Railways — back on the track?
China's Exim Bank, will provide $ 200 million
soft-term loan to Pakistan for modernization of its railway system
From Shamim Ahmed
Sep 03 - 09, 2001
The Minister for Railways and Communication Lt.
Gen. (Rtd) Javed Ashraf Qazi claimed with full confidence that
Pakistan Railways which showed an operating loss of Rs. 9 billion 2
years back will end the current (2001-2002) financial year with some
profit. The annual losses were brought down to Rs. 5 billion from Rs.
9 billion during the outgoing financial year.
Talking to the newsmen on his return from China,
Gen. Qazi said that the operational standards of railways has much
improved with induction of new air conditions coaches, new locomotives
and better services to the passenger. With the Chinese help further
improvement are being made to give a completely new look to Railways.
Economy class will be abolished by total conversion to fully air
conditions coaches, reducing travelling time and ensuring punctuality.
The Railways & Communication Minister who had
accompanied the Finance Minister to Beijing, revealed that China's
Exim Bank, will provide $ 200 million soft-term loan to Pakistan for
modernization of it s railway system.
"We discussed financial package to be provided
by the Exim Bank for supply of 69 locomotives and 175 coaches to
Pakistan Railways," he said, adding the terms and conditions of
the financing would be finalized over the next few weeks. All the
technical issues in this regard have already been finalized.
Under the arrangements, the Chinese firm Dong Fang
Electric Corporation would provide 69 locomotives to Pakistan Railways
under supplier credit programme, while the China National Machinery
Import and Export Corporation would supply 175 passenger coaches to
the Pakistan Railways. The Chinese government has also accepted
Pakistan's request of helping in selecting the equipment to be
provided to Pakistan Railways. It was also agreed during the meeting
that the Chinese railways minister would visit Pakistan soon to see as
to how they could further assist Pakistan Railways for its
development. Meanwhile, the vice-minister for Railways will be
visiting Islamabad within the next two to three months for holding
preliminary discussion with the Pakistan authorities.
Ruling out the possibility of privatisation of
Railways, the Minister assured the nation that through revolutionary
measures being taken by the present government, the organization will
be turned into a real national asset paying dividend by the end of the
current financial year. The Minister revealed that the gap between
revenues and expenditure has already been reduced to Rs. 819 million
from Rs. 2.630 billion last year. The Railways generated Rs. 2.426
more this year as compared to last year.
He said "as a result of measures taken by the
Ministry, the railways generated Rs. 2.426 billion more during the
financial year ending on June 30 this year as compared to
1999-2000." Railways also paid back Rs 2.50 billion to the State
Bank of Pakistan. The minister showed his confidence to bring down the
annual deficit of railways to zero by the end of current financial
He said the total saving through these measures
reached to 1759 billion, while railways also earned profit of Rs. 2
billion through rehabilitation of different trains and improving the
Answering a question he said that about Rs. 3.56
billion is allocated under Public Sector Development Plan (PSDP) in
the next federal budget for the purpose of rehabilitation of railways
so poor people get more benefit. The railways has 11 hundred
locomotive a decade ago but only 330 are working now, there is a great
need for rehabilitation of locomotives. He said that an amount of Rs.
1543 million is allocated for track rehabilitation under PSDP out of
which Rs. 1143 million are foreign component while Rs. 400 million are
domestic resources, he said.
While Rs. 452 million is allocated for
rehabilitation and improvement of signals, Rs. 350 million for
procurement and manufacturing of 175 passenger coaches, Rs. 250
million for rehabilitation of 240 coaches, Rs. 150 million for
procurement of 300 high oil wagons including 150 foreign component and
Rs. 50 million domestic arrangement. For procurement of plant and
machinery for C&W shops at Mugalpura Rs. 97 million have been
allocated including Rs. 37 million foreign component and Rs. 57
million domestic component.
Pakistan Railways has entered into several
agreements with Chinese Railways Companies to manufacture 175
passenger coaches for PR both in China (40) and in PR's carriage
factory in Islamabad (135) and 69 railway locomotives of which 54 in
PR's locomotive Factory in Risalpur. They should also undertake
manufacturing of 8-wheel bogies wagons in carriage factory so that all
goods trains on PR network can run at the same speed as passenger
trains and eliminate the traffic bottleneck caused by trains of
4-wheel. Goods wagons would be manufactured at the rate of 1000 wagons
per year during the Second Plan period with the sole object of
utilising the available funds. Besides China, Austria and Ukraine have
also shown interest to invest in this field in Pakistan and the
government is reviewing their proposals.