KARACHI: The newly launched public-private venture between Pakistan Railways (PR) and Four Brothers to operate Pakistan’s first ever 'business train', the Pak Business Express, is in trouble a week into operation.
The Railways administration has decided to consult its legal team to review their agreement after the company failed to pay railways as per contract.
According to the contract between Four Brothers and PR, the private partner has to pay railways nearly Rs3.1 million per day. Failure to make timely payments would create a backlog, which till February 8, had risen to Rs 10.05 million.
General Manager Railways Saeed Akhter while talking to The Express Tribune, said that the company had so far paid Rs5 million in separate payments of Rs2.5 million each. Railways, Akhter said, was not in a position to allow such a payment schedule due to its own financial crunch. “I will call upon our lawyer today (Thursday) to discuss what we can do in this regard,” he said.
Akhter said that the main purpose behind the railways getting involved in such a joint venture was to ensure that regular payments to railways were made and offer some relief and generate additional revenue.
The second reason, he said, was to give commuters quality service. “Service is also important, but more important is the revenue generation for us,” the PR GM said
The Express Tribune tried to contact the management of Pak Business Express, but to no avail.
The business train started its first journey to Karachi on February 3, after being inaugurated by Prime Minister Yousaf Raza Gillani. Its regular train service started the following day. However, since its inaugural, the pricing of the Business Train has surfaced as a major sticking point. The management is currently planning to revise its packages to attract more passengers. One way ticket price was set at Rs5000.
The company has so far invested around Rs 150 million in the project just in renovating and upgradating old PR coaches and a business lounge at Lahore Railway station.
Akhter said that the company as per agreement is bound to invest a total of Rs 220 million, in which they will also construct a business lounge in Karachi since railways had no space to provide them at the Karachi station.
COMMENTS (15)
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I have booked 5 returned tickets for 18th Feb 2012. Received 5000 discount. One thousand per ticket. Total investment is rs. 45,000.
Today, I heard in Geo news that Court call executives of Pak Business Express on 16th.
I can just pray that we can have our journey on 18th otherwise all our plan for vacation will be mess.
Thanks to Corrupt Pakistan Railway Executive and Corrupt Ministers.
@Salim, why do you hide behind that name you Indian...we have the best institutions in the Asia and our heavy industry is world reknowned...pls go and sell your ideas elsewhere...
Pakistan is the greatest! Allah is the Greatest!
Indians...watch out...we're coming for you
Takemeel e Pakistan
@Salim:
Its not a matter of aptitude, rather will, which ruined all institutions in our country.
Reminds me of the ' green bus ' fleet, started by a private part in Karachi and due to petty problems created by vested interests, a people friendly scheme died.
Pakistanis come on, if Lalu Prasad Yadav can turn around Indian Railways, so can you.
I think we in Pakistan should hire some experts fron India to run our Railways.We have miserably failed to properly manage any organization e.g. PIA.Railways, Pak Steel MiIl,Wapda to name a few.How can we manage to run the country?
@Cautious: "It would appear this venture was under capitalized from the get go – sad state of affairs when you can’t even afford to operate one day without default."
IT may not be default. Even an ordinary person gets 25 days to pay their credit card bill. It is called grace period. HEre 5 days after start f service default is being claimed? This could be simply a start-up logistical/operational issue.
This attitude towards private investors in infrastructure is not conducive to inviting more private sector investment in infrastructure for sure.
It would appear this venture was under capitalized from the get go - sad state of affairs when you can't even afford to operate one day without default. Doesn't anyone know how to put together a proper business plan in Pakistan?
Ehsan@ business train would earn 2.5 million from a single route i.e. from Lhr to Khi, whereas the train is running simultaneously from Lhr- Khi and from Khi- Lhr, so it makes around Rs 5 million per day if operate both with full capacity, from these 5 million , railways share is Rs 3.1 million.....
How is it possible... Train has capacity of 500 and one way fare is 5000, gives company 2.5 million fare maximum one way, and one way journey is 18 hours... do the math
how can they commit to pay 3.1 million per day to railways
Having 17 Couches connected , they will earn upto 6 million per One way. No body raised question How can they Charge for A/C in this season. They have mentioned Deprture time but no surity of arrival time. The management failed to assure commuters that it will pay back in case of delayed.
No body cares nation its only money everybody after???
Ridiculous! Railways should not ask for any payments till a certain capacity utilization is reached. As payments depend on cash flows from tickets, the morons at PR should base payment demands on capacity of the operator to pay rather than insist upon payment of Rs 3.1 million per day. This seems to be another doomed project due to ineptness of PR.
Did somebody say 'payments'?
I thought 'commissions' were enough!
Itsthe money he didn,t paid to GM Railway and Minister, no one in pakistan bother for national interest
“Service is also important, but more important is the revenue generation for us,” the PR GM said. This sums up the reason for the failure. We in pak have the cheapest moral values and all we care is more money be it railways, politicians or "real masters" of this country. The result we are a broken failed economy with every industry on verge of total collapse and foreign "taller than mountain friends" are in almost total control of assets, finances, natural resources and industry. This stupid business rail was destined to fail from day one. More public money wasted on cheap gimmicks.