Rs300m dues: Dispute between Railways, Business Express drags on

Both sides stick to their stance, train service not under threat, yet.

LAHORE:

A dispute between Pakistan Railways and the management of Pak Business Express, run by a private investor, over unpaid dues of Rs300 million is the main stumbling block to smooth operations of the business train.

The outstanding amount rose to this level following alleged favours won by the management of Pak Business Express from the previous government when it failed to pay Rs3.1 million a day to Pakistan Railways calculated at 88% seat occupancy.

At that time, Pak Business Express was paying around half of the agreed amount or even less, insisting the government should reduce the seat occupancy rate to somewhere around 60% as it was quite difficult to meet the expenses.

This led to many ups and downs in the joint venture between Pak Business Express and Pakistan Railways. On the one hand, the former was not depositing the money and on the other hand the latter was targeting train services.



Delay in departure until the deposit of required amount and the halt to Business Express services for 16 days were the major incidents.

In the meantime, Pak Business Express, a luxury service from Lahore to Karachi run by Four Brothers Group, succeeded in getting the occupancy rate reduced to 65% which also brought down the daily payment to Rs2.2 million. The matter was brought to the Economic Coordination Committee (ECC) of the cabinet in April 2012, which resulted in acceptance of the demand on March 7, 2013.

However, the matter of dues, which rose to Rs300 million by the time the ECC made the decision, is something that Pakistan Railways is not willing to give up as the committee did not clearly say from when the revision in seat occupancy rate would come into force.

“In our organisation, people are disappointed at the revision in seat occupancy, but we accept the decision but will not give any concession in unpaid bills,” said a railways spokesman while talking to The Express Tribune.

On the other side, Pak Business Express Director Operations Mian Shafqat claimed “we have to recover Rs110 million from Pakistan Railways, which we gave them for repairing coaches and for fuel purchase during the last fuel crisis.”

Apart from this, “we made initial investment of Rs220.5 million for infrastructure and locomotive repairs.”

These days no serious efforts are being made by both sides to put an end to the dispute, causing frequent delays in the train, which was once famous for timely departure and arrival.

The venture is profitable for both and they are willing to continue the service but on its own terms, it seems. Pakistan Railways is getting a handsome Rs2.2 million every day and Pak Business Express is earning profits, though it does not accept that passenger occupancy crosses 60% even in peak months.

The contract between them is another reason why they are willing to continue to run the venture. According to the agreement, Pak Business Express will lose its investment of Rs220.5 million if it fails to continue the service and in case Pakistan Railways fails to execute the contract it will be required to return the investment to the Business Express.

Published in The Express Tribune, October 5^th, 2013.

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