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High level meeting regarding woes of Pakistan Railways

Islamabad: At a high level meeting in the Presidency today to discuss woes of Pakistan Railways, President Asif Ali Zardari advised the Government to release funds within 07 days for payment of salaries and pension of the railway employees who have been agitating against non-payment of salaries to them.

Spokesperson to the President Mr. Farhatullah Babar said that today’s meeting had been convened specially to examine proposals for salvaging Pakistan Railways with the help of private sector from the abyss into which it had fallen. Private sector entrepreneurs were also invited to the meeting to discuss public-private partnership model for revamping railways, he said.

The President also advised the Government to arrange a loan of Rs. 6 billion for locomotive repairs and purchase of new locomotives. The loan will be used exclusively for this purpose and will not be diverted for any other purpose.

The President gave this directive when the Railways Minister Haji Ghulam Ahmed Bilour pointed out that because of non-availability of locomotives, the freight trains had been suspended and the revenue from cargo transportation had come down from Rs. 9 billion a year to almost zero at present.

He said that cargo service was the most critical element of Pakistan Railways to generate finances not only to support itself but also to make great profits.

Farhatullah Babar said that another decision taken during the meeting pertains to over Rs. 40 billion outstanding overdraft obtained from the State Bank by Pakistan Railways for which it has been paying an amount of Rs. 350 million per month. The President advised that this matter be taken up in the Council of Common Interests as Railways services were utilized by all the provinces and issue was inter-provincial in nature, he said.

It was also decided that a meeting of private and public sector representatives be held at the earliest to firm up proposals of the private sector participation in revamping and restructuring of Pakistan Railways so as to turn it around into a real profitable venture. The proposals will be finalized within a month, it was decided.

The meeting that was held to deliberate upon the current challenges faced by the organization was attended by Haji Ghulam Ahmed Bilour, Federal Minister for Railways, Dr. Abdul Hafeez Sheikh, Finance Minister, Mr. M. Salman Faruqui, Secretary General, Dr. Nadeem ul Haq, Deputy Chairman Planning Commission, Federal Secretaries of Railways, Finance, Planning and Development divisions besides secretary EAD, Mir Ahmed Bakhsh Lehri, Chief Secretary Balochistan and Spokesperson to the President Mr. Farhatullah Babar and other senior officials.

Mr. Arif Habib, Chairman Arif Habib Group of Companies, and Mr. Aqeel Karim Dhedi, Chairman ARD Group of Companies, were also present during the meeting as special invitees to give inputs on the role private sector could play in turning around the railways.

The President said that Pakistan Railways was an area where there were great opportunities for public private partnership. He said that locomotive rehabilitation, outsourcing of maintenance, commercialization of passenger services and leasing of the locomotives are some of the areas in which private sector can join hands with the public sector in a mutually beneficial partnership.

The President also said that Pakistan Railways needs to re-orient itself to introduce corporate culture in its organization while simultaneously undertaking comprehensive administrative, financial and human resource reforms.

He said that merely injecting more finances by the Government alone and that too when the country’s economy was under severe stress was no permanent solution.

Farhatullah Babar said that the President said that besides internal weaknesses of the organization, the past neglect of the successive governments in providing sufficient resources to Pakistan Railways as compared to other modes of transportation particularly the road sector was also among one of the major causes for the present plight of PR.

He said that the present government was keen to bail out and revamp Pakistan Railways because of its strategic and commercial importance and enable it play its due role in national economic development.

The President said that at time when the Government was working assiduously for enhancing regional connectivity, Pakistan Railways necessarily has a major role in materializing the concept of inter and intra regional connectivity projects. The President said that regional linkages of Pakistan Railways to China through Khunjerab, to Afghanistan through Peshawar and

Chaman and to Iran through Taftan were of immense importance from connectivity point of view and from socio-economic perspective.

Haji Ghulam Ahmed Bilour, Federal Minister for Railways, Secretary Railways Mr. Javed Iqbal and General Manager PR Mr. Saeed Akhtar briefed the meeting about various causes that contributed towards deterioration of the organization and various options to resuscitate it.

It was informed that that due to lack of investment consistently in the past, PR has been unable to render its capacity service. Being a public service organization, various factors such as rising salaries, pensions and fuel prices constrained organization’s allocations for repair and maintenance, it was told.

The Railways Minister said that in 50s and 60s the five years plans saw PR a preferred mode of transportation with allocation of more than 60% of the funds set aside for transport sector but later on it dwindled continually sliding down to 20% in 1998-2005.
Haji Ghulam Ahmed Bilour said half of the total locomotives were out of order, 86% bridges more than 100 years old, signalling system was obsolete, telecommunication system outdated and track over-aged. He said that efforts were underway to attract private investment to shore up Railway’s declining resources.

Railways Minister said that a crisis management programme has been put in place whereby task force has been constituted to explore possibility of repairing locomotives in collaboration with private sector as well as hiring / leasing them from other countries.

The Railways Minister also put forward various recommendation including chalking out a National Transport Policy to fix the role of railway versus road so as to rationalize the allocation of funds, various emergency measures to address issues such as pensions, foreign loans and State Bank overdraft. He also proposed Government subsidy in the current financial year since the allocations for PR were short of the demand by the organization.

The meeting was informed that the pre-feasibility report for the proposed Gul Train has been received. Farhatullah Babar said that the pre-feasibility report endorsed the concept of private sector participation in the operation and maintenance of cargo and passenger train services.

The private sector representatives present during the meeting said that private sector could invest in the rolling stock and can assist in raising funds and bringing in investment in the railway sector.

For more information, contact:
Haji Ahmed Malik
Principal Information Officer
Press Information Department (PID)
Tel: +9251 925 2323 and +9251 925 2324
Fax: +9251 925 2325 and +9251 925 2326
Email: piopid@gmail.com

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