Bailout financial injection for Pakistan Railways

Hundreds  of passengers are found at railways stations across the country waiting for several hours for trains to come and yet they return disappointed. The fact that 26 trains did not depart only on Thursday speaks of how grave is the crisis in once a profitable organization till 1976-77. Resultantly, road transport is fast replacing trains for short distance journeys but the people who have to travel far are a real loss. The immediate cause is defective locomotives which invariably go out of order midway the journey and drivers struck the job seeking for new traction motors to be fitted. This row was resolved on the management's commitment that locos will be refurbished in two months. But the time the Pakistan Railway commitment is honoured train journey will continue to suffer.  
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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.