Losses top Rs125b: Pakistan Railways fall deep into red

145% deficit blamed on ‘weak financial position’.


Peer Muhammad May 09, 2014
CDA decides to take action against leaseholders for non-renewal. PHOTO: FILE

ISLAMABAD:


Pakistan Railways has incurred an accumulated loss of over Rs125 billion during the last five years of the Pakistan Peoples Party government, despite obtaining loans of over Rs86 billion from the federal government and other foreign sources.


According to a document presented in the National Assembly, the railways earned Rs97.19 during 2008 to 2013, spent Rs222.75 billion in the same five-year period – a staggering 145% deficit.

Pakistan Railways has piled up Rs86.19 billion in unpaid loans as well.

The ministry informed that these loans were obtained from the federal government, Chinese firms, including the Chinese Exim Bank, and the State Bank of Pakistan.

According to a breakdown, Pakistan Railways owes an amount of Rs40.79 billion to the federal government through the Economic Affairs Division (EAD) for 21 loans and to Chinese firms on account of four loans.

The railways ministry stated that EAD has extended the 21 loans to Pakistan Railways by borrowing from different international, multilateral and bilateral institutions and they are called re-lent loans.

It further informed the house that Pakistan Railways regularly paid off the periodic payments up to June 2010, returning Rs19.87 billion. However, owing to its weak financial position, the ministry could not make repayments then on. The government did repay Rs10.15 billion on behalf of Pakistan Railways.

In addition, it owes Rs45.4 billion to the State Bank of Pakistan account as well, which it could not repay “due to its weak financial position”.



Tender for new aircraft

Pakistan International Airlines (PIA) informed the house that two international companies have participated in the tender for the procurement of ten new aircraft for the national carrier. These companies included Qatar Aviation Lease Company (QALC) and KL-AeroParts, Bulgaria.

According to the PIA management, the offer from QALC met the requirement of the PIAC tender and therefore, was evaluated further.

It stated that upon signing of letter of intent (LoI) with QALC, PIA has paid a refundable security deposit of $200,000 per aircraft (US$ 1.6 million for eight aircraft in total).

Published in The Express Tribune, May 9th, 2014.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