LAHORE: The Ministry of Railways has sought comments from the Pakistan Railways (PR) authorities regarding outsourcing of passenger facilitation and cargo handling of two express trains in 2006.

The member finance of Railways Board had last month sought a meeting with the PR authorities at its headquarters in Lahore “to discuss and resolve the disputations” mentioned in a report pertaining to award of a contract to Pakistan Railways Advisory and Consultancy Services (PRACS) in this regard.

“Now the PR financial advisor and chief accounts officer (revenue) has sent a reminder to the railways authorities in Lahore to furnish comments on the matter to the ministry,” a source told Dawn on Sunday.

Ministry seeks PR authorities’ comments on PRACS contract

Quoting the report, the source said an agreement was signed between PR and its subsidiary PRACS on Jan 15, 2006, for improving the passenger service on Hazara Express (11-Up/12-Down) and Rohi Express (131-Up/132-Down).

The contract was awarded to PRACS without competitive bidding and in violation of Public Procurement Regulatory Authority (PPRA) 2004 rules for a period of one year, the source said.

However, through an addendum signed by the then general manager (operations) on Feb 27, 2007, the duration of the contract was extended for another year, he added.

Signed without any authorisation, the addendum changed the entire intent and direction of the contract in violation of Rule 10 of PPRA that barred negotiations with the bidder having submitted the lowest evaluated or with any other bidder, the source said.

“The addendum changed the entire intent and direction of the contract by allowing PRACS to meet all expenditure from total revenue instead of its own share of revenue, thus substantially reducing the total earning of the PR from the two trains,” said the source.

The railways management kept on extending the contract up to February 2016 without revisiting the revenue assessment clauses and in violation of Clause 42 C (iii) of PPRA 2004 rules which did not allow extension of contract beyond three years, he added.

“This favour by railways authorities encouraged PRACS to become an island of prosperity in a resource-constrained environment of its parent organisation – the PR. Instead of becoming a smart organisation, PRACS evolved to become a human resource intensive one, fully dependent on revenue and profit emanating from the management of its parent department’s resources,” said the source.

The financial statement of PRACS for 2014-15, said the source, “suggests that it miserably failed on all its ventures except the train management operation and selling of railways tickets. The success of PRACS in the two ventures is largely owing to the nature of the two contracts, where the terms are beneficial to PRACS and at the cost of the PR revenue,” the source said.

Published in Dawn, April 25th, 2016