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Pakistan Railways Aims at Self-Sufficiency

Minister Khawaja Saad Rafique says PR will strive to overcome losses incurred due to floods with revenue generation measures such as leasing of land, tariff increases

by Sumeera Riaz

File photo of Khawaja Saad Rafique

This year’s unprecedented floods have impacted more than 33 million people, with over 1,700 dead, and caused hundreds of billions in damages to the country’s roads and railways, disrupting transportation networks. In the wake of the devastation—amounting to more than $30 billion in damages by some estimates—the Government of Pakistan has undertaken a global fundraising drive seeking support for reconstruction efforts. In this difficult situation, the Pakistan Railways led by minister Khawaja Saad Rafique has resolved to use its own resources to generate revenue that overcome the losses and mark a return to profitability.

According to statistics compiled by the Pakistan Railways, it has suffered Rs. 528 billion in losses due to this year’s floods—roughly Rs. 165 million/day due to suspension of transportation operations in flood-hit areas for two months—with 3,187km of tracks completely destroyed. Initial estimates call for Rs. 413 billion to restore 917km of track at ML-1-3; and Rs. 17 billion to restore two partially damaged tracks of 109km and 123km at Hyderabad, Mirpur Khas, Khokhra Par, Wazirabad, Sialkot, Quetta and Chaman.

Additionally, losses incurred to railways stations in Karachi, Sukkur, Quetta, Multan, Lahore, Rawalpindi and Peshawar divisions has been estimated at Rs. 6 billion, with Rs. 53 billion needed to repair signaling systems; Rs. 3 billion for offices; and Rs. 6 billion for communication towers. For comparison, only Rs. 45 billion have been allocated for Pakistan Railways in the federal budget 2022-23.

In an interview with Pakistan Standard, the Pakistan Muslim League (Nawaz) leader said his ministry was working on several revenue generation plans, including increasing fares; improving freight services; and rationalizing freight charges in line with market rates. The Pakistan Railways has also filed a petition in the Supreme Court seeking permission to utilize Railways land for commercial purposes.

Summarizing the proposal, Rafique said Railways land would be leased for the medium-term, with a minimum length of 15 years and a maximum of 30 years. He lamented that the “highly unprofessional and irrational” ruling by former Chief Justice of Pakistan Saqib Nisar—which had barred any leasing of Railways land for more than 5 years—had already caused losses of billions of rupees to the Pakistan Railways and needed to be revisited.

“In entire Europe, high-rise buildings were constructed on railways land with a vision and these are generating revenue now, but in Pakistan there’s an absolute dearth of vision for the use of railways land,” he regretted, vowing to adopt corrective measures that not only meet the ministry’s expenditures, but also make it a profit-making entity. “We plan to lend Railways land under green field vision where competitive parties will come through a transparent bidding process and set up commercial structures. Within 7 years, we’ll get the premium and after 20 years we can take our land back and give it to a new bidder,” he said, noting this was all contingent on the apex court’s permission.

“If allowed by the Supreme Court, Railways can earn three times more revenue annually than at present; we have prepared our case very strongly and hope to get some relief from the court,” he added. Babar Raza, the official spokesperson for Pakistan Railways, told Pakistan Standard that the ministry’s land could be used for all forms of commercial activities, including banquet halls, sports complexes, business centers and shopping malls, adding bids would be sought once the Supreme Court grants its approval.

Income and losses

According to minister Rafique, the charges for underpasses allowing access to private housing societies have also been increased from Rs. 1 million to Rs. 100 million each to boost revenue. He said the tough times called for people to share the national burden, noting that 60 million people were using rail services nationwide and the government had decided to increase fares for the business class while maintaining rates for the economy class.

Explaining the annual losses that Railways has been incurring, the PMLN leader said this was because travelers were being charged less than half the cost of operations. “From now, every train will generate income and we have also increased the number of train operations from 16 to 21, which is earning us Rs. 1,900 million per day,” he said. “The Pakistan Railways is also expecting 230 new coaches from China, which will revamp the train services and encourage a shift away from air travel,” he claimed.

Spokesperson Raza said both technical and non-technical staff of the Railways had been working in three shifts to restore operations for flood-hit regions of Balochistan and Sindh. Explaining that services to Balochistan had been impacted due to the collapse of a bridge, he said this would require approximately two-and-a-half months to fully repair. This was necessary for revenue generation, he noted, because the Quetta-Taftan section is used for freight to transport rice to Iran and return with cement. “We are planning to increase the number of freight services from 5-15 per month,” he said.

Thus far, he said, services have been restored for five passenger trains—Rehman Baba, Khyber Mail, PakBusiness, Karachi Express, Karakorum Express—in Sindh.

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