Pakistan Railways is set to raise its fares by 10 to 30 per cent in a bid to avert bankruptcy.
“The rail fares will be raised by 10 to 30 per cent shortly to generate funds to meet its operational expenses,” said General Manager Pakistan Railways (PR) Ishaq Khattak, at a meeting of the National Assembly’s Standing Committee on Railways.
The committee, which met in Islamabad with MNA Ayaz Sadiq in the chair, also unanimously passed a resolution, requesting Prime Minister Yousaf Raza Gilani to release a bailout package of Rs11.5 billion for the railways.
While briefing the meeting, Khattak said that the federal cabinet had approved an increase in rail fares in July last year, adding that the decision was later reversed. He said that the government again approved an increase in fares and the ministry is waiting for a notification in this regard.
Despite the announcement of the bailout package, the total sum that has so far been released is just Rs1.2 billion, adding that the amount was “peanuts”.
Khattak said that the proposed hike in rail fares is being finalised, under which fares of passenger trains would be increased by 10 per cent, express trains by 20 per cent, non-stop rails by 25 per cent, freight trains by 30 per cent, and inter-city rail fares would be increased by 15 per cent.
He said that the proposed raise would generate an additional revenue of Rs2.30 billion annually.
Highlighting the railways’ precarious financial situation, the general manager said that even the State Bank had declined to extend an overdraft facility, contending that the railways had already borrowed Rs40 billion from government banks to meet its operational expenses.
Khattak said that because of lack of funds, PR has been unable buy or repair its locomotives, adding that despite having a fleet of 500 out, only 156 are currently in working condition.
He said that PR has had to suspend train services in some parts of the country to curtail losses.
In addition, the announcement of a 50 per cent increase in salaries and pension allowances has also contributed to the losses. Khattak said that there were 800,000 employees working in the railways and 20,000 of them were surplus.
The committee also took serious notice of the absence of the railways’ legal director.
Published in The Express Tribune, January 14th, 2011.