That the financial position of Pakistan Railways is not sound and that it has been deteriorating from year-to-year, are the grim facts revealed by the Auditor General of Pakistan in his report on railways accounts for the year 2005-06. The report also has it that there had been no marked improvement in the passenger services and their lifting capacity had been diminishing.
Worse, the audit has detected irregularities of a varied nature and covering a wide area of railways' working and together totalling an over Rs 159.224 million loss to the national exchequer. In so far as the setback from the irregularities is concerned, the highest loss of Rs 32.069 million is stated to have been caused due to failure to recover demurrage and wharfage charges.
For, as has been noted, contrary to the rules, an amount of Rs 23.65 million was not recovered from Wapda, Defence, PSO etc, alone on account of demurrage and wharfage charges while delivering the consignments during the period 1992-93 to 2002-03.
The next largest irregularity as detected during the audit of accounts; it relates to the huge shortage of material valuing at Rs 27.308 million, as discovered during the stock verification of stores of Permanent Way Inspectors (PWIs) of Karachi Division from March 2000 to February 2005. Shockingly enough, the shortage thus occurring was neither investigated nor its responsibility fixed, thereby culminating in non-recovery of the loss.
Elaborating on the irregularity on this count, as the audit report has pointed out, Pakistan Railways code for the store department says that each case of shortage should be clearly investigated, evidently to find out whether it has been due to the negligence, carelessness or dishonesty of any of the railways employee.
Again, the authorities failed to recover an amount of Rs 19.936 million from different government departments, including Rs 9.183 million from Sui Northern Gas Pipeline Ltd, Rs 9.153 million from the National Highway Authority, and Municipal Committee, Kotri, besides Rs 1.60 million from Provincial Highway Division, Rawalpindi.
They are also stated to have failed to recover Rs 6.248 million from October 1998 to November 2004 from the Iranian State Railways pertaining to Mirjawa-Zahidan section. Moreover, the audit report has also noted that in violation of rules an amount of Rs 3.019 million was paid to the non-entitled employees by the Mechanical Engineering and Marketing Department, during July 1999 to January 2005.
In yet another case of a similar nature, the contractor was paid in excess and at a compound rate instead of simple rate of 5 percent per annum, resulting in over-payment of as much as Rs 1.650 million during June 1993 to September 1998. Reference, in this regard, may also be made to the import of defective material, which resulted in a loss of Rs 6.334 million.
Among these instances of irregularities in railways accounts, mention has also been made of the purchase of five vehicles valuing Rs 3.458 million in 2003-04 and 2004-05 by the Managing Director, RAILCOP, without obtaining no-objection certificate from the Cabinet Division.
Surfacing of such grotesque irregularities in railways accounts, covering a period of the much publicised multi-pronged efforts to restructure and revamp this long neglected sector of transportation will make a sad commentary on the retarded pace of progress in the desired direction.
For the economic health of a state-owned entity has a great deal to do not only with the income it generates but also with the manner in which it uses the resources at its disposal. In so far as the generation of income from its operations is concerned, from all indications, it presents a dismal picture with serious disarray and rampant corruption, as further exacerbated, generally speaking, by lack of motivated effort for proper management.
That is why despite pumping of increasing funds year after year to rescue the railways from the rock bottom it had hit, it continued to deteriorate in all respects. For one thing, it must be noted that irrespective of the size of funds pumped to ensure better performance, unchecked leakages through irregularities or shortages caused by the negligence or misconduct of its employees can hardly be expected to serve the desired purpose.
This is not to say that no effort has been made to address the railways' problems through reforms and restructuring. Of course, the government has tried, in various ways, to address these and allied problems. But as ill luck would have it, the process has been retarded from one lapse or the other. A ready reference, in this regard, may be made to the heart-warming observations the Federal Secretary and Chairman of Pakistan Railways, Ejaz Ahmad Qureshi, recently, made at a meeting with the Sarhad Chamber of Commerce & Industry (SCCI).
Among other things, he said that the railways would be purged of the cancer of corruption, in order to convert it into a businessmen-friendly institution of the country, public-private partnership was being introduced, old and outdated mechanical assets were being replaced and upgradation of installations would also be undertaken.
According to him, adoption of a mechanism is under consideration to convert the network of Pakistan Railways into a national trade corridor. While saying so, he also stated that the government had approved a business plan to introduce institutional reforms and to run it on commercial basis with extension of facilities for both businessmen and passengers. For this purpose, he said, the government had sanctioned a handsome amount. One hopes that the happy tidings he gave would be translated into reality.