Thursday, December 16, 2010

Railways heading to bankruptcy

LAHORE – Despite bad reputation and slow delivery, the Pakistan Railways has additional consignment of at least 50 goods trains, though it has been able to ply only four to five trains daily due to shortage of locomotives, forcing the leftover consignments to divert to the road transportation.
As a result, the PR is losing around Rs 45-50 billion for not having the needed capacity, as one freight train, carrying oil, earns up to Rs 1 billion annually, it was learnt.

If the government provides 200 engines the Railways can get out of losses and if 400 locomotives are given the PR will turn into a profit-earning entity, officials said.

They said that in the last budget NHA had earmarked Rs 46 billion and it earned only Rs 6 billion annually while the PR was allocated Rs 13.5 billion and it collected revenue of Rs 25 billion.
The Railways raised its fares in Dec 2008 when the oil prices were Rs 54 per litre and now it reaches over Rs 75 per litre. The whole trainsÆ network consumes around 400,000 litre oil daily, translating into a loss of about Rs 22 million under the head of subsidy on oil, as the department is public service entity and cannot raise fares on its own, they added.

Officials said that 40 trains earn 80 per cent of the total passenger trains revenue; 72 trains collect 15 per cent and alarmingly 122 trains contribute only meagre ratio of 5 per cent.
The officials said that the Railways has continuously been declining its market share not due to less demand rather owing to limited drive.
Presently it is moving only 11 per cent of the total petroleum products and 2 per cent of the total containers service, they said.
The national highway carries 96 per cent of the freight and 91 per cent of passenger traffic, they added.
So a more professionally-managed and a free and independent PR is needed, they said and added that demand is on the rise because it is six time cheaper than that of road transportations, as one rail engine pulls about 2,000 ton of freight but the same goods will be carried on the road by six engines, which definitely will emit six times extra pollution. So the rail transportation is not only safe and cheaper but also environment-friendly.
The NATO trailers damaged the countryÆs road network of around Rs 40 billion, they said.
On the other hand, they said, the PR is in dismal condition and due to the financial problems many routes have been already discontinued. The recent floods added to the miseries of the department, as several hundreds km of lines were washed away.
The Pakistan Railways presently is on the verge of bankruptcy owing to shortage of locomotives, coaches and operational expenses, officials said.
They said that the PR is the only organisation which pays pension of Rs 10 billion to its retired employees from its own earnings.
Hence, Rs 21 billion is spent on wages and pensions every month leaving the PR very paltry amount for maintenance of the trains and other operational expenses.
The redundant Railway line and other infrastructure lay unguarded for many years, resulting into a theft of steel fittings and a significant length of tracks, they said.
The Acting GM Behzad Mehmood said that Pakistan Railways has about 87,000 employees and 71 per cent of the total employees are working in civil, mechanical and transportation departments. Thought the department has suspended 13 passenger trains so far but it is unable to rationalise its staff with the ratio of its reduction in operations as it is the public service entity, he said.

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