Economic viability: Cabinet set to okay railways revamp plan, says minister
Bilour said that he had been assured by the prime minister that he would support the plan.
Terming the submitted proposals comprehensive, he said that the railways would continue to suffer the deficit till 250 locomotives were added to its fleet and that, too, as soon as possible.
Giving details of the losses, he said: “We have to pay Rs4 billion in interest annually to the State Bank for a Rs40-billion loan, adding: “We have already paid Rs30 billion to the State Bank as interest. We also have to pay Rs26 billion annually in salaries and pensions to workers.”
A major factor behind the losses is the railways’ inability to run a sufficient number of freight trains.
“Over 150 locomotives are urgently needed to run freight trains,” he said, adding: “At present, we have ... locomotives… hardly sufficient to run four cargo trains.”
Pakistan Railways has become a liability for the federal government as it has had to obtain funds from the latter every three months to pay workers’ salaries.
“We are not sure if we will be able to pay salaries in March,” a railways ministry official told The Express Tribune.
It was with great effort that the minister could arrange funds from the finance ministry to pay salaries for February.
“We are ready for its (railways’) privatisation as well,” was the official’s reply when asked for his comments.
A stay order obtained by US and Chinese companies against the procurement of locomotives was also a major cause of the railways’ deficit, he said.
On June 7 this year, the Lahore High Court issued a restraining order while hearing a petition challenging issuance of international tenders by railways for procurement of locomotives from US manufacturers.
Meanwhile, another move by the railways authorities to buy 75 Chinese locomotives, for which a powerful authority was overactive, has finally landed in the Supreme Court. The court has ordered Railways to submit the details of the proposed agreement with the Chinese company.
The idea of purchasing locomotives from China has already been rejected by the railways’ technical evaluation committee a few months ago.
The railways had a bitter experience with the same Chinese company in 2001 when it procured 69 locomotives without proper analysis and scrutiny.
The minister said that the government was trying to have stay orders quashed to begin procuring locomotives as soon as possible.
“The railways can only survive as a viable entity if it is allowed to buy the required number of locomotives,” the minister said.
Published in The Express Tribune, December 28th, 2010.
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