Rs 11 billion bail-out package for Railways: Hafeez to quiz Bilour before handing over

Finance Minister Abdul Hafeez Shaikh will reportedly quiz Minister for Railways Ghulam Ahmad Balour before extending the bail-out package of Rs 11 billion to Pakistan Railways. According to official documents, available with Business Recorder, the Cabinet was given a detailed briefing on the precarious position of Pakistan Railways in its meeting on December 29, 2010.
Pakistan Railways, in its presentation mentioned the following factors which have impacted on its already shattered economic situation: (i) 50 percent increase in pay and pension, allowances etc; (ii) increase in price of high speed (HSD); (iii) increase in prices of utilities; (iv) damage to assets (December 2007) not fully compensated; (v) damage to infrastructure/operations due to flood in August 2010; (vi) shortfall in budgetary releases; (vi) disruption of freight train operations due to HSD shortage; and (vii) adverse effects of security situation and sabotage activities on PR in Sindh and Balochistan.
The Cabinet was informed that non-availability and paucity of locomotives over the years had been affecting the commercial viability of Pakistan Railways.
One Cabinet member argued that Pakistan Railways is also among those eight public sector enterprises (PSE) which would be restructured/revamped in the light of an earlier Cabinet decision.
Petroleum Ministry said that Pakistan Railways plans to provide a 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 and national integration. It was, therefore, requested that financial assistance amounting to Rs 11.1 billion be released to the Pakistan Railways to revamp the locomotive and improve train operations.
According to documents, the Cabinet, appreciating the issues raised in the presentation, approved, in principle, the recommendations of Pakistan Railways and advised the Ministry of Railways to use its corporate powers to make Pakistan Railways a viable entity.
Sources said that the Prime Minister also advised the Finance Minister to provide necessary funding to Pakistan Railways, in consultation with the Minister for Railways.
The Finance Minister, sources said, will seek justification for the bail-out package, given that the country's economy is already in hot waters because of what is perceived as profligate spending by the government. The Executive Committee of the National Economic Council (Ecnec) allowed Pakistan Railways to purchase locomotives from the US General Electric (GE) reportedly started interaction in 2009 with the concerned Ministries with the help of a top official in the Presidency to sell 150 locomotives and railway tracks to Pakistan.
The Cabinet also took note of the delay in the implementation of its decisions pertaining to the restructuring of the major PSEs and advised the Cabinet Committee on Restructuring of the identified PSEs to present its report on Pakistan Electric Power Company (Pepco), Pakistan Railways and Pakistan Steel Mills in the next Cabinet meeting while the report on the remaining five PSEs ie PIA, USC, TCP and Passco would be submitted by the end of January 2011.