Pak Business Express: A short-lived dream turned nightmare

Railways takes commercial control, private company still looking to engage in battle

LAHORE: After a lengthy legal battle, Pakistan Railways has managed to prevail. It grabbed commercial control of the Pakistan Business Express, which was once hailed as a project exemplifying public-private partnership.

One cannot predict the eventual outcome of this takeover for consumers, but this joint-venture could have spurred the required competition in the railway sector.



It could have also brought some much-needed cash for Pakistan Railways, desperate to rid itself of the ‘while elephant’ tag.

However, as fate would have it, the Pak Business Express has seen its commercial management change hands.

Four Brothers Private Limited, handling the affairs of Pak Business Express, have now been reduced to mere spectators as the legal battle intensified, culminating for now with Railways emerging as the victor.

The private company’s move to ‘reclaim an excess payment of Rs120 million’ via court proved lethal. The Supreme Court of Pakistan, in its brief order, had called for arbitration, but at the same time vacated the years-long stay order obtained by the management of Business Express over the occupancy ratio issue.

The ratio was initially set at 88%, which meant Pak Business Express was to hand over 88% of its earnings to Railways, and meant the daily rental amounted to Rs3.1 million. The occupancy ratio was then revised to 75%, after the Economic Coordination Committee (ECC) intervened, bringing down the daily rental to Rs2.2 million.

However, Railways never accepted the terms and said the ECC was not the “right platform” for the issue.

To date, Railways claims an outstanding amount of Rs2.22 billion at 88% occupancy ratio. The private company says that it has given around Rs3 billion already.

When the company obtained a stay order, Pakistan Railways had to step back and allow routine operations.

In the meantime, however, Railways continued making efforts. It introduced the Green Line train to upset competition, announcing that three similar projects were in the pipeline as well. It announced that its losses had reduced and looked at a potential turnaround.

Competition was getting intense

But with Railways seizing control of the Pak Business Express, many think the fight is yet to end.

The former management of Business Express is consulting their lawyer for further action.

“We are now consulting our legal team for further course of action,” said Pak-Business Express Director Operations Mian Shafqat Ali.

Pakistan Railways, on the other end, seems certain with regards to the outcome. “The only possibility for negotiation is to pay the outstanding dues. We are waiting for detailed orders, but the group will have to pay dues of around Rs2.22 billion,” said PR Senior General Manager Operations Javed Anwar.



Whatever the outcome, the fact remains that the project, touted as a landmark in public-private partnership, was unique for Pakistan in the railway sector.

It met the same fate most projects do when things are not thought through – a short-lived dream that serves as a nightmare. Nothing else.

The writer is a staff correspondent

Published in The Express Tribune, November 23^rd,  2015.

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