Railways engages private sector for financial revival

Published April 10, 2021
Under Business Model-1, PR will outsource most of its passenger trains — particularly the loss-making ones.  — AFP/File
Under Business Model-1, PR will outsource most of its passenger trains — particularly the loss-making ones. — AFP/File

LAHORE: In a bid to take Pakistan Railways (PR) out of the ongoing financial crisis and make the organisation a sustainable state-owned entity, the Ministry of Railways has introduced four business models under which engagement of the private sector would be a priority in resolving crucial issues.

Under Business Model-1, PR will outsource most of its passenger trains — particularly the loss-making ones. “Four trains have already been outsourced. Eight more are in the pipeline and for this the department concerned has received technical and financial bids,” a senior PR official told Dawn on Friday.

“Through outsourcing operation of passenger trains, we will not only be able to end the culture of people travelling without tickets but also increase our revenue. In addition, the government would also receive 10 per cent tax to be deducted on payments to the private firms/companies,” the official, requesting anonymity added. The business, in this way, can be increased more by including a cargo coach in the composition of trains being outsourced, he said.

Under Model-2, PR has introduced its track access policy under which the private sector is being invited to join hands with the department by bringing and running their own locomotives, passenger and goods/freight trains on the rail network across the country. For this, the private sector interested in this model, would be liable to share certain agreed profit ratio with the railways.

Under Model-3, the official said that PR, in view of severe shortage of freight wