Pakistan Railways (PR) is in the grip of serious financial crisis which is persistently aggravating due to decline in the earnings caused mainly by the non-availability of locomotives, hike in diesel price, reduction in the number of passengers and goods trains and increase in the wages and pensions of the railways employees, said a report sent to National Assembly's secretariat.
According to the report, a copy of which is available with Business Recorder, the details of expenditure, earning and the subsidy provided by the government is as under: In financial year 2007-08 railways expenditures were Rs 37074 million against Rs 19975 millions earnings and subsidy provided by the government was Rs 7303 millions. In 2008-09 Railways expenditures were Rs 46204 millions against Rs 23160 millions earnings and subsidy provided by the government was Rs 9034 millions. In 2009-10 expenditures touched Rs 47094 millions against Rs 21887 millions income, while subsidy was Rs 18432 millions. In 2010-11 PR expenditures were Rs 51859 millions against Rs 18740 millions earnings, while subsidy provided by the government was Rs 32642 millions.
The passengers and freight operations are shrinking as the department failed to meet the budget target of revenue. During the last financial year 2010-11, railways earned Rs 18.74 billions against the budget's target of Rs 28.00 billions. The situation has worsened to an extent that it would not be possible even to reach the figure of Rs 18 billions in current year. During the ongoing financial year railways officials were expecting Rs 38 billion operational deficit.
PR is facing worst crisis in history. The budget requirement for operation expenditures for the current year has been estimated at Rs 60.561 billion but finance ministry allocated only Rs 45 billion. The comparison of demand and funds authorised by finance division for current year reflects that railways will never be able to meet the expenses on salary, fuel and pension. As per the report, most of the operational assets of PR have become outdated, with 60 percent of locomotives, 70 percent freight wagons, 40 percent passenger coaches and 68 percent of its track have completed their life. The crisis has adversely impacted the locomotives, reducing the fleet size to about 138 for train operations.
Due to the financial crisis, Pakistan Railways have also reduced its spending on track maintenance. The Railways authorities are procuring only urgent and essential items for maintenance of railways infrastructure. The difference between demand and allocation of funds for maintenance of infrastructure during last three years is as under: In financial year 2009-10 funds requirement was Rs 8935 million and allocation amount was only Rs 2500 millions and difference was Rs 6435 millions. In financial year 2010-11 funds requirement was Rs 8935 millions, allocation Rs 1450 millions and difference Rs 7485 millions. In financial year 2011-12 funds requirement was Rs 8935 millions, allocation was Rs 1500 millions and department had received 7435 millions against demand.
The report urged the government to take pragmatic measures to overcome the current financial crisis and requested release of Rs 11.1 billion as a bailout package approved by the federal cabinet. If the government release this amount, railways administration can rehabilitate 145 locomotives during the current financial year, it said.
An amount of Rs 1 billion may be released to Pakistan Railways for creating a fuel reserve, equivalent to one month of consumption to sustain its operations. Moreover the existing overdraft limit, which is currently capped at Rs 40 billion by the State Bank since January 2010, may be enhanced to Rs 50 billion to provide cushion to Pakistan Railways to meet the essential expenditure, the report concluded.