A heavy injection of capital has helped Pakistan Railways show some signs of recovery. Will it pick up the required pace?
Photo by Rahat Dar
Pakistan Railways is passing through the worst time of its history. In the absence of enough locomotives to run its operations and overstaffing, it has come to the brink of collapse.
The outdated infrastructure, non-functioning of its cargo wing, insecurity of passengers and unreliable train schedules have made things worse and stopped people from opting for this mode of travel. The governments have had to announce bailout packages from taxpayers’ money to save this service.
According to the sitting Railways Minister, Khawaja Saad Rafiq, Pakistan Railways needs around Rs1,000 billion to come up to the standard of a quality national rail service.
Pakistan Railways has succeeded in getting budgetary allocations worth Rs77 billion and Rs41 billion in the years 2014-15 and 2015-16 respectively. A large portion of this amount has reportedly been spent on buying new locomotives and repairing the old ones with the aim to increase the number of both passenger and cargo trains.
Today, Pakistan Railways boasts of having achieved the short-term targets it has set for itself. One of these is the setting up of an autonomous railways board comprising technical hands having expertise in railways.
Since the year 2000, the organisation was being run through an executive committee of the railway board which has no legal basis. The committee was formed for the first time by Javed Ashraf Qazi, the railways minister in Musharraf’s regime.
Pakistan Railways’ spokesman, Rauf Tahir, tells TNS that the institution has come up with a report on the targets achieved over the last two years. Some details are:
The yearly revenue that was Rs18 billion in 2012-13 rose to Rs 32billion in 2014-15, recording an increase of 72 per cent in two years.
During the year 2013-14, the expected losses which were fixed at Rs33.05 billion came out to be around Rs32.05 billion. That year Pakistan Railways spent Rs5 billion on the payment of pensions, General Provident (GP) fund, salary raises and payment of outstanding dues of oil and power companies. Otherwise, the losses could have been brought down to Rs27.05 billion.
In 2014-15, the actual losses were Rs27.025 billion against the expected loss of Rs37 billion.
There were several factors, according to the spokesperson, that led to achieving these targets. Rationalisation of fares and improvement in timings of trains increased the confidence of the people who travel by train. Similarly, he says, a substantial increase in the number of freight trains and recoveries from PSO, food department, postal service, Pakistan Army, etc, improved financial health of the institution.
The number of freight trains has increased from 182 per annum to 2,920 per annum over the last two years, recording an increase of 1504 per cent. How the increase in cargo operations was possible also needs to be discussed.
By the start of 2012-13, there were only eight locomotives available on a daily basis. The figure has increased ten times to 80 by the end of 2014-15. In 2012-13, only 46,617 wagons were loaded with goods. This number has increased to 1,76,155 in 2014-15, showing an increase of 278 per cent.
Due to improvement in its freight service, Pakistan Railways was able to sign long-term goods transportation contracts with entities such as Maple Leaf Cement, Bestway Cement, Ghareebwal Cement, AwanTRADING COMPANY and Chishtian Logistics Company. The freight operation alone has earned Rs8.5 billion during 2014-15 as compared to Rs1 billion during 2012-13, as per the latest two-year report of Pakistan Railways.
Another achievement, according to the report, is that Pakistan Railways has earned Rs3.064 billion from mid-term lease of railway land over the last two years. The earning under this head was Rs2.433 billion during the preceding five years. In addition to this, 74 acre railway land worth Rs1.073 has been evacuated from encroachers during the last two years.
Critics believe there is a long way to go. The government, they say, has just reduced the scale of losses and increased the revenues as compared to the previous years and not earned any profits.
During the financial year 2012-13, the total loss of Pakistan Railways was 62.8 per cent of the total expenditure which was brought down to 58.8 per cent in financial year 2013-14. These losses are covered through overdrafts or bailout packages extended by the government from the taxpayers’ money. The real success, the critics believe, will come the day when this entity is able to cover its expenses from its earnings.
One point of view is that the performance Pakistan Railways is boasting of is due to other factors. For example, the need to transport coal to coal power plants and to prepare ground for launch of China Pakistan Economic Corridor (CPEC) has made the sitting government focus its attention on this neglected entity.
In the words of Information Minister Pervaiz Rasheed, Pakistan Railways has also been included in the early harvest programme of CPEC. Under this programme, the existing tracks would be improved and made much faster and safe.
The delivery of 55 locomotives with 4000 to 45000 horse power capacity will begin from October 2016. These locomotives, manufactured by America’s General Electric (GE), will increase the cargo carriage capacity of railways considerably and result in a reasonable increase in its earnings. The payload of these engines will be 2400 tonnes instead of 1200 tonnes and these will be helpful in carrying coal from port or other locations to power plants running on coal.
The corruption in land management and sales and purchases made by railways officials is something that needs to be tackled on an urgent basis. Though Real Estate Development & Marketing Company (REDMCO) has been established and registered with Security and Exchange Commission of Pakistan (SECP) with the aim to exploit the real potential of railway land, the need of appointing honest officers on key posts cannot be overlooked.
Similarly, in the presence of a recently introduced policy for disposal of surplus scrap, special measures are needed to break the stronghold of scrap mafia on railways’ scrap go-downs. The incidents of thefts will also have to be checked to encourage businessmen to transport their goods via rail service.
Both the above-mentioned responsibilities lie with the railways police which has failed to deliver over the years. Pakistan Railways seems to be aware of the lack of interest among its force and has announced to gradually bring its salaries at par with those of the Punjab police. It has also recruited Special Services Group (SSG) commandos who have trained 320 railway police personnel to tackle terrorists. Furthermore, Rs500 million have been earmarked in the current fiscal year to make this force effective.