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Government has allowed railways to sell off surplus land

From Shamim Ahmed Rizvi, Islamabad
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 employees.

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 the world.