Govt breaches borrowing limit

ZAHEER ABBASI

ISLAMABAD: The federal government breached the borrowing limit on account of Pakistan Railways by taking a Rs 38.5612 billion loan from the State Bank of Pakistan (SBP), it is learnt.

Sources said that ways and means advance limit from State Bank of Pakistan (SBP) on account of Railways was fixed at Rs 4 billion, which has been breached by borrowing over Rs 38 billion in the wake of massive financial and administrative mismanagement in the Railways. The high-ups of Finance Ministry reportedly turned down the request of Pakistan Railways for additional Rs 20 billion during a recent meeting of Cabinet Committee on Restructuring (CCoR), presided over by Finance Minister Abdul Hafeez Sheikh. The Minister was quoted as saying that the fiscal side does not allow the government to lend or arrange more money from the SBP.

However, the CCoR agreed to approve Rs 0.6 billion for payment of electricity bill from the budget after management of Railways vehemently protested over reduction in electricity allocation to 0.5 billion from Rs 1.5 billion for previous year's budget. The reduction in allocation for electricity in the budget was totally unjustified on the face of huge increase in power price, an official of Railways said. The federal government has earmarked Rs 25 billion for Pakistan Railways in the budget, which is being released in amounts of Rs 2.3 billion monthly for pension and salaries, and no additional allocation as committed by the officials of Finance Ministry during the CCoR meeting.

Officials of Railways were quoted as saying that they are unable to pay for the spare parts used for minor maintenance of the locomotives lying in the workshops. The railways officials were told that the government would arrange Rs 6 billion through a consortium of commercial banks as the arrangement from the SBP was not possible. The Railways Minister wanted the federal government to take the responsibility of the interest payment. The money from the banking consortium is being arranged for rehabilitation of 96 locomotives, an official said.

The CCoR wanted Railways that the discontinued services of freight and passenger should be fully restored in the shortest possible time. Moreover, the CCoR also directed to further strengthen the Board of Railways with representation from all the provinces and inclusion of professionals and experts with strong mix from private and public sector to make Railways financially viable.