume of freight moved are de-materialization of theeconomy and the reduction in the movement of ‘unwanted’ freight. At the most general level, thede-materialization of the economy may entail a change the way in which progress is conceived andmeasured away from the predominance of indicators that indicate the volume of market transaction, such asGDP or GNI, towards broader based measures of societal welfare.186 It is clear that without positivespecific policy action any inherent tendency for the economy to dematerialize as income increase will notbe sufficient to contribute significantly to the achievement of sustainability objectives. This has beenrecognized by several ESCAP member countries through the adoption of specific policies aimed re-focusing

Table VII-9. Urban Policies promoting the use of Bicycles

City Policy

Bicycle lanes have been developed in Marikina, Metro Manila, the Philippines as part of the greaterMetro Manila Urban Transport Integration Project, co-financed by the World Bank and theGovernment of the Philippines. Implemented by the Global Environment Facility (GEF), thecomponent includes the construction, evaluation and promotion of the Marikina Bikeway System –a 66 kilometre network of trails and road lanes designed specifically for NMT, plus bicycle parkingand traffic calming systems. It is hoped that the new NMT-friendly facilities will encourage the use ofNMT modes, and connection with the public transport terminals will promote the combined use ofNMT and train/bus for trips between Marikina and the rest of metropolitan Manila.

Tehran Municipality has implemented the first phase of a plan to provide public bikes together withdedicated cycle routes. A pilot project in District 8 and during this period, 34 bicycle storage fracilitieshave been established and about 2,000 bicycles have been distributed among them. It is reported that8,000 people have enrolled to use the bicycle lane. There are plans to extend the scheme to districts 12,20, and 22. In addition, the scheme will be extended to Chitgar Park, which has more than 120 km ofbicycle lanes, and there are plans to open special bicycle stations near BRT bus stops in the nearfuture.182

Chennai, India A pilot initiative at Anna Nagar will see a dedicated cycle track will be developed on a 6.5-km stretchand cycle lands will be developed in another seven-km stretch. A hierarchy of tracks will be developedso that cyclists and pedestrians can share space.183

Shanghai, China Authorities have decided to set up more bicycle lanes between major transport roads and hubs in orderto expand the coverage of bike-rental services. Commission officials have begun assessing roadconditions in preparation for building bike-connection lanes between major streets, bus and Metrostations. The city’s transport bureau has also stated its intention to integrate bike-rental services inmore of under-construction Metro stations, especially in outlying areas. Shanghai started offeringbike-rental services on a trial basis last year in Zhangjiang High-tech Park in Pudong.184

Metro Manila,the Philippines

Tehran, IslamicRepublic of Iran

182 Tehran Reconciles with Bicycles, 17 May 2010, viewed on the website of the Iran Architecture and Urbanism News Agency,http://news-en.aruna.ir, 25 October 2011.183 Ajai Sreevatsan, Cycle lanes are a symbol of democracy, The Hindu, 13 July 2010.184 Shanghai Daily, City thinks green in bike-only lanes plan, 20 October 2009, http://www.shanghaidaily.com, viewed on4 January 2010.185 Steve Meyrick, Indicators of eco-efficiency and sustainability for urban freight transport, paper prepared for Guidelines fordeveloping eco-efficient and socially inclusive infrastructure, UNESCAP (2011).186 Redefining Progress, Economic Localization, accessed at the Redefining Progress website, http://www.rprogress.org,25 April 2010.


economic growth. For example, under the umbrella of the Law of the Circular Economy 2006, China’sResource Efficient and Environment-Friendly (REEF) Society Project incorporates a four commitments, thefirst of which relates directly to re-orienting economic growth away from material consumption:

Develop service sector to increase share in the economyRevive traditional frugality values to guideConsumption behaviours;Raise public awareness among producers and consumers towards rational consumption.187

Another fruitful approach to reducing the amount of waste transporting is to make the costs ofremoval of waste the responsibility of those who benefit from the sale and who control the decisions of howproducts are manufactured. This approach has now been quite widely adopted in developed countries as faras hazardous waste is concerned:

“The management of return flows is becoming increasingly important for a growing number ofbusinesses. Governmental policy and legislation, such as the WEEE Directive and environmentalregulations restricting the disposal of potentially hazardous product and packaging materials, haveforced manufacturers to take responsibility for the take-back of used goods from customer markets.Customer awareness is also creating opportunities for “green branding” and new markets forreturned goods. Moreover, return flows can reduce production costs by replacing raw materials.”188

Unproductive freight movements related to the carrying of packaging materials can be addressed ina similar manner, by making manufacturers responsible for the disposable of all packaging. This wouldprovide an incentive to reduce the quantity of packaging and also to ensure that what packing is used isrecyclable (as in Japan’s Packaging Recycling Law). However, an alternative available to government is tomore directly intervene through the regulation of packaging practice, as, for example, in China’s ‘Law ForPromoting Circular Economy’.189

Figure VII-11. “Attack points” in reducing the environmental impact of urban freight transport

Source: Steve Meyrick, Indicators of eco-efficiency and sustainability for urban freight transport, paper prepared for Guidelines for developingeco-efficient and socially inclusive infrastructure, UNESCAP (2011).

