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Restructuring the Railways

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Pakistan Railways has been invariably reporting losses in its operations during the last 52 years

From Shamim Ahmed Rizvi, Islamabad
Jan 24 - 30, 2000

It is now almost certain that the earlier plan to privatise Railways has been shelved by the Military government which instead wants to revamp the system, rid it from rampant corruption and control its losses. The federal government has reportedly approved a rehabilitation plan to be launched under the control and supervision of the Army.

One of the important policy decisions taken at the joint meeting of the National Security Council and the Federal Cabinet, presided over by the Chief Executive, General Pervez Musharraf, last week related to the revival of the defunct Railway Board and its merger with the Ministry of Railways, which is now headed by a new secretary, who is a retired Lieutenant General of the Army, who will simultaneously hold charges as Chairman of the Railway Board. This decision seemingly marked a reversal in the process of privatisation of Pakistan Railways which was initiated by the previous government back in 1998 when on August 30, the 137-year old Pakistan Railways was divided into three separate and independent units, each to be headed by a Managing Director. The three units were described as the Infrastructure Unit, Freight, Service Unit and Passenger Service unit, which have been operating independently over the last one year and reports indicated that the Freight Unit had registered some increase in its profit earnings during this period through better utilization of the available number of wagons. Thus the entire process aimed at privatization of the railways has come to a halt as a result of the latest cabinet decision, indicating that the present government is giving preference to retention of Pakistan Railways as a single entity in the public sector and that new efforts would be directed towards the goal of making Pakistan Railways a viable and profit earning concern.

Lt.Gen. Javed Ashraf Qazi, new Secretary of Railway Ministry and Chairman Railway Board, while briefing the newsmen said that the objective of the Plan which has been dully approved by the National Security and the Federal Cabinet at a joint meeting held for this purpose include restructuring of railways emergency repair measures, rehabilitation and modernization steps and reduction of debt burden on the department. Lieutenant General Qazi regretted that PR hasan overdraft of Rs. 19 billion for which the department is paying Rs. 3 billion interest annually. While the operational deficit is Rs. 2.6 billion every year. As such, the total annual deficit stands at Rs. 9 billion.

He said that with the approval of the federal cabinet, the Ministry of Railways has constituted a committee to work out a strategy to deal with the surplus staff. Till then, General Qazi said, no retrenchment would be made in the Pakistan Railways.

At present, non technical staff—including clerks, workers and peons—are in surplus, while the technical staff is insufficient. "We have chalked out a plan to train the non technical staff and accommodate them in technical sections to overcome the deficiency there. The three-month training programme would soon start in Lahore.

The railway department has been divided into two units—operations and technical. These units will be headed by general managers. One will run the mail operation while the other will look into the task of manufacturing and services. The task of the general managers would be to work for the rehabilitation of the department and earn money to revive its economic position.

It may be recalled that Pakistan Railways has been invariably reporting losses in its operations during the last 52 years despite repeated efforts on the part of the various governments in the past to inject dynamism, both administratively and financially, in its working, but all such efforts seemingly failed to produce the desired results. The organization which is purely commercial in its functions has failed to bridge the gap in its expenditure and income. In fact, the gap has been widening without any sign of a change for the better. As a result, the federal government as the owner of the railways, has to meet the large deficits from its meager financial resources. Instead of fixing the dismal affairs in Pakistan Railways, the Zia-ul-Haq government had opted for a quick fix by launching the National Logistic Cell through the Army resources, instead of restructuring and downsizing the overstaffed monopoly.

It was due to the inefficiency in its working and constant deficit in its balance sheet that the railways lost a substantial share in the freight and passenger movement market of the country over the last five decades and consequently the privately owned bus services and trucking companies have been rapidly gaining ground in the transport system.

As things stand, public confidence in the railways is at an all-time low. The Pakistan Railways suffered a loss of over Rs. 6 billion in 1997-98 as compared to Rs. 1.8 billion in 1990-91. The spiralling losses are due to a number of factors, the principal one being a progressive decline in the operational efficiency and reliability of its passenger and freight services, to say nothing of convenience and comfort of travel. As a result, there has been a sharp fall in passenger tarffic and freight transported over the years and a rise in expenditures at the same time. The railways have been neglected by successive governments which preferred to invest in road and air transport instead. This neglect has had very far-reaching consequences. The travails of train travellers are endless. From hassles in getting tickets, to the deplorable condition of trains and the absence of any mechanism to check and rectify the many malpractices, irregularities and deficiencies that afflict the whole of spectrum of train travel.

As the army takes stock of the situation, a good idea would be to set up a committee comprising experts from the field of railways to come up with a set of recommendations of both short-and long-term nature so that the process of revitalizing the railways can be started on a sound footing and in right earnest. Under the ongoing restructuring process, the railways has already shut down over 200 train routes out of a total of 324 and intends to sack 30,000 employees. To carry this process through to its logical end calls for an unbending will, patience and perseverance. The turnaround in the railways is imperative as this organization should serve as the pivot of the national transport system and an arterial channel of economic activity in the country. And it will got to the credit of the army if it is able to restore the railways to its pristine position so that it plays its crucial role in the composite sector of communications and economic activity.