Railways needs $35 billion for complete uplift, says minister

Khawaja Saad Rafique states CPEC investment of $10 billion will not be enough

LAHORE: Cash-strapped Pakistan Railways is likely to continue facing financial woes even after CPEC pours investments and upgrades to the tune of $10 billion to its infrastructure.

The blunt admission of how poor the state currently is came from federal minister Khawaja Saad Rafique who said that even $10 billion would be insufficient for an organisation as big as Pakistan Railways.

Rafique said that Railways needs $30 to $35 billion - approximately 10% of Pakistan’s economy - to upgrade its entire ecosystem and bring it at par with railway networks of developed countries.



“Previous governments failed to upgrade the railways network,” said Minister of Railways Rafique during a press conference on Thursday. “In fact, people looted the most out of this sector.”

A recent agreement under CPEC promises improvement in the railways infrastructure around ML-1, but Rafique, who has held this portfolio since 2013, said a revamp of the entire organisation needed around $35 billion. “And the cost will increase each passing day,” he added.

He said that currently, Railways is a 157-year old corporation on technology that is 100 years old. However, with the recent agreements under CPEC, improvements in railways infrastructure will be seen.

Pakistan Railways has signed a frame work agreement with the Chinese ministry of transport to upgrade ML-1, covering Karachi-Peshawar track. The cost of this project is estimated at around $10 billion and it includes doubling the entire track for faster transportation of passenger as well as goods trains. The existing speed of trains on ML-1 stands in between 60km/h to 120km/h, which, after up gradation, will run in-between 120km/h to 160km/h.

Other than up-gradation; the project includes renovation of Karachi cantonment and Lahore railways stations as per international standards, construction of walls on populous areas along the track, fixing the issues of un-manned level crossings, up-gradation of rolling stock which includes locomotives, as well as freight coaches, construction of Havelian terminal and up-gradation of Walton academy.

China will also construct mass transit railways network in metropolitan cities of the four provinces.

Rafique added that the Asian Development Bank has agreed to grant a long-term concessional loan to railways to open another 11 lines, which will be built on the Built-Operate-Transfer mode.

“After signing these agreements, the next step for us is to wait for financial closures, we will try our best that the interest rates do not go above 2%,” Rafique said.

“Timeline of this project is from five to six years, and once completed it will bring positive results in railways network and ultimately, to the overall economy,” he added.



Rafique said growth in revenues is not enough to transform Pakistan Railways. “We have managed to earn Rs36 billion in the last fiscal year. But one needs to understand that 74% of revenue goes to financing salary and pension expenditures. Around 15.75% is spent on fuel and the residual has to manage all other expenses.”

Published in The Express Tribune, May 19^th, 2017.

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