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 Rizvi,
Islamabad
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 year.

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 cargo trains.

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.