Flood route change brings big relief for rail contractor

Weekly payment reportedly cut by more than Rs10m as PR defends revision

LAHORE:

While floods have caused billions of rupees in losses and disrupted transport links across the country, a change in the route of Pakistan Railways' Shalimar Express has allegedly resulted in a significant financial concession for its contractor, according to sources.

Information obtained by Express News suggests that a railway bridge near Ferozewala was damaged by flooding, forcing Pakistan Railways to change the route of the Shalimar Express until the Faisalabad-Lahore section is restored.

According to sources, the train is now being operated from Lahore to Karachi via Sahiwal and Multan on the Main Line.

The route change has reportedly led to a reduction of more than Rs10 million in the contractor's weekly payment obligations.

Figures available to Express News show that the contractor was previously required to pay Rs7.166 million per day to Pakistan Railways, amounting to Rs50.167 million per week.

Under the revised arrangement, the daily amount has reportedly been reduced to Rs5.733 million, while the weekly payment has been brought down to Rs41.304 million.

Sources claimed that the adjustment would result in a direct revenue shortfall of around Rs1.433 million per day, or more than Rs10.3 million per week, for Pakistan Railways.

They further alleged that the concession had been granted because of the route change and raised questions about whether such an adjustment was permissible under the outsourcing agreement. Sources also expressed concern that similar requests by other contractors could lead to further reductions in the revenue generated through outsourced trains.

Pakistan Railways has been seeking to increase earnings from its outsourcing operations, which are considered an important source of revenue for the department.

The railway administration recently reported record revenue of more than Rs115 billion, while Federal Minister for Railways Hanif Abbasi and senior officials have been working to further improve the department's financial performance.

The reported adjustment has therefore raised questions about the impact of route changes on the railway's revenue targets.

However, a Pakistan Railways spokesperson rejected any suggestion that the revision was aimed at providing an undue benefit to the contractor.

The spokesperson said the change in route had affected passenger numbers and consequently the railway's revenue.