PR’s land offer sparks concern

Railways wants to give vast land for fibre optic cables to generate revenue

ISLAMABAD:

Pakistan Railways (PR) has offered a rail network of 7,791 kilometres for laying fibre optic cables in a joint venture with private sector investors in a bid to generate a new stream of revenue keeping in view its poor financial health, but it has raised concerns among policy circles.

It will open the floodgates to preferential treatment if PR is allowed to offer land for laying fibre optic cables, say policymakers while expressing fear.

In a meeting of the Economic Coordination Committee (ECC) last week, the Ministry of Railways pointed out that PR was offering an excellent opportunity for laying fibre optic cables along its track for digital connectivity across Pakistan.

It told ECC that PR had a network of 7,791 km, which passed through high-density population areas and connected major cities in the four provinces. “Owing to the strategic location of its infrastructure, PR offers an excellent opportunity for laying fibre optic cables,” it emphasised.

With overage assets and hefty pension bills, the ministry contended, PR’s financial health was deteriorating and unless new revenue sources were identified, the reliance on government subsidy would keep on growing.

Railways secretary was of the view that right-of-way charges on fibre optic cables would offer PR a decent source of earnings.

ECC was told that the government of Pakistan had promulgated Pakistan Telecommunication (Reorganisation Act) 1996, which specified that “the fee payable by a licensee to public authority, for the use of public right of way, would be such reasonable amount as was assessed by the public authority, after taking all relevant factors into consideration”.

Later, the government issued policy directives for the Act, titled “Public & Private Right of Way Policy Directives”, on October 9, 2020.

The policy directives stipulate that the public authority will not treat the grant of permission to licensees for the use of right of way as a means of commercial benefit, imposition of tax or revenue generation.

Under the new policy, land lease charges for the right of way have been drastically reduced, depriving PR of a potential source of earnings.

The Ministry of Railways recalled that due to PR’s poor financial health and limited earning sources, a summary had been sent to the prime minister on August 5, 2022 suggesting the adoption of the business model of laying fibre optic cables in a joint venture with private-sector investors on railway land.

The PM, while agreeing to the proposal, directed the Ministry of Railways to prepare a new draft policy in consultation with all stakeholders, which would have a positive impact on developing the digital economy, and place the matter before ECC for review.

The ministry proposed that Pakistan Railways may be allowed to lay fibre optic cables on its land in a joint venture with private parties in a transparent manner. ECC members discussed the matter in detail.

Ministry of Information Technology and Telecommunication secretary was of the view that if the government accepted the Ministry of Railways’ proposal, it might prompt other departments such as the National Highway Authority, electricity generation and distribution companies and development authorities like the CDA, DHA, etc to come up with similar requests.

“It will open the floodgates to preferential treatment,” the secretary remarked, adding that laws and policies on the use of right of way were clear and transparent and could not be applied discriminately.

The IT and telecom ministry did not support the railways ministry proposal on the ground that it would dent the telecommunication sector and also drastically reduce the government’s revenue.

Special assistant to the PM on finance noted that the premier had directed the Ministry of Railways to prepare a new draft policy in consultation with all stakeholders, which should be complied with in the first instance. ECC endorsed the view.

ECC considered a summary submitted by the Ministry of Railways titled “Pakistan Railways Optic Fibre Cable Right of Way Policy” and constituted an inter-ministerial committee, headed by the minister for law and justice and comprising Ministry of Railways secretary, for further consideration of the matter.

Published in The Express Tribune, January 19^th, 2023.

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