As locomotives creek along the tracks throughout Pakistan, death looms close by. Once called the lifeline of the country, Pakistan Railways (PR) is in desperate need of life support itself. Under threat not just from competition but also incompetence, if the state-run organisation is not bailed out, it will soon be unable to run its tracks.
Struggling under the weight of decades-old locomotives, an announcement by none other than the Prime Minister himself, granted a bailout package of a whopping Rs 12 billion to the ailing state-run transporter. That was six months ago.
Senior management at PR, who were not available for comment, are crying wolf about its inability to deliver on its services, if the remaining more than Rs 11 billion is not immediately released.
At the same time, plans to increase passenger fares by 10~30 percent have been challenged by parliamentarians. And the reported import of new locomotives from China and the US are sub judice on alleged corruption charges.
The once-classic example of natural monopoly, rail transport has been shedding market share around the world to its key competitors, airlines and land transportation, around the world; and Pakistan is no exception to the rule.
Perhaps the most significant strategic policy lapses, as far as the demise of PR is concerned, was the creation of the National Logistics Cell in the late 70s and the subsequent subsidy on diesel. While the first created competition within the state-owned machinery, the second provided a competitive advantage to trucking business over rail networks.
Systematically, policymakers in Europe and Asia, have envisioned and executed commercially driven business models that have turned traditionally loss-making railway organisations into thriving profitable enterprises.
Perhaps the most celebrated turnaround is that of Indian Railways. Policymakers in India, like many before them in other countries, viewed the importance of freight transportation as the basic purpose of rail networks.
Improving freight transportation, employing customer friendly policies and making the process more efficient led to little or no affect on passenger fares. Yet, train routes that were unprofitable were cut off without discrimination.
In Europe, the most prominent model is the separation of railways infrastructure and services. While the track, signal systems and traffic is regulated by government, operation of trains, catering services etc are open to commercial firms. This model has been very successful in many EU countries.
The present condition of Pakistan Railways may well be beyond repair and restoration, as the majority of its locomotives are defunct or need repairs to become operational.
For starters, rationalising human capital and off-loading the many thousands of acres of public land may be a good move to find some breathing space.
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