The authorities in every country need to know how to provide the convenient transport services to the grass roots

KHALIL AHMED, Senior Correspondent
Oct 02 - Oct 08, 2006

Margaret Thatcher, one of the most renowned prime ministers of the UK assumed power in 1979 and announced revolutionary plans regarding public services. She believed that the government should not indulge itself in running public services. Hence British Airways and the British Airports Authority were sold off in 1987. Along with transport services comprising buses, railway and ferries, other public services i.e. gas, water, telephones, electricity etc were also privatized. It is also to be noted that in 1989, the British Government proposed a new form of 'privatization'. This innovative type of privatization revealed that some roads could be financed, built and operated by the private sector. Public transport services (be it trains, buses or planes) are now run by private companies in the United Kingdom which has led to the quality services and the elimination of the traditional double-decker bus services in London. Undoubtedly, the private sector brings about innovation in services to satisfy the end-users at the end of the day. It must not be forgotten that the role of the government here is very crucial and it is that of the regulator. Incase the regulator does not have the check on the system; the entire system would end up in a chaos.

It has been over two decades since the transport services were privatized in the UK. If we look minutely at the privatization of the transportation services in the UK, we would gather that the most significant reason behind the idea of privatizing the UK 's public transport services was the economic problems of the 1970s. The oil prices went all time high in the 70s which compelled the authorities to think of the privatization of the sector which off course lessened the economic burden off the government. Though there were lots of controversies regarding the privatization, yet this could be termed a prudent and timely decision. It was in 1997 when the Labour government took over and sought to maintain public sector control of transport services. Again here it must not be forgotten that the Labour government sought private sector investment in its modernization. Last year, after a few protests regarding the reversal of the process (a publicly-owned railway), the Department for Transport in the UK announced that bringing the railways back under public control was not affordable. It must be mentioned that the growth in rail travel reflects the preference of the transport mode by the Britishers and the sole reason for this could be modern transport system.

The authorities in every country need to know how to provide the convenient transport services to the grass roots. The Indian railway is a public entity and the authorities know that the government can afford to have it as public entity as the economy of the country grew at over 8.5 percent in the last fiscal year and the foreign investment in many sectors is quite robust. India has recently begun building a $4.25 billion Metro project, expected to be completed by 2030, for its most popular city called Mumbai. The rail service project is expected to serve 1.1 million passengers of the crowded city every day at the completion of its first phase in 2009.This radical improvement in transport can be afforded by the country like India which is called the emerging economic giant in Asia .

Let's take the example of Japan . More than 70% of the land surface in Japan is mountainous and the only practical possibility for transport in Japan is rail. The Japanese government has focused its attention on the most viable option of transport and the world knows what Japan has attained in the railway service.

When we talk about Pakistan , we come to know that the preferred mode of transport by the masses is road not the rail (it is claimed that over 70 million people travel by trains in our country). There are various reasons for it and among the leading reasons is that of time management and the quality of service. These problems could be solved by the magic wind and that is if we achieve robust private partnership in the sector for innovation.

Let's look at the recent study of the World Bank regarding the transport in Pakistan . 'According to a leading local newspaper the World Bank estimated an annual loss of Rs220 billion or 6 per cent of GDP due to inadequacies of the transportation system. The bank listed some of the major issues of transport sector which also included inadequate physical capacity, inadequate maintenance system, poorly targeted priorities of investment, operational and financial inefficiencies of the public investment, lack of private sector participation and environmental impact. The government was told to consider the rational allocation of inland freight traffic between rail and road network, privatization of railway's operation in selected sections...'

What Pakistan needs at the moment is complete revamp in the rail network through privatization. The government should not indulge itself in the business of the transport and should act as regulator. The official website of Pakistan Railways reads 'Realizing years of neglect that the Railways have been subjected to, the present Government has approved two Plans totaling over Rs. 44 Billion to restore the Railways to its past glory.'

If you recall you would remember that in the year 2000 the government had no funds to buy locomotives which was the critical need of the hour since according to sources the railway had almost grounded to a halt due to old and out-of-order fleet of locomotives. The only solution was to procure locomotives on credit for which all world renowned suppliers except the Chinese disagreed (thanks to our all time friend). Just imagine for a moment what would have happened, had China not come to our rescue in time. Incase the sector is privatized, the problems like shortage of locomotives, bogus bookings by coolies, old technology, single train track on major routes, poor infrastructure of the stations etc might eliminate in no time.

It is to be noted that our trains travel at the speed of between 100 and 140 km/hour which perhaps remind us of the distant past. Modern rail transport systems first appeared in England in the 1820s. The slower most inter-city traffic in Britain is restricted to a maximum speed of 200 km/h. In 1990, a French TGV reached a speed of 515.3 km/h and a Japanese maglev reached 581 km/h. Source quote that the government is in negotiations with German companies to start bullet trains for the Lahore-Karachi and Karachi-Islamabad route. Let's see when this gets materialized under the present public sector supervision. A common man's eyes must be glued open to see bullet trains run on the railway tracks built in the 19th and the 20th century.

According to Sumit K. Majumdar, 'privatization succeeds and fails for several reasons some of them being commitment, competition, transparency and mitigation. These factors interactively make privatization yield the necessary results.' Well, it is to be seen whether the authorities look into the option of railway privatization and get success in providing relief to the masses. It should also be noticed that most rail systems across the world (metro/subway) are highly subsidized and have rarely been profitable. It is said that passenger rail in nearly all countries is dependent on government subsidies.
















Operational Expenditure














The increase in deficit during 2003-2004 was due to escalation in the prices of fuel (76%), pay and allowances (13%) and pension (27%).