187 United Nations ESCAP, Greening Growth in Asia and the Pacific, UNESCAP, Bangkok, 2008.188 McLeod, Fraser et al., Developing innovative and more sustainable approaches to reverse logistics for the collection,recycling and disposal of waste products from urban centres: Literature review and identification of opportunities, 2008,downloaded from Green Logistics website, http://www.greenlogistics.com, 24 April 2010.189 World Bank, Developing a Circular Economy in China: Highlights and Recommendations, World Bank Technical AssistanceProgramme 2009, World Bank, Washington.


Reducing the distance over which freight must be moved

The typical supply chain consists of a number of distinct movements: input materials to componentfactory; components to final assembly; movement of the final product to a distribution centre; movementfrom distribution centre to wholesaler; from wholesaler to retailer; and from retailer to final destination. Ifsome of these movements can be eliminated or reduced in length by the collocation of activities that takeplace at different stages of the supply chain then the total distance travelled by freight can be reduced. Freetrade zones, freight villages, logistics centres and other initiatives encourage the collocation of productionlogistics and distribution activities within a single industrial park. In particular, the collocation of finalassembly/packaging with warehousing activities offers the potential to remove one transport link fromcomplex supply chains.

Changing freight transport mode

There are very significant differences between the energy consumption and emissions performanceof different transport modes. The extent of these differences depends very much on the specificcharacteristic of the freight task and the transport vehicle used, but top-down analysis based on total energyconsumption and emissions can provide a robust indication of the relative magnitude. A wide range ofstudies has confirmed the following general ranking, in order of increasing energy efficiency and decreasingemissions: sea, rail, road and air.

Reversing the trend to increasing road transport dominance of the freight task will requirereconfiguring the rail transport model from the traditional ‘point to point’ carriage to a focus on seamlessmultimodal freight movement. UIC reports initial steps in this direction by a number of railways of theregion:

“Russian and Malaysian Railways have completely shifted their freight activities to a totallyintegrated intermodal concept, including hubs with ports and roads. Despite investments worththousands of billions of US$ in the next 20 years on rail infrastructure, Indian Railways are facinga real challenge regarding congestion and have already defined priority corridors to invest orupgrade, targeting a 50 per cent + rail market share from their existing 40 per cent share of thefreight market. Finally, the Korean experience shows that seaports are competing with thedevelopment of inland dry ports, optimally positioned closer to manufacturing location, creatingreal added-value, new functions and services. Caucasus Railways, by upgrading their railinfrastructure in creating new corridors, are becoming key actors for Asia to Europe transportation.Those integrated activities, now everywhere in Asia, will definitely interact with railways, makingthem unavoidable partners”.190

Reducing the number of movements required

Much of the time, urban freight vehicles run empty. Improvement of urban logistics throughconstruction of freight consolidation and distribution centres near urban and other strategic locations havepotential to reduce the number of less than truck loads as well as empty truck trips which are currentlyestimated to be around one third of total freight truck trips. For example, the percentage of trucks runningempty is around 12-30 per cent in Pakistan and 43 per cent in China.191 And even when they are carryingloads, the loads that are carried loads are often much less than the capacity of the vehicle. To some extent,this in unavoidable because freight flows are usually unbalanced, and some backhaul trips will always bemade empty. Also, many urban delivery tasks involve drop-offs at a number of locations. A truck that leavesthe depot full will often be nearly empty before it makes its final delivery.

190 UIC participates in the 2nd successful UNESCAP Working Group on the Trans-Asian Railway Network, viewed on theInternational Union of Railways website, http://www.uic.org, 26 October 2011.191 Londono-Kent, P., Freight Transport for Development Toolkit: Road Freight, World Bank, 2009.


