Railways to raise fares to meet operational cost

The rail fares will be raised by 10 to 30 percent shortly to generate funds to meet the operational cost of Pakistan Railways (PR). General Manager PR, Ishfaq Khattak informed the National Assembly's Standing Committee on Railways that Cabinet had approved an increase in rail fares during a meeting in July 2010 but reverted its decision after sometime.
Recently, the federal government gave green signal to increase fares and PR is waiting for written directives, he said. Giving a briefing to members of the committee, he said financial position of PR is very weak. He said even the State Bank of Pakistan has declined to extend over draft facility to PR on the grounds that it has already borrowed Rs 40 billion from government banks to meet its operational cost.
The General Manager PR informed the National Assembly's Standing Committee on Railways on Thursday that "We told SBP that we would repay the borrowing in due course", he added. Khattak revealed that several meetings were held to turn Railways into a profitable organisation but the ground reality is different. On December 29, 2010, cabinet advised the Finance Minister to provide necessary funding to PR in consultation with the Minister for Railways.
It further directed to hire the services of SBP in chalking out a financial strategy to make Railways a viable entity. The Governor State Bank fully endorsed the plans designed by Railways on how to provide competitive, safe, reliable and market oriented mode of transport, as a business enterprise based on financial viability of train operations to maximise revenues while safeguarding public interests.
Despite, Prime Minister's announcement of Rs 11.5 billion bailout package for PR, no money has been received yet. Mega development projects worth Rs 13.5 billion were approved in Public Sector Development Programme 2011. Unfortunately, due to financial crunch railways did not receive much. "In the first six months of financial year 2011, the releases to PR stands at Rs 1.2 billion which is peanut," he said.
Khattak said railways not earning enough to buy or repair locomotives and out of 500 currently 156 are in working condition; the rest are irreparable. He further said PR has to suspend train services in some parts of the country in order to curtail losses. A substantial time has passed but no commitments have materialised to compensate damages to assets in Sindh in December 2007. In addition the announcement of a 50 percent increase in salaries and pension allowances has worsened the situation.
He disclosed to the committee that Prime Minister constituted Cabinet Committee on Restructuring (CCOR) on March 2010 with a view to restructuring the railways but there is no evidence of any further movement in this regard. On December 29, 2010, the federal cabinet took note of the delay in the implementation of its decision pertaining to the restructuring of the major public sector enterprises including PR.
The committee unanimously passed a resolution and requested the Prime Minister to release Rs 11.5 billion bail out package for PR as soon as possible otherwise railways operation will come to a complete halt. The committee also passed instructions to General Manager to the effect that all the divisional superintendents' be directed to have a detailed meeting with the members of parliament to workout the schedule of trains and to take them into confidence before closure of any passenger trains.
The committee also took serious notice of the absence of Director Legal Railways and stated that if he did not attend the next standing committee meeting, the committee would summon him as per rules of procedure of National Assembly. The meeting was chaired by Sardar Ayiaz Sadiq.