Bailout package for Pakistan Railways

The federal government has finally decided to help the Pakistan Railways (PR) by approving a Rs 11.1 billion bailout package. Of this, Rs 6.1 billion will come from loans from the commercial banks. Additionally, Rs15 billion development funds will also be provided for the railways on a fast track basis. Now that a bailout package has finally been put in place, it is up to the Railways Ministry to put the country’s rail transport system back on track. The federal government was not keen on giving out these funds since Railways Minister Ghulam Ahmad Bilour could not come up with a plan to improve PR, which has accrued a deficit of Rs 52.5 billion. Even in the holy month of Ramzan, railway employees are waiting for their salaries due to lack of funds.

Railways all over the world have both a commercial and a social function – that of linking isolated areas suffering from neglect. It was one of the greatest communication revolutions in mankind’s history, which brought isolated communities into the mainstream. PR, on the other hand, seems on the way to reversing this historic legacy due to mismanagement. Only 200 out of the 500 locomotives of PR are operational. There is no fuel available to run many trains because of non-payment. That issue will be resolved now that the government has decided to increase the line of credit from the Pakistan State Oil (PSO) to Rs 2 billion in order to ensure a smooth and uninterrupted supply of oil. The correct approach is to make a three-tier plan: immediate, medium-term and long-term.

Immediately, the Railways Ministry needs to deal with improving the tracks and rolling stock. These are management and administrative issues, and eminently doable. As far as locomotives are concerned, they should assess which ones are still functional. The non-functional ones can be cannibalised for repairing others. In the medium term, new locomotives should be bought but it should be kept in mind that in the past, Chinese locomotives have created some problems so quality must be ensured. American locomotives are more expensive but have a longer life. We should not try to find shortcuts in this regard. We need to buy as many locomotives as possible to get the railways rolling again. In the long run, we have to become self-reliant through manufacturing capabilities. The Mughalpura Railway Workshops should be revamped to restore repair capability and incrementally move to developing manufacturing locomotives and carriages, etc. This will save a great deal of foreign exchange in the future. The maintenance culture of PR also needs to be improved.

Railways are the cheapest, safest and most convenient form of transport service available to mankind. Road transport is not convenient, especially for long journeys, and also puts greater pressure on our roads, leading to more expenditure on road maintenance. Privatising railways is not an option as the private sector is motivated only by profit and will end up chopping all non-profit making railway lines. We cannot allow that to happen. Freight transport through railways was a money-making venture, but PR has fallen into such a pit of inefficiency that now more freight is carried through roads. We must make a thorough, well thought through plan and implement it efficiently. We can learn from the Indian Railways and see what they have done right and where we went wrong.

(my editorial in Daily Times)


Daedalus said…
You should have mentioned the Asian Development Bank's work with CAREC. It's available on Internet. Inside its proper context the railroad bailout package makes sense. Now I don't have a map but I'm sensing a connection from a new Pakistani port to Afghanistan through Central Asia to China or Europe. Now don’t get mad at me. These are the words of Ahmed Rashid in the Financial Times, ”At stake is not just peace for Afghanistan, but the entire region including a deeply precarious Pakistan. The talks are premised on the essential realisation that neither a successful western withdrawal from Afghanistan nor a transition to Afghan forces can take place, without an end to the civil war and a political settlement that involves the Afghan government and the Taliban, but also Pakistan, the US and the region.” Quite honestly they make a good deal of sense. Keep the Taliban at bay while we build. It’s the Taliban who have needed the military victory. Without it how can you keep the world out of Afghanistan? Bush couldn’t make any promises but needed to deliver the transportation infractructure first then negotiate with the Taliban and the tribes. For nearly eight years the World Bank, the Asian Development Bank and CAREC have been building across Central Asia from China to Europe and even onto the Indian Ocean in an effort to restore the former land routes once known as the Silk Road. Now I can understand American reluctance to mention the matter. What could they possibly gain from such an effort? Weren’t they simply doing the work of other nations: Russia, China, India, Pakistan and even Iran? The American public sees these states as hostile or indifferent to the country and Afghanistan makes little sense. Yet their silence on Afghanistan is deafening. Before the sea routes were discovered Afghanistan was a valuable gateway for trade between major markets. They might indeed recover their value again which is well and good for all Afghanistan’s neighbors like Pakistan but I can’t see this Western expeditionary force doing this sort of favor for nothing. So what happened? What did America demand for its services in Central Asia? A free hand across the Middle East and North Africa? A coordinated effort on Iran and North Korea? What is a prosperous and stable Central Asia worth to its neighbors? If Mr. Rashid is right then those talks are less about American withdrawal and deal far more with trade in the area and the attraction of prosperity to the tribes. People may not settle for life without it. All the Taliban can promise is poverty and prayer. Your railroads can be very important and deliver large volumes of trade between the big markets around you.

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