According to a Business Recorder report from Islamabad, the government has disallowed the Ministry of Railways (MoR) to lease out two of its concrete sleeper manufacturing factories situated in Kotri and Kohat.
This decision was taken by the Economic Co-ordination Committee of the Cabinet in its meeting on July 1, on a summary submitted by the MoR, on the plea that the machinery and equipment in the five concrete sleeper factories, located at Kohat, Shahinabad, Khanewal, Sukkur and Kotri, established in 1981, had completed their 25-years life.
It was pointed out in the summary that the outdated machinery needed rehabilitation and modernisation by incorporating latest technology, with the involvement of private sector as demand for sleepers had increased because of track rehabilitation/dualisation projects.
The units at Kotri and Shahinabad were closed in 1994, due to lack of funds although the demand for concrete sleepers was very much there. However, the factory at Kotri had been put into operation again, while the other at Shahinabad was still defunct.
Reference, in this regard, was also made to the conversion of Khokhrapar section into broad gauge and other upcoming projects, to emphasise the advisability of upgradation of the concrete sleeper units with huge investment, which could be readily available with private entities.
Among other justifications in support of the leasing idea, MoR is also reported to have proposed that mono-block concrete sleepers, manufactured by the private companies, could be supplied to the Railways, and the concrete factories at Kotri and Kohat, presently making twin-block RCC sleepers, could be converted into mono-block concrete sleepers manufacturing units after leasing them out to the private sector.
Leasing of the other three factories, at Khanewal, Sukkur and Shahinabad, could be considered later, after the experiment at Kotri and Kohat factories proved successful. The ministry is also reported to have given the assurance that the premises of the installations would not be used for any other purposes, as the Railways would have the first right to purchase the concrete sleepers from the leased out factories.
Needless, to point out, these proposals were not totally irrelevant to the obtaining situation of the Railways. However, raising objections to the plea the ECC pointed out that such transactions could land the Railways into litigation. Further, it is always difficult to avoid unscrupulous parties in such transactions and they may not, necessarily, perform strictly in accordance with agreements reached.
Moreover, the ECC was of the opinion that if private sector could produce the required concrete sleepers at less cost, the Railways may, instead, consider the alternative of getting out of this non-core activity and switch over to meeting their purchases from private manufacturers. It was suggested that a better option was to get the assets of these factories evaluated by independent evaluators fix a reserve price for auction to pre-qualified bidders on 'as is where is' basis."
While rejecting the leasing proposal, the ECC is also reported to have directed the MoR to submit revised proposals, based on sale of its assets through open auction to pre-qualified bidders. The MoR has also been asked to examine the economic viability of running the remaining three factories. In taking this decision the ECC seems to have taken into account the grave consequences of $98 million deal to procure 69 diesel and electric locomotives from China in 2001, into which a sub-committee of the Public Accounts Committee of National Assembly is holding an inquiry.
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