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CNG kits.

Pakistan attempts to address its environmental issues adequately, in the backdrop of continuing higher population growth. Environmental regulations, in the shape of the Pakistan Environmental Protection Act 1997, are already in place.

The national environmental control policies are being implemented, and the Pakistan Environmental Protection Council and the provincial environmental protection agencies have been established. Furthermore, the government has recently applied National Environmental Quality Standards related to air, water and noise pollution.

The core areas targeted for priority implementation under the National Conservation Strategy include integration of population and environmental programmes, of which pollution prevention or reduction is a vital element. Understandably, motor vehicle emission is a significant factor causing the environmental degradation and pollution. Air pollution in Karachi and Lahore at present is reported to be 20 times higher than the WHO (World Health Organization) standards and continues to rise. In Lahore, motor vehicle exhaust accounts for as high as 90 per cent of the total air pollutants. The magnitude of the problem can be gauged from the fact that currently there are over 4 million vehicles in Pakistan, which generate about 550 tonnes of lead emissions yearly. An average vehicle emits 25 times as much and 20 times as many hydrocarbons and over 3-1/2 times as many nitrous oxide in the ambient air, as that of an average vehicle in the US.

Realising that the government is aiming at promoting environmentally sound technologies and use of alternate fuels for vehicles, besides taking other measures in this direction such as use of better quality of fuel and improved maintenance of the vehicles. In recent years LTG (Liquefied Petroleum Gas) and CNG (Compressed Natural Gas) have emerged as alternate fuels for vehicles in the country. Many rickshaw, taxi and some private car owners have, in recent past, switched over to LPG, a cheaper source of fuel and low cost kit. The option, however, has various limitations and is no longer in vogue.

CNG is an indigenous fuel and is smoke-free and clean. The government, therefore, widely promotes, as a policy, the use of CNG not only to curtail import bill of petroleum products but also to reverse the environmental degradation. Pakistan has 32 trillion cubic feet (cu.ft) of proven reserves of natural gas and the potential of 200 trillion cu.ft. whereas it currently produces only 2,236 million cu.ft. Under the scenario, even the extensive use of CNG in vehicles in future will not pose any supply problem.

Recently the government has made tremendous progress in promoting CNG through setting up of CNG filling stations, conversion of petrol-run vehicles, and providing incentives to the entrepreneurs. As a result of these measures more than 265,000 vehicles have already been converted on CNG. The car assemblers in Pakistan have also responded well and have started marketing dedicated CNG cars that have gained instant popularity. Thus, Pakistan is reported to be ranking number three among the CNG users in the world.

In addition, plans are underway to introduce dedicated CNG buses in Pakistan, initially in Karachi and Lahore, and conversion of diesel buses on CNG. The network of CNG buses will be extended to other cities, including Islamabad, in the second phase. For the purpose the necessary infrastructure is being developed at national level. The government initially plans to import about 2,000 dedicated CNG buses a year. The private sector has already taken initiative and would shortly operate a fleet of 300 CNG buses in Karachi. Currently, there are about 100,000 dieselrun buses plying on the roads, which need to be converted on CNG. Various countries have shown interest in extending economic and technical assistance for conversion of these buses on CNG in major cities.

In view of the foregoing, the CNG sector is considered a major area of investment. Given the necessary support by the government, an investment of Rs. 40 billion is to be made in this sector by the private sector alone in next three years. It is, however, unfortunate that Pakistan continues its dependence on the imported conversion kits and other related equipment and no serious efforts seem to have been made by the government or the industry for its indigenous manufacturing. For last many years the Hydrocarbon Development Institute of Pakistan has made efforts to develop the conversion kit in the private sector, but could not bear fruit, mainly due to low volumes at that time and now, because of lack of government initiative. It is more than three years that the proposal of a public-sector-engineering unit to undertake local production of these kits was pending with the government for approval.

A study has already been carried out regarding feasibility of local manufacturing and marketing of CNG kits, according to which the kit consists of 140 components. Out of these, 57 items are high precision parts and require high-class metal cutting and die casting machines. Such facilities are available with the Pakistan machine Tool Factory, a state enterprise and a couple of private industrial units at Karachi. Most of these items have been developed at one of these units through reverse engineering, utilizing in-house design and manufacturing facilities. The balance 83 items are either low technology components or standard parts and can easily be procured from local vendors. Thus all the components can be produced indigenously even at initial stage, for assembly of about 50,000 units per year. The additional investment, nonetheless, will be required, firstly, for increasing production capacity, and secondly, for provision of tooling and creating testing facilities at the premises.

The major constraints is that of technology. CNG technology, though not advanced, is available with only a few Western countries - Italy, New Zealand, the UK, the US and Argentina--having mastered it. Logic, therefore, dictates to produce the equipment through acquisition of foreign technology, rather than reinventing the wheel. For this reason the CNG equipment is to be produced under technical collaboration, or through joint venture arrangement, and the technology partner has to be renowned and well introduced in Pakistan with commitment to transfer technology fully. On the other side, it is imperative for the life-safety reasons that the production is allowed under strict quality control. This will require hiring of services of foreign experts, and training ahead of Pakistani engineers and technicians in the fields of production, assembly and testing.

In due course, plans shall also be made to pursue the development of the sub-sector further by undertaking production of other allied CNG equipment such as cylinders, machinery for filling station (compressor, pump, etc.) and, at a later stage, the manufacturing of complete CNG engines as well.

To promote the use of environmentally sound technologies in the country the government is expected to allow various incentives to all the stakeholders, with focus on investment decisions. This will result in numerous economic and social benefits. In order to build the capacity of industry and institutions the government may consider the following recommendations:

* Encourage and promote local manufacturing and marketing of CNG kits, thereby discouraging import from different sources, under a phased programme.

* Facilities technology transfer to the local industry through selected partners and under the umbrella of Hydrocarbon Development Institute of Pakistan.

* Channel soft-term credit to entrepreneurs for promoting use of locally produced CNG kits and allied equipment, in addition the existing SME Bank facility for installation of kits.

* Release of financial grants, under technology development fund or through multilateral agreements, required for R&D and acquisition of technology.

* Direct all the local assemblers of cars and buses to enter into long-term agreements with the indigenous manufacturers of CNG kit for their requirements.

* Extend most favoured treatment to those undertaking indigenous productions of CNG equipment, with regard to import duty, sales tax, income tax etc.

In conclusion, the government has to adopt such practical measures not only to make the national environmental action plan successful but also to achieve the cherished goals of self-reliance and industrialization.

- Engr. Hussain Ahmad Siddiqui
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Title Annotation:Compressed Natural Gas; new environmental regulations in Pakistan
Author:Siddiqui, Hussian Ahmad
Publication:Economic Review
Geographic Code:9PAKI
Date:Jul 1, 2003
Previous Article:Press release.
Next Article:Coal-based power plants: Pakistan-China sign agreement.

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