LAHORE: Employees of Pakistan Railways Advisory and Consultancy Services (PRACS), an ancillary of Pakistan Railways, have expressed suspicion and are planning to approach the court to prevent the release of the sanctioned loan of Rs6.1 billion for the railways, fearing the money will put credibility of PRACS at stake.
However, on the other side, the management of Pakistan Railways and PRACS, following approvals, guarantees and submission of documents, are anxiously waiting for the release of the loan.
The employees, under the cover of PRACS Employees Association, are of the view that the loan will not be used for the repair of locomotives and may be misused by railway officials. The association represents lower as well as some high-ranking officers of PRACS.
Cash-strapped railways got the Rs6.1 billion loan in January through its profitable ancillary PRACS. PRACS was chosen for the purpose as no bank and financial institution was ready to trust the loss-making railways.
The loan, provided by the National Bank of Pakistan through a consortium, has been extended for a five-year period at an interest rate of 13%. PRACS will pay back the loan in 10 biannual installments with guarantees from the railways and finance ministry.
With the loan, PRACS will rehabilitate about 96 locomotives and has already selected five retired and on-duty engineers for the job.
Talking to The Express Tribune, Employees Association President Khalid Bashir said total assets of PRACS, including properties, were merely worth Rs1 billion and was surprised over the approval of the loan.
“Why PRACS is being awarded with such a huge loan for such an entity where trust is lacking due to corruption scandals,” he asked.
Bashir, who is director commercialisation in PRACS, said the railways had taken responsibility for repaying the loan but questioned from where it would arrange the money for paying huge installments, when it itself was relying on government support to pay salaries and pensions to the employees.
“We will file a petition in the Supreme Court to block the loan, which may lead PRACS to bankruptcy, putting the future of over 800 employees at stake,” Bashir added.
PRACS has hired some retired officers of the railways on key posts at high salaries for the project. “What these officers will do after retirement when they did not deliver anything significant during their service,” he asked.
Talking to The Express Tribune, PRACS Managing Director Junaid Quraishi, however, stressed that the employees had nothing to do with such matters and if they wanted to go to the court they were not restricted.
“I take responsibility for saving PRACS. All documents and guarantees have already been signed by the railways and finance ministry,” he said.
Without locomotives, railway operations would discontinue and if this happened, then how PRACS would continue to run, he asked. “We hope that the bank will update us about the loan on coming Monday as we have already waited for a long period.”
Quraishi said PRACS would rehabilitate about 36 locomotives in the first year and after repair each locomotive would give the railways revenue of around Rs3.5 million per day.
Railway officials are waiting for the release of the loan, but their hopes are alive as the Economic Coordination Committee (ECC) has once again given the go-ahead.
Published in The Express Tribune, March 31st, 2012.