The writer is the former editor of The Express Tribune. He tweets as @tribunian
Granted that the railways has turned for the better. But to expect that this corporation would be making profits is a bit far fetched. The biggest drain on its financial health is the pensions and payments made to its ex-employees. Attempts in the past to bifurcate the corporation’s revenue streams have failed. A number of innovative approaches were used to make the railways profitable for sale but these attempts all ended in disappointment. The lobbies are too strong.
If anything, much of the lucrative assets of the railways have already been sold. Billions of rupees worth of real estate have already changed hands in deals that leave a lot to the imagination. So there is little room for the railways to look for financial recovery or rejuvenation. But the decision not to sell the railways is a political one and not an economic one. It goes against the stated policy of the government to sell loss-incurring entities so that the financial burden on the government, and by default on the taxpayer, is lessened.
As things stand, billions go into subsidising the workings of the Pakistan Railways. Despite the best efforts of the railways minister, and one has to grant him that Saad Rafiq has tried his level best at turning around this entity, Pakistan Railways is still a white elephant. Thousands of people are employed but this is much higher than what its requirements are.
Much of the profit-making arms and those departments that helped it financially are in a shambles. Possibly the worst period that the railways saw was in the tenure of General Musharraf where a number of decisions were taken to favour one or the other. The competence of the railways minister at that time has also been a subject of much debate. But that isn’t anything new.
Apart from the ballooning non-operational costs, the other challenge for Pakistan Railways is pilferage and corruption. Ticketless travel is a norm and millions are siphoned away under one head or another. Economically viable projects which involve the private sector are made to fail. In this, the unions supported by the government have an important role in the rising losses. Any attempt to make honest money are thwarted.
Despite his best intentions, Saad Rafiq cannot take a decision that technically should be one for the federal cabinet. He cannot commit not to sell a loss-incurring mammoth enterprise, that is costing billions to the government and to the taxpayer only because it helps his politics. We cannot be bankrolling his political ambitions or career.
Then there are fundamental contradictions. The railways also cannot be operator and regulator of the industry at the same time. This is why the private sector, despite its best intentions, has been unable to make any headway.
The railways minister says that revenues are expected to rise from Rs18 billion to Rs40 billion by the end of this fiscal year. But what about the losses? Is anything being done about that? Also, why are we stalling on the sale?
If the same logic is applied to other entities then the government has no grounds to sell PIA or public sector utilities. This confused policy also gives mixed signals to investors. As a result of this muddled approach, Pakistan Railways is bereft of capable management with the result that it has been losing passenger traffic to the road sector consistently over the past two decades despite its monopoly.
While it is impressive that the number of locomotives for the freight sector has increased to 90 from 8 in 2013 and that the number will rise to 150 locomotives in the next three months, the question is what has been done about passenger traffic which has dwindled. If this is a national institution, what actual benefit is the general public getting? The way things stand, many now prefer coaches to railways. It is a long journey for Mr Saad Rafiq and one in which he has many lessons to learn.
Published in The Express Tribune, April 10th, 2017.
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