London Taxis come to Pakistan

Posted on June 16, 2006
Filed Under >Adil Najam, Economy & Development, Pakistanis Abroad
Total Views: 16851

Adil Najam

Pakistan will soon have around 300 ‘London Taxicabs’ plying the streets of Islamabad and soon thereafter a plant will be established to manufacture these for export elsewhere. According to a story in The Daily Times (June 16, 2006) the government has allowed the duty-free import of 300 London Taxicabs on a ‘trial basis.’ The reported highlight is that these will be “equipped with modern gadgets such as satellite tracking.”

Excerpts of the The Daily Times (June 16, 2006) report:

The minister admitted that the London Taxi International (LTI) was shrinking its business in the UK due to heavy cost. The government has allowed duty-free import of 300 taxis (CBUs), while the Prime Transport Limited, a company owned by a US-based Pakistani will invest one billion US dollars for the setting up of an assembly plant of LTI at Gharo in Sindh… He said the company would provide affordable fare (Rs 11.20 per kilometer).

Mr Ghuman said that LTI plant will assemble 18,000 taxi cabs every year in Pakistan, out of which 9,000 taxi cabs would be exported. The export of 9000 taxi-cabs will fetch $2.8 billion every year, he added. The 2400 cc (2.4 liters diesel engine) London Tax priced at 42,000 pounds in the UK will be available at around 20,000 pounds in Pakistan, he added.

The Minister also announced that Dubai World (DW) will construct modern cities at Clifton Beach, Sandspit & Manora and Hawkesbay & Cape Mount in Karachi and that Daimler Chrysler, Volkswagen, Renault and Jetta will also set up plants in Pakistan.

On the London Taxicabs, however, I recall that their economics did not even work out when people tried to introduce them in New York, so I am skeptical about it working in the long term in Pakistan. Rs. 11.20 per kilometer sounds like a good rate but even 20,000 pounds (nearly $40,000) is a fortune for a Pakistani cab driver (given that most Pakistani taxis are self-owned or leased). Plus, if they can be sold for 42,000 pounds on the international market, where is the logic of selling them for 20,000 pounds in Pakistan. Anyhow, I do not have enough information yet to make a definitive determination but on the face it it looks a little too good to be true (expect for the tax-free break for the first imports, which is clearly a sweet deal).

10 responses to “London Taxis come to Pakistan”

  1. Bhatti says:

    I woudl love to also know what really happened. Maybe you guys can pelase do a follwoup. Was it, as you suggest in the post, a “sweet deal’ that was “too good to be true”? COudl it have been a scam of some sort? Or maybe its just that it is too early. But after all the fanfare, mayb we shoudl find what si actually happening?

  2. Yahya says:

    I think this did not work out in the end. There was a small news somewhere on the lines that company did not want to invest anymore. If I remember correctly they wanted better terms from government. Could have been a scam.

  3. Frank K. says:

    Does anyone here know if this has already happened. Or any other update on this issue. Thank you.

  4. Karachiwalla says:

    In Pakistan the word ‘Taxi’ is sometimes used to refer to a prostitute or sex worker… and while this story is not about porn… maybe the reference is not outright inappropriate ;-) After all, these Taxis from London will also become the play things of the rich, since at this cost the poor will never use them.

  5. Omar Malik says:

    This hasbeen quite a topic of discussion these days in business and government circles. You are quite right in your assessment of this London Taxi modelled “Black Cab”project . I wonder how the Minister of Investment and even the Prime minister and President has set aside certain procedures to grant approvals on this project. One thing seems obvious that the plan has been approved without any concrete financial or economic reasoning/presentation. Full marks to the person who has convinced the top people about his plan. So impressed are the policy makers, that he was asked to make an Urban Road Transport Policy. Interestingly, the entrepreneur is already marketing for franchize of his Black Cab which is a bit strange as it has yet to take off in practical sense. Lets see what happens as the dead line given by the President is first week of August 2006.

Leave a Reply

Your email address will not be published. Required fields are marked *