The government has barred the Ministry of Railways (MoR) from leasing out two of its concrete sleeper manufacturing factories situated in Kotri and Kohat, saying that such transactions might take the Railways into litigation, official sources told Business Recorder. "It is always difficult to avoid getting wrong people in such transactions who may not perform as per the agreement, and get the Railways in litigation," observed the Economic Co-ordination Committee of the Cabinet in its meeting on July 1.
A three-member committee is already in place, which is investigating the controversial deal regarding purchase of faulty Railway engines from China.
ECC, the sources said, was of the opinion that if private sector could produce required concrete sleepers at less cost, the Railways may consider getting out of this non-core activity and make purchases from the private sector, sources added.
"Railways may get the assets of these factories evaluated by independent evaluators and fix a reserve price for auction to pre-qualified bidders on 'as is where is' basis," the ECC said.
MoR had submitted a summary to ECC that machinery and equipment in five concrete sleeper factories located at Kohat, Shahinabad, Khanewal, Sukkur and Kotri, established in 1981, had completed 25 years' life.
It said that the outdated machinery needed rehabilitation and upgradation through incorporating latest technology, and added that private sector be involved in manufacturing of concrete sleepers, demand for which had increased because of track rehabilitation/dualisation projects.
The factories at Kotri and Shahinabad were closed in 1994 because of insufficient funds although the demand for concrete sleepers existed. At present the concrete sleeper factory at Kotri has been put into operation again but the Factory at Shahinabad is still not in operation.
In the summary, the ministry mentioned conversion of Khokrapar section into broad gauge and other upcoming projects, saying that it was essential that machinery in these factories be upgraded by adopting latest technology and enhancing manufacturing capacity. This would involve significant investment.
This was proposed through manufacturing of mono block concrete sleepers by the private sector at their own manufacturing facilities and supply to Railways and by leasing out sleeper factories at Kotri and Kohat, which are at present manufacturing twin-block RCC sleepers, to be converted into mono-block concrete sleepers manufacturing facility--by private sector.
The ministry also proposed that leasing of other three factories at Khanewal, Sukkur and Shaheenabad could be considered later after the experience of leasing Kotri and Kohat factories proved successful.
This was proposed that the lease should be for a period of 30 years, extendable on mutually agreed terms and conditions and upgradation of these factories would be made by the private sector.
The ministry assured that the premises of the factories would not be used for any other purpose as the Railways would have the first right to purchase the concrete sleepers from these factories.
Rejecting the proposal, the ECC directed the ministry to bring revised proposals to sell these assets through open auction to pre-qualified bidders after fixing a reserve price on the basis of evaluation by independent evaluators.
The ministry, source said, has also been asked to examine the economic viability of running the remaining three factories.
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