Title - India for developing joint cross-border rail with Pak

Munabao-Khokharapar rail route to facilitate transport of petro products, India has proposed to Pakistan for jointly developing second rail route between Munabao in Rajasthan and Khokharapar in Sindh to facilitate transport of petroleum products.The need for second rail route emerges from the fact that there is barely any transport of petrochemical products from India to Pakistan via land route as of now and the existing Attari-Wagah railway line is limited to trade in petrochemical products mainly by Indian Oil Corporation.This is despite petroleum products not being in the negative list of 1,209 products proposed by Pakistan earlier this year.The second rail link figured prominently at the first meeting of experts’ group on trade in petroleum and petrochemical products between India and Pakistan. The two-day joint secretary level meeting in the capital concluded on Wednesday with both sides agreeing to re-examine the current prohibition on rail movement of containers and open wagons for pet coke and sulphur.The original rail line between Munabao and Khok­harapar had fallen into disuse ever since it was closed after the 1965 Indo-Pakistan war in which the town itself was captured by Pakistani troops. However, it re-opened again in 2006 with Thar Express running once a week between the two stations.Trade talks between Indian and Pakistan got stalled after the Mumbai attacks in 2008. However, it restarted again three years later in April 2011 after a meeting of India’s prime minister Manmohan Singh with his Pakistani counterpart Yousuf Raza Gilani over a semi-final cricket match between the two nations in Mohali in March 2011. Following this, there was a commerce secretaries level meeting wherein the two sides agreed to set up expert groups on host of subjects, including petroleum products.

A petroleum ministry news release said that both sides have agreed that railway authorities of India and Pakistan should work out the most optimal commercial utilisation of available railway infrastructure for transportation of petroleum and petrochemical products while addressing the existing issue of inadequacy of locomotives in Pakistan.

However, till that happens, the Indian side suggested that solid products like pet coke and sulphur could be moved in open trucks while finished lubes (small packs and drums) can be transported in containers and liquid products like Hexane, MTO, petrol can be transported from India to Pakistan in ISO tank containers or trucks.

Besides, the public sector companies including HPCL/HMEL and IOCL have also offered to examine the feasibility of constructing petroleum product pip­elines between HPCL-Mittal Energy’s (HMEL) Bathinda refinery and Lahore and IOCL’s Jalandhar tap-off point to Lahore subject to commercial viability and considerations.

Lastly, the two sides have also agreed to take up with their central banks as well as finance ministries the need to work out back-to-back cre­dit lines between banks to facilitate efficient trade fin­ance arrangement between the two countries on the back of high cost of letters of credit.

“It was recognised that in the current international scenario, trade in petroleum products between the two sides would have to be guided by the principles of commerciality and market considerations. It was agreed that commercial matters such as matching Pakistan’s product specification requirements, pricing, other term and conditions of trade and participation in tenders floated by Pakistan’s oil companies would be left to the commercial entities of both sides,” the release said.

Bilateral trade between India and Pakistan was $2.7 billion in 2010-11 and this is estimated to go up to $6 billion by 2014 However, there is no two-way investment so far between the two countries. India currently exports vegetables, frozen meat, soyabean extraction and cotton yarn among other items and imports dry fruits from Pakistan.