Commercialization improves financial condition of Pakistan Railways

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ISLAMABAD: Commercialisation is contributing alot to improve financial health of Pakistan Railways, officials said.

The Pakistan Railways (PR), as a state-owned enterprise, enjoys monopoly over rail transportation in the country, but its financial health is not ideal due to a variety of reasons.

According to WealthPK, current government is striving hard to improve the entity. In a recent meeting of the Senate Standing Committee on Railways, Minister for Railways Azam Khan Swati emphasised the need for commercialisation of railway stations to ease the institution’s financial problems.

Poor infrastructure, insufficient investment, old technology and inadequate policies have resulted in a massive annual deficit for railways. Structural reforms and investment are critical for the revival of PR.

According to a recent report of PR, it provides employment to over 67,000 people, costing over Rs29 billion per year. On the other hand, pension payments cost approximately Rs37 billion annually. PR’s revenue reached Rs48.65 billion in FY2020-21 against Rs47.58 billion in FY2019-20. Its losses have reached over Rs30 billion.
Under the Public Sector Development Program (PSDP), Rs30 billion budget for FY21-22 has been allocated to ease the financial difficulties of PR, against Rs24 billion for FY20-21.

Transformation of poor infrastructure is the main way to bring PR on right track, which requires huge allocations, WealthPK reported.
The Railway Ministry is keen to develop the rail network between Chaman and Taftan to benefit from freight operations.

The Rs600 billion railway track from Quetta to Taftan can be developed if the Balochistan government contributes Rs15 billion from its budget, Azam Khan Swati remarked.
Under the present government, PR has outsourced commercial management trains to private sector under public private partnership (PPP).

The main goal of outsourcing the trains was to improve passenger comfort while also increasing income for the department.
According to official documents, Pakistan Railways owns 168,858 acres of land across the country, including commercial, residential and agricultural land. During FY2019-20, PR has earned approximately Rs214 million by leasing railways land in various parts of the country.

A robust train system is critical to the country’s economy, which is reliant on competent, affordable, and efficient railway infrastructure, including new engines, bogies, tracks, and bridges.

The China-Pakistan Economic Corridor (CPEC) project is being hailed as a game-changer for PR since it would help enhance railway infrastructure and increase train speed, according to WealthPK.

To benefit from the ideal geo-strategic location, PR has also resumed the Pakistan, Iran and Turkey freight train operation. The government  hopes to extend this freight operation to Europe.

The immense potential of railways for promoting economic development and good relations with regional countries through rail network connectivity must be fully utilised. -INP