Government has allowed railways
to sell off surplus land
From Shamim Ahmed
Feb 28 - Mar 05, 2000
It has now been officially confirmed that the earlier plan to privatize
Pakistan Railways has been shelved by the present government which, instead, is keen to
revamp the system, rid it from rampant corruption, overstaffing and inefficiency,
eliminate its losses and convert it into a profitable national asset.
Chief Executive General Pervez Musharraf who presided over a meeting on
Railway affairs in Lahore last week pledged to restore the Pakistan Railways as an
efficient system of transportation in the country and said that it can achieve its old
standards of efficiency and discipline by reorientation, modifications and planning to
bring it on par with other modern railway systems in the world. The Chief Executive said
at the "briefing on the plight of the Pakistan Railways" that almost all
departments of national importance had been drifted towards collapse due to negligence and
lack of interest by the previous governments. Stating that he could see a silver lining,
Gen. Musharraf said improvements are there and more are needed to turn the railways into a
viable, efficient, safe and comfortable mode of transportation system. He directted that
all necessary steps should be taken for making railways a modern and comfortable
travelling service for the common man.
Chief Executive announced a Rs. 44 billion special package to revive
the railways. Addressing Pakistan officers at the Pakistan Railways (PR) headquarters, the
CE said Rs. 4 billion would be released to the railways on emergency basis to improve its
assets and performance. A sum of Rs. 40 billion had been approved in principal for the
completion of long-term projects to be released to the PR in phases.
He made it clear that the government was taking keen interest in the
railways and that it would not be subjected to any discrimination rather it would get due
attention. He said he would continue to visit the PR headquarters frequently.
Musharraf was confident that he would steer the PR out of the crises
with the rail officials' cooperation. About the restoration of rail employees' perks and
allowances, he said they should first make the railways a profit-earning organization
which would automatically restore their suspended perks and allowances. The present
circumstances did not allow perks and allowances, he added.
The Chief Executive regretted that National Highway Authority, National
Shipping Corporation, Pakistan Steel Mills, PIA and PR, all were running in deficit and it
was the government's priority to revive all these institutions. He said the government
wanted to see these institutions generating their own resources to lessen burden on
government. He was of the view that with a few necessary changes and proper planning, the
railways would become a profit-earning institution and meet the challenges of the new
millennium. The past governments had ignored such an important institution deliberately
which added to the passengers' miseries.
Earlier PR General Manager gave a detailed briefing on the affairs of
the railways. He informed that PR owed a Rs. 19.646 billion overdraft to the State Bank on
which Rs. 11.199 billion interest had been paid till date, the deficit stood at Rs. 3.5
billion and the PR had planned to bring it down to Rs. 2.5 billion in the current fiscal.
He said the deficit would be overcome by the end of the next fiscal.
He said various measures had been adopted to improve the rail
performance, including railways' restructuring with the unity of command in the field and
the headquarters. The unions had been brought under control. Irregular grant of overtime
in workshops had been stopped saving Rs. 200 million annually. A campaign had been
launched against encroachments. A vigilance directorate had been established. Some 137
stoppages of 28 trains approved on political considerations had been cancelled to save
time. A campaign between January 21 and February 10 had earned Rs 5 million from the
ticketless passengers while the earnings at stations had increased by Rs. 13 million.
He appealed to the CE to allow the railways to sell its land and
utilise the proceeds for its development and debt retiring, besides increase in passenger
fares by 15 per cent. He said the defence ministry owed Rs. 850 million which should be
released. Similarly, Punjab Food Department should be asked to pay its Rs. 120 million for
its warehouses built on railway land.
Prompt action has been taken by the government on the request by the
Ministry of Railway and allowed them to sell off surplus land. According to one estimate
it can fetch over Rs. 20 billion to railway and it can easily clear off its overdraft and
balance its budget. The special allocation of Rs. 44 billion to be provided by the federal
government during the next 3 years can be spent on improving the stocks and infrastructure
of the railway.
Seemingly the World Bank has not liked the change in government policy
to shelve the idea of privatization of railways as it has suspended 100 million dollar
loan earlier sanctioned for restructuring of railways and making it viable for
privatization. The Chairman of the newly constituted Railway Board Lt. Gen. Javed Ashraf
(Retd) who is also the secretary of the Ministry of Railways appears to be right in his
opposition to the World Bank's loaning components for railway's rehabilitation and
restructuring programme. According to reports, out of the proposed loan of $ 100 million
from the World Bank, a substantial chunk of $ 20 million was earmarked for payments to
consultants while yet another unproductive segment amounting to $ 50 billion was allocated
for expenditure to be incurred on payments to the employees accepting voluntary retirement
under a golden handshake scheme. The remaining paltry sum of $ 30 million was proposed to
be used in the financing of the railways' rehabilitation itself.
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 1990-92. 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 messenger traffic 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 revitalising 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
It is a pity that the major state enterprises such as PIA, WAPDA, Pak
Steel and Railways were over-staffed with political inductions by the successive
governments over the past couple of decades, in total disregard to their financial and
operational liability. Corruption, lethargy and inefficiency were the natural consequences
of their politicisation, which has rendered them into non-profitable institutions, with
growing burden on the national exchequer over the years. The damage caused to the railways
in the process was particularly grievous, as it has deprived the masses of an efficient
mode of transportation. We welcome the government's attention towards its deplorable
conditions and hope that it will soon achieve enviable position once again with the
implementation of its Emergency Rehabilitation Plan. It is hoped that the plan will
envisage clearance of the mess created as a result of the political inductions by weeding
out the corrupt, inefficient and incompetent elements. Nation wish success to the plan
with the hope that Railway's services will be compatible with other railways systems in