Railways attempts to revive freight service

Proposal awaiting approval from Ministry of Railways.

KARACHI: Cash-strapped Pakistan Railways (PR) is working on a plan to revive its freight service with the support of private firms. The plan is based on an agreement with strategic development organisation National Logistics Cell (NLC), three major terminal operators at Karachi Port, Pakistan-based Daudkhel Cement and a multinational oil company.

The private firms will provide Rs2 billion for modernising 20 diesel locomotives at PR terminals in Rawalpindi, Lahore and Karachi. Railways will also be securing Rs2 billion loan which it will use to pay its rent for two years.

When the financial health of PR improves, the balance will be returned to the organisations participating in the business plan. It has not been confirmed what the companies will receive in return for their loans.

The proposal is awaiting approval from Ministry of Railways and a decision is expected in two weeks, sources said. An official said each of the 20 locomotives will require Rs50 million to be modernised.  Once operational, they will be used to run freight train services from Karachi to rest of the country.

Once the plan is approved, Railways says it will collaborate with terminal operators Daudkhel Cement and Shell Pakistan in carrying out a survey on how to run a successful freight train service. PR has a stock of 16,499 freight wagons with a total capacity of 47,000 tons. Its accumulated losses since fiscal year 2006-07 now exceed Rs80 billion.

Published in The Express Tribune, August 23^rd,  2011.