pakistan railways is a department of the government of pakistan

8/6/2019 Pakistan Railways is a Department of the Government of Pakistan

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Pakistan Railways is a department of the Government of Pakistan (GOP). The network

has 7,791 route km, 559 stations and it has an annual revenue of around Rs.20 Billion

(2007-2008). Pakistan Railways came into existence under a different name on 13 May

1861, when Kotri and Karachi two stations 169 km. a part were linked by rail. In 1947, it

was named as Northwestern Railways, had 11,088 routes Km of which 3043 were

transferred to India. Leaving 8,045 Km to Pakistan. In 1961, it was named as Pakistan

Western Railway and in 1974 as Pakistan Railways.

Operational Structure

Ministry of Railway is responsible for overall control of Pakistan Railways as well as to

guide the overall policy. There are four (4) Directorates in this PR namely Administrative

Directorate, Technical Directorate, Planning Directorate, and Finance Directorate.

The following officers also report directly to the Secretary Railways:-

a. General Manager (Operations)

b. General Manager/Manufacture and Services

c. Federal Government Inspector of Railways

Railway Board is the highest body for technical matters of the Railways, Secretary,

Ministry of Railways is also ex-officio Chairman of the Railway Board.

Pakistan Railways at this time is a vertically integrated organization and has four

business units. Pakistan Railways is headed by a General Manager, who is the Chief

Executive Officer assisted by four Addl. General Managers, namely, Infrastructure

Business Unit, Passenger Business Unit, Freight Business Unit and Manufacturing and

Services Unit that looks after: Concrete Sleeper Factories, (CSF), and Carriage Factory.

Islamabad, (CFI), Locomotive Factory, Risalpur, Rehabilitation Project, Medical and

Health Service. Railway Construction Company (RAILCOP), Pakistan Railway Advisory

& Consultancy Services (PRACS) and Educational Facilities).


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Human Resources

Pakistan Railways has about 90,000 employees consisting of staff and officers as of

2008). 71% of the total employees are working in Civil, Mechanical and Transportation

departments. All the hierarchy positions are held by graduate Engineers.

Organization

In the late 1990s, the Government of Pakistan considered selling the airline to the private

sector due to the persistent losses suffered by the airline.The general supervision and

management of affairs of Pakistan Railways is vested in the Railway Board, which has

been reconstituted. The new Railway Board consists of Chairman and five Members out

of which three are from the private sector. Secretary to the Government of Pakistan,

Ministry of Railways is the ex-officio Chairman of Railway Board and the General

Manager, Railways is the Chief Executive Officer. Organization Structure of Pakistan

Railways is of functional type, headed by GM and assisted by four Addl. General

Managers.

The New Organization Structure

This Organizational structure designed to create a commercial environment is now in the

process of implementationFinancial Performance of Pakistan Railways for 2006-07 and 2007-08:

Comparison between Revenue and Expenses:-

The total revenue of the Pakistan Railway in 2006-07 was 11,674 and the total

expenditure of the Pakistan railway was 22,556 and if we deduct revenue from the

expenditure we found that the net profit or loss was (10891).

2006-07 2007-08(in million Rupees)


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A. Revenue

1. Total Revenue 11,674 11,346

B. Expenditure

1. Working expenses 20,268 21,916

2. Improvement & Welfare Expenses 269 249

3. Pensions 4,067 4,364

4. Depreciation 2,115 2,115

Surplus/defici t ( 7,527) (8,671)

Interest on Foreign loans 2,021 1,834

Interest on Over draft 1,343 1,961

Net Profit and Loss (10,891) (12,466)


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PRESENT SITUATION OF PAKISTAN RAILWAYS AND ITS ASSETS.

It is now almost certain that the earlier plan to privatize Railways has been shelved by

the Military government which instead wants to revamp the system, rid it from

rampant corruption and control its losses. The federal government has reportedly

approved a rehabilitation plan to be launched under the control and supervision of the

Army.

One of the important policy decisions taken at the joint meeting of the National

Security Council and the Federal Cabinet, presided over by the Chief Executive,

General Pervez Musharraf, last week related to the revival of the defunct Railway

Board and its merger with the Ministry of Railways, which is now headed by a new

secretary, who is a retired Lieutenant General of the Army, who will simultaneously

hold charges as Chairman of the Railway Board. This decision seemingly marked areversal in the process of privatisation of Pakistan Railways which was initiated by

the previous government back in 1998 when on August 30, the 137-year old Pakistan

Railways was divided into three separate and independent units, each to be headed by

a Managing Director. The three units were described as the Infrastructure Unit,

Freight, Service Unit and Passenger Service unit, which have been operating

independently over the last one year and reports indicated that the Freight Unit had

registered some increase in its profit earnings during this period through better

utilization of the available number of wagons. Thus the entire process aimed at

privatization of the railways has come to a halt as a result of the latest cabinet

decision, indicating that the present government is giving preference to retention of

Pakistan Railways as a single entity in the public sector and that new efforts would be

directed towards the goal of making Pakistan Railways a viable and profit earning

concern.

Lt.Gen. Javed Ashraf Qazi, new Secretary of Railway Ministry and Chairman

Railway Board, while briefing the newsmen said that the objective of the Plan which

has been dully approved by the National Security and the Federal Cabinet at a joint

meeting held for this purpose include restructuring of railways emergency repair

measures, rehabilitation and modernization steps and reduction of debt burden on the


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department. Lieutenant General Qazi regretted that PR hasan overdraft of Rs. 19 billion

for which the department is paying Rs. 3 billion interest annually. While the

operational deficit is Rs. 2.6 billion every year. As such, the total annual deficit

stands at Rs. 9 billion.

He said that with the approval of the federal cabinet, the Ministry of Railways has

constituted a committee to work out a strategy to deal with the surplus staff. Till then,

General Qazi said, no retrenchment would be made in the Pakistan Railways.

At present, non technical staffincluding clerks, workers and peonsare in surplus,

while the technical staff is insufficient. "We have chalked out a plan to train the non

technical staff and accommodate them in technical sections to overcome the

deficiency there. The three-month training programme would soon start in Lahore.

The railway department has been divided into two unitsoperations and technical.

These units will be headed by general managers. One will run the mail operation

while the other will look into the task of manufacturing and services. The task of the

general managers would be to work for the rehabilitation of the department and earn

money to revive its economic position.

It may be recalled that Pakistan Railways has been invariably reporting losses in its

operations during the last 52 years despite repeated efforts on the part of the various

governments in the past to inject dynamism, both administratively and financially, inits working, but all such efforts seemingly failed to produce the desired results. The

organization which is purely commercial in its functions has failed to bridge the gap

in its expenditure and income. In fact, the gap has been widening without any sign of

a change for the better. As a result, the federal government as the owner of the

railways, has to meet the large deficits from its meager financial resources. Instead of

fixing the dismal affairs in Pakistan Railways, the Zia-ul-Haq government had opted

for a quick fix by launching the National Logistic Cell through the Army resources,

instead of restructuring and downsizing the overstaffed monopoly.

It was due to the inefficiency in its working and constant deficit in its balance sheet

that the railways lost a substantial share in the freight and passenger movement

market of the country over the last five decades and consequently the privately ownedbus

services and trucking companies have been rapidly gaining ground in the


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transport system.

As things stand, public confidence in the railways is at an all-time low. The Pakistan

Railways suffered a loss of over Rs. 6 billion in 1997-98 as compared to Rs. 1.8

billion in 1990-91. The spiralling losses are due to a number of factors, the principal

one being a progressive decline in the operational efficiency and reliability of its

passenger and freight services, to say nothing of convenience and comfort of travel.

As a result, there has been a sharp fall in passenger tarffic and freight transported over

the years and a rise in expenditures at the same time. The railways have been

neglected by successive governments which preferred to invest in road and air

transport instead. This neglect has had very far-reaching consequences. The travails of

train travellers are endless. From hassles in getting tickets, to the deplorable condition

of trains and the absence of any mechanism to check and rectify the manymalpractices, irregularities and deficiencies that afflict the whole of spectrum of train

travel.

As the army takes stock of the situation, a good idea would be to set up a committee

comprising experts from the field of railways to come up with a set of

recommendations of both short-and long-term nature so that the process of

revitalizing the railways can be started on a sound footing and in right earnest. Under

the ongoing restructuring process, the railways has already shut down over 200 train

routes out of a total of 324 and intends to sack 30,000 employees. To carry this

process through to its logical end calls for an unbending will, patience and

perseverance. The turnaround in the railways is imperative as this organization should

serve as the pivot of the national transport system and an arterial channel of economic

activity in the country. And it will got to the credit of the army if it is able to restore

the railways to its pristine position so that it plays its crucial role in the composite

sector of communications and economic activity

KarachiFederal Minister for Pakistan Railways (PR) Ghulam Ahmed Bilour

Sunday said Pakistan Railways was passing through a financial crunch and even

unable to pay salaries to the army of employees.