Nevertheless, there are a number of things that can be done to improve load factors (load tocapacity ratios). For example, the potential for the development and promotion of urban freight centres tofacilitate the consolidation of freight has been explored in detail by Wisetjindawat192 and Min.193

Consolidation of freight can reduce the number of freight vehicle movements by both permitting the use oflarger vehicles and by increasing load factors. Wisetjindawat argues that freight consolidation has thepotential to reduce the environmental impact of urban freight transport while at the same time enhancingbusiness competitiveness, but that some incentives may need to be provided to promote collaborationbetween business in order to achieve these benefits consolidated delivery and sharing technologies canreduce operation costs and at the same time decrease the environmental impact. In developing countries,similar cooperation should be encouraged in order to improve not only the quality of life of citizens, butalso to improve the position of these countries’ businesses in the global market. Incentives for shiftingdeliveries from shipper’s own trucks to using services provided by freight forwarders are alsorecommended in order to increase the chance of consolidated deliveries.

Reducing the impact of each vehicle movement

To a significant extent, reduction in the impact of each vehicle movement will result from the morestringent fuel efficiency and fuel quality standards discussed earlier in this chapter. However, the adoptionof strict environmental standards for motor vehicles is one thing: enforcement of those standards is another.In a recent paper based on a comparative study of policies in 10 Asian cities, Hirota notes that:

“Not only implementation of emission standards for new vehicles, but also regular inspection andmaintenance of vehicles with uncontrolled emissions are effective for emission reductions. Asiancountries have legislation regarding registration, I/M (inspection and maintenance) and FuelQuality Monitoring (FQM) systems. However, operation of the registration, I/M (inspection andmaintenance) and fuel quality monitoring systems used in developing countries are observed toshare similar characteristics, such as a weakness of government initiative and inadequate operationby government bodies, which results from shortages of human resources and analysis facilities.These present issues may affect emission volumes from mobile sources.” 194

Vehicle maintenance practices and minor design changes can result in improved environmentalperformance and also in reduced fuel consumption. Fleet operators therefore often have an financialincentive to pursue these improvement, provided they are aware of the economies that could be gained bydoing so. Fabian (2010) reports a pilot project in Guangzhou that focuses on the following minor designimprovements to an existing truck fleet. The results of the pilot suggest a payback period of 1.8 years forthe required investment, and a reduction of fuel consumption of 12 per cent.195

According to the Victorian Transport Association, a “driver’s level of skill can effect fuel use by upto and in excess of 35 per cent”.196 Although savings of this magnitude are likely to be rare, it is clear thatdriver behaviour can have a significant impact on the environmental impact of freight vehicles operations.The United States Environmental Protection Agency cites a Canadian study which estimates that manyfleets could achieve a 10 per cent fuel economy improvement through driver training and monitoring, andtwo trucking fleet studies found fuel efficiency improvements of 18 per cent and 20 per cent.197 Moreover,driver behaviour is one aspect of the freight transport system that can be changed quickly and at little cost.

192 Wisetjindawat, Wisinee Review of Good Practices in Urban Freight Transportation, Paper prepared for Eco-Efficient andSustainable Urban Infrastructure Development in Asia and Latin America Project, 2010, downloaded from ESCAP website, http://www.unescap.org, 21 October 2011.193 Min, Yeonjoo, GHG Mitigation Strategies in Logistics Sector of Korea, Presentation to Expert Group Meeting on SustainableTransport Development: Eco-efficiency in Freight Transportation and Logistics, 29-30 March 2010, Bangkok.194 Keiko Hirota, Comparative Studies on Vehicle Related Policies for Air Pollution Reduction in Ten Asian Countries,Sustainability, Vol. 2, 145-162, 2010.195 Fabian, Bert 2010, Freight and its impact on air pollution, greenhouse gas emissions, and fuel consumption in Asia,Presentation to Expert Group Meeting on Sustainable Transport Development: Eco-efficiency in Freight Transportation andLogistics, 29-30 March, Bangkok.196 Victorian Transport Association, Freight Sector GHG Management, Presentation to Freight Environment and ProductivityConference, Melbourne, 2009.197 United States Environmental Protection Agency (USEPA), A Glance at Clean Freight Strategies: Drivers Training, undated.downloaded from USEPA website, http://www.epa.gov, 15 May 2010.

United Nations United Nations publicationEconomic and Social Commission Sales No. E.12.II.F.8for Asia and the Pacific Copyright © United Nations 2011Transport Division ISBN: 978-92-1-120642-5United Nations Building ST/ESCAP/2623Rajadamnern Nok AvenueBangkok 10200, ThailandTel.: +66 2 288 1371Fax: +66 2 288 3050Website: http://www.unescap.org/

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