Oct 24 - 30, 2011

Pakistan Railways now seems to have arrived at the brink of collapse. It remained totally paralyzed on Monday last week as the employees observed a countrywide wheel jam strike in protest against nonpayment of their salaries and pension for the month of September, which should have paid to them on first of October 2011. They resorted to this extreme step after waiting for more than two weeks during which they had been making verbal protests to the relevant authorities.

The top management of the railways informed the ministry of finance and other relevant authorities well in time that they had no money to meet this obligation and the required funds might be arranged urgently.

They also tried to have an audience with the Prime Minister or the President for seeking their help but could not succeed till the wheel jam strike by the employees.

President Zardari called the minister for railways and his team and then directed the finance ministry to immediately release one billion rupees to Railways for payment of withheld salaries and pension of the employees.

The employees ended the strike after the government released one billion rupees for their salaries. The President then held a detailed meeting with the railways minister and his team of officials. In the detailed briefing, the President was informed that the Railways was in a very bad shape. The system was almost collapsing. It could be imagined from the fact that by mid August this year, against 324 passenger and freight trains in 2008, only 128 trains were on the track. The Railways was facing serious financial crises and its operational deficit has reached to Rs40 billion. During the fiscal year 2010-11 it earned total revenue of Rs18.3 billion against the budget target of Rs28 billion .

Up to now, during the current year, the revenue has further dropped to only Rs12 billion. Against the demand of Rs40 billion badly needed to purchase new locomotives, repairing the old ones and for urgently required trac-repairs, the government had pledged in July last a package of Rs11billion to bring the Railways back on track but still the government has not released a single penny to the organization so far, the president was told.

Besides immediate release of one billion rupees, the president has also advised the government to arrange a loan of six billion rupees for locomotives repairs and purchase of new locomotives. The loan will be used only for this purpose and will not be diverted for any other purpose.

The president gave this directive when the railways minister, Haji Ghulam Ahmad Bilour told†him that because of†non-availability of locomotives, the freight trains have been suspended and the revenues from cargo transportation had come down from nine billion rupees a year to almost zero at present. He explained to the president that the cargo service was the most critical factor of Pakistan Railways to generate finance not only to support it but also to make profits.

Federal minister for railways who was accompanied by the secretary railways, Javed iqbal and the general manager Pakistan railways, Saeed Akhtar briefed the various causes that contributed towards the deterioration of the organization and the various options to resuscitate it. The meeting was informed that it was due to the lack of investment consistently specially during†the past two decades or so that the organization has deteriorated to this extent. At present, about half of the total locomotives are out of order, 86 percent of the bridges are more than 100 years old and need major repairs, signaling system is obsolete, telecommunication system is outdated and the track over-aged.

The organization is indebted to the tune of over Rs40 billion on which it is paying over Rs350 million as interest every month. The railways minister who belongs to the Awami National Party (ANP), a coalition partner of the PPP led government complained to the President that despite repeated requests, appeals and protests the government paid no attention and did practically nothing to rescue the organization during the last four years. It was in July last that a meager package of Rs11billion was approved to bail out the railways but even that was not released.

What the president has offered--a grant of one billion rupees and a direction to arrange a loan of six billion rupees for repairs of locomotives--is just a peanut which is not going to help in saving the railways from collapse. According to some insiders, the present indifferent attitude of the government towards the most serious problems of railways is deliberate and on purpose. Some high-ups in the incumbent government are keen to create conditions justifying its privatization and make some money through commission and kickbacks through obliging some friends and cronies. Otherwise, if the government can provide Rs90 billion in the current year budget to Benazir Income Support Program despite most tight financial conditions, it can also arrange an equal amount to save a national organization of great public importance like Pakistan railways.