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Talking to media persons here on Sunday, Bilour said that like others

departmentsPakistan Railways was also passing through era of hardships however despite

these

harsh facts all efforts were made to broaden the Railways network.

He said that during past eras Pakistan Railways were adversely neglected which led to

present situation however incumbent government was not disappointed and was

chalking out long termed strategies which would not only mend the past discrepancies

but would also develop the PR and it would be proved a beneficial department soon.

The Minister said that a request has been made to friend country China for

cooperation in development of Railways which has been accepted and a positive

response was hoped. In cooperation with China a dual track Railway track would be

laid between Khanjab-Islamabad and Karachi-Tourkham which would not only helpin easing the traveling between these areas but would also open new avenues of

development in trade and tourism.

He said that though lack of funds was creating hurdles in the way of development of

Railways but China and other countries would be consulted to resolve this problem.

Bilour claimed that railway departments across the globe except India Railways were

going in loss.

Transportation Sector including Railways

The domestic transportation system in Pakistan primarily comprises of the Road, Rail and

Air. The growing economy is imposing strains on the transport sector.

Road Sector

The total roads of all types are estimated at 258,350 kms. Of which high type roads are

176,587 km. and low type roads are 81,761 kms. The highest density remains on the

Grand Trunk Road running from Peshawar to Karachi. The first segment of an alternate

motorway form Islamabad to Lahore and Islamabad to Peshawar has been completed.

With other sections to be constructed shortly. The national highway carries 96 percent of

the freight and 91 percent of passenger traffic.

Railway Sector


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Railway sector in Pakistan has not maintained its position in the transport sector. The

market share of Pakistan Railways kept on declining with the passage of time. For

example, annual passenger volume carried by Pakistan Railways in late 1970s was

approx. 145 million, which has come down to 59 million in 1992/93. The freight business

was of PR was 15 million tons in late 1960s but has come down to 7 million tons. Roads

have steadily become the more preferred form of transportation. An example of PRs

declining market share is that it is moving only 11% of total petroleum products and 2%

of the total containers. A more professionally managed and independent railways have

immense growth potential.

Air Sector

Pakistan International Airlines (PIA), the national carrier, is carrying the bulk of the air

travel services within the country. With deregulation of the air sector in the 90s, three

other private airlines have entered the domestic market and international market.

Regulatory Environment

The Railway Regulatory Framework is now under preparation.

The broad objectives of the proposed Regulatory Policy are:

To regulate the establishment, working, and provision of railway services in

Pakistan

To promote and protect the interests of users of railway services To promote competition in the provision of railway services

To encourage investment in railway infrastructure and rolling stock by the private

sector and

To promote efficiency and economy in the provision of railway services To resolve disputes arising in the industry.

The Regulator is expected to have three major functions:


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Overseeing the rules and conditions establishing access to infrastructure and

approving access contracts

Licensing private train operations and resolving disputes of regulatory nature

Managing Public Service Obligations for the Military and other Passenger traffic.

Current Status The unbundling of Pakistan Railways into core business units (Infrastructure,

Freight and Passenger) is under process

Managing Directors (MD) for the three core business units Infrastructure, Freight

and Passenger have been appointed.

A notification for the operation of the core business units and delegation of

powers to the MDs has been issued. Operation of the three units has commenced

from September 1998. Accounting separation and segregation of assets is being formalised.

Non-core assets will be evaluated and prepared to be sold through open auction. Regulatory environment is being established.

The Likely Offer

Sale/Concession of three core business units of Pakistan Railways (PR) i.e. Infrastructure,Freight and Passenger units

Non-core units: Locomotive factory, Sleeper factories, Carriage Factory etc.

Railway land and other properties.

Transfer of Ancillary facilities.

Development of PR properties (e.g. Railway Stations in major cities)

Equipment/sections for preservation of Railway heritage.

Key Contacts

Director General

Privatisation Commission


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5-A Constitution Avenue

EAC Building

Islamabad Pakistan

Telephone: (92-51)

920 5369 Facsimile : (92-

51) 920 3076,

(92-51) 921 1692

Email: [email protected]

.pk
mailto:[email protected]:[email protected]:[email protected]:[email protected]

pakistan railways is a department of the government of pakistan

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