LAHORE: The Pakistan Railways (PR) has accused the private company operating Business Express of `committing wilful default with criminal intent of its financial obligations of more than Rs990 million.’

Addressed to the chief operating officer of the private company, the “legal notice under the NAB Ordinance 1999,” (No 6-DC/215/2/20/22, dated 15-08-2014) by the PR chief commercial manager also asked the company to clear the dues by mid-September “otherwise the matter will be referred to the National Accountability Bureau (NAB)” besides “suspension of Business Express operation,” the first joint venture of the PR under public-private partnership.

Quoting figures provided by the PR financial adviser and chief accounts officer (revenue) and director-general of railway audit, the notice says the outstanding dues to be paid by the private company in accordance with both the terms of the agreement (with the PR) stood at “Rs290,404,523 up to Dec 31, 2012, and the Economic Coordination Committee decision Rs395,015,988 up to July 14, 2014. Whereas, as per agreement, an amount of Rs992,862,546 was due against you up to Aug 14, 2014, which is increasing day by day.”

The PR and M/s Four Brother International (Pvt) Ltd had on Aug 18, 2011, entered into an agreement relating to commercial management and passenger facilitation of Business Express between Punjab and Sindh capitals. Subsequently, an addendum signed on Jan 9, 2012, amending certain clauses of the contract formed a formal part between the two parties. The then prime minister, Yousuf Raza Gilani, had on Feb 3, 2012, formally inaugurated the Business Express operation at a ceremony at Lahore Railway Station.

In case of default, case will be referred to NAB

According to the terms of the agreement and the addendum, M/s Four Brother were required to pay the PR a daily journey fare of Rs3.190 million or the minimum guaranteed money as well as invest an amount of Rs225.786 million as value addition to passenger services.

A schedule detailing the amount of Rs176.307 million investments made by the company was given to the PR. However, a committee of five deputy principal officers of the PR acknowledged that Rs67.226 million might be considered for investment subject to verification.

However, the company never met its financial commitments from day one. On the request of the company the matter was referred to the ECC on May 16, 2012, which decided that the new minimum guaranteed payment would be Rs2,227,618. The ECC decision was implemented with effect from Jan 1, 2013. A moratorium of six months from the date of implementation of the ECC decision was also implemented, allowing for payment arrears by the company. Furthermore, the company approached a civil court for appointment of an arbitrator so as to initiate long-drawn-out litigation.

Published in Dawn, August 25th, 2014