Govt to rehabilitate trains under consortium deal
PM says ‘business as usual’ is not acceptable anymore.
ISLAMABAD:
In an effort to save Pakistan Railways from collapse, the government has announced that it will sign an agreement this week with a banking consortium, to raise Rs6.1 billion for the rehabilitation of 96 scrapped locomotives.
The decision was taken at a meeting here on Wednesday, chaired by Prime Minister Yousaf Raza Gilani.
Gilani directed the ministries of finance and railways to make sure that current and former employees get their salaries and pensions every month. Large scale protests over non-payment of salaries and pensions led to trains being halted across the country in October. Following the crisis, the finance ministry released Rs1 billion in emergency funds.
The meeting also decided that the public-private partnership-based freight operations would be conducted by the Federation of Pakistan Chamber of Commerce and Industries (FPCCI) from December 25 this year.
Finance Minister Dr Abdul Hafeez Shaikh told the meeting that the availability of locomotives would significantly improve the efficiency of Pakistan Railways in terms of earnings and facilitating people.
The meeting was also informed that non-economical routes would be closed.
The provision of diesel for railways’ locomotives will be ensured and the credit limit from the Pakistan State Oil will be doubled to ensure functioning, the minister said.
Gilani said the restructuring of Railways would be done on a priority basis under the guidance of the Cabinet Committee on Restructuring.
Restructuring PIA
Chairing a separate meeting on the restructuring of Pakistan International Airlines (PIA), Gilani expressed anger at the management of the national flag carrier for bad corporate governance and accumulating losses.
“Business as usual is not acceptable. Improvements in corporate governance, services and financing are required,” the premier said, rejecting that the government would be putting more money to offset PIA’s losses which have already crossed Rs100 billion in the past three years.
The prime minister also constituted a committee led by Shaikh to prepare a report within a week, outlining a roadmap for making a turnaround for PIA. The defence ministry, which is the legal majority shareholder in PIA, had requested a Rs60 billion bailout package, which included about Rs32 billion worth of debt restructuring. In a meeting late last month, the finance ministry agreed to earmark Rs32 billion to restructure the airline on request, but refused to inject money.
Published in The Express Tribune, November 4th, 2011.
In an effort to save Pakistan Railways from collapse, the government has announced that it will sign an agreement this week with a banking consortium, to raise Rs6.1 billion for the rehabilitation of 96 scrapped locomotives.
The decision was taken at a meeting here on Wednesday, chaired by Prime Minister Yousaf Raza Gilani.
Gilani directed the ministries of finance and railways to make sure that current and former employees get their salaries and pensions every month. Large scale protests over non-payment of salaries and pensions led to trains being halted across the country in October. Following the crisis, the finance ministry released Rs1 billion in emergency funds.
The meeting also decided that the public-private partnership-based freight operations would be conducted by the Federation of Pakistan Chamber of Commerce and Industries (FPCCI) from December 25 this year.
Finance Minister Dr Abdul Hafeez Shaikh told the meeting that the availability of locomotives would significantly improve the efficiency of Pakistan Railways in terms of earnings and facilitating people.
The meeting was also informed that non-economical routes would be closed.
The provision of diesel for railways’ locomotives will be ensured and the credit limit from the Pakistan State Oil will be doubled to ensure functioning, the minister said.
Gilani said the restructuring of Railways would be done on a priority basis under the guidance of the Cabinet Committee on Restructuring.
Restructuring PIA
Chairing a separate meeting on the restructuring of Pakistan International Airlines (PIA), Gilani expressed anger at the management of the national flag carrier for bad corporate governance and accumulating losses.
“Business as usual is not acceptable. Improvements in corporate governance, services and financing are required,” the premier said, rejecting that the government would be putting more money to offset PIA’s losses which have already crossed Rs100 billion in the past three years.
The prime minister also constituted a committee led by Shaikh to prepare a report within a week, outlining a roadmap for making a turnaround for PIA. The defence ministry, which is the legal majority shareholder in PIA, had requested a Rs60 billion bailout package, which included about Rs32 billion worth of debt restructuring. In a meeting late last month, the finance ministry agreed to earmark Rs32 billion to restructure the airline on request, but refused to inject money.
Published in The Express Tribune, November 4th, 2011.