PAKISTAN RAILWAYS

S.M.ABBAS ZAIDI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Aug 16 - 22, 2010

Pakistan Railways is a national state-owned rail transport service of Pakistan headquartered in Lahore. It is administered by the federal government under the ministry of railways.

Pakistan Railways provides an important mode of transportation throughout Pakistan. It is commonly referred to as the "lifeline of the country", by aiding in large scale movement of people and freight throughout Pakistan.

Pakistan Railways has a definite edge over roads for long haul and mass scale traffic movement both for passenger and freight in addition to providing a safe, economical and environment friendly mode of transport.

IMPORTANCE

An efficient transportation system plays a vital role in the economic development of a country. The government vision for economic growth and poverty reduction requires massive investment and development of infrastructure for sustainable economic growth. Throughout world history, rail traffic has played an important part in the development and economic prosperity of nations. PR is a valuable source of employment.

EARNINGS OF PAKISTAN RAILWAYS (RS IN MN)

FISCAL YEAR EARNING % CHANGE
2001-02 13,046 9.3
2002-03 14,812 13.5
2003-04 14,636 -1.2
2004-05 18,027 23.2
2005-06 18,184 0.9
2006-07 19,194 5.5
2007-08 19,973 4.1
2008-09 23,160 16.0
2009-10 (Jul-Mar) 16,875 -3.3

An effective railway system facilitates commerce and trade, reduces transportation cost (monetary and non-monetary), and promotes rural development and national integration while reducing the burden on commuters. Pakistan Railways was the primary mode of transportation in the country till the seventies. However, owing primarily to a diversion of already scarce resources towards the expansion of the road network, the performance and condition of Pakistan Railways declined and its share of inland traffic reduced from 41 percent to 10 percent for passenger and 73 percent to four percent for freight traffic.

FINANCIAL PERFORMANCE

During the last nine years (2000?2009), Pakistan Railways has shown improving trend in both passenger and traffic registering an average increase of 3.2 percent and four percent per annum, respectively. A decrease in passenger traffic was seen for the year 2009?2010 (Jul-Mar) with a negative growth rate of 7.15 percent due to less traveling as a result of deterioration of security whereas freight traffic has decreased by 13.1 percent over the same period of last year. The negative growth trend can be attributed to the recession in the economic growth in the country as well as law and order situation created in the country by the miscreant. The fall in growth rates for freight traffic during the current financial year has been attributed to the less availability of locomotives for freight traffic because of non-procurement of spares due to financial constraint.

Many part of the railway tracks have been destroyed with immense damage being caused to the rolling stock and stations of Pakistan Railways during riots in December 2007. The damaged assets during riots have not been repaired due to reduction in PSDP allocation last year.

CURRENT PROJECTS

Pakistan has already completed pre-feasibility study for establishing a rail link with China. This rail link could further boost trade relations between the two countries by facilitating the already growing trade with China and operations of Gwadar Sea Port.

Pakistan Railways has signed contract with Chinese supplier for the maintenance of Chinese locomotives to improve reliability and availability of locomotive. Pakistan Railway is encouraging private sector to bring rolling stock for running of passenger and freight trains by paying track access charges.

A contract agreement for procurement and manufacturing of 202 coaches has been signed. 150 Coaches out of 202 shall be manufactured in Pakistan Carriage Factory Islamabad from completely knockdown kits during next three years. 150 out of 500 completely knock down (CKD) wagons received from China will be manufactured in Pakistan Railways workshop in Moghalpura this year against the project for Procurement/Manufacture of 530 high capacity wagons. Rehabilitation of 400 old coaches is underway with 80 coaches expected to be rehabilitated during the current financial year. Another ongoing development project is the doubling of tracks from Khanewal-Raiwind (246 Km). Doubling of track will also be completed from Chichawatni to Okara stations during the period under review.

FISCAL
YEAR

PASSENGER TRAFFIC (MILLION) PASSENGER KM

FREIGHT MILLION TON KM

ROAD

% CHANGE

RAIL

% CHANGE

ROAD

% CHANGE

RAIL

% CHANGE

2001-02

209,381

0.5

20,783

6.1

108,818

0.2

4,573

1.2

2002-03

215,872

3.1

22,306

7.3

110,172

1.2

4,830

5.4

2003-04

222,779

3.2

23,045

3.3

114,244

3.7

5,336

10.7

2004-05

232,191

4.2

24,238

5.2

116,327

1.8

5,532

3.6

2005-06

238,077

2.5

25,621

5.7

117,035

0.6

5,916

6.9

2006-07

. .

26,446

3.2

-

-

5,453

-7.8

2007-08

. .

24,731

-6.5

.

-

6,178

13.3

2008-09

. .

25,702

3.95

.

-

5,896

-4.10

2009-10*

. . . . . . . .

(Jul-Mar)

. .

18,270

-7.15

   

3,925

-13.2

FUTURE OUTLOOK

In order to continue improvements and to consolidate reforms, Pakistan Railways is struggling to increase its competitiveness, responsiveness and efficiency. Pakistan Railways is planning to take a series of interlinked initiatives which will enable it to compete effectively in the fast growing transport sector in Pakistan.

However, Pakistan Railways should also implement new development projects and adopt better policies aimed at modernisation of Pakistan Railways.