LAHORE: A Rs6.1 billion loan arranged by the government from a banking consortium for rehabili-tation of 96 locomotives has been given to the Pakistan Railways Advisory and Consultancy Services (Pracs). According to an official, the finance ministry is the guarantor for the loan to be repaid in five years with 13 per cent interest by Pracs to the consortium led by the National Bank.
The amount is part of a bailout package approved by the federal cabinet in the last week of December 2010.
An acute shortage of locomotives has seriously affected the railway passenger and freight services. The shortage became so acute that the railway had to suspend certain passenger trains in February last year.
Out of a fleet of 520 diesel and electric locomotives, only about 100 have been operational on an average over the past year, making it difficult to maintain credible operation and punctuality of trains.
Frequent suspension of the service has led to protests by commuters and caused further deterioration of the financial health of the organisation.
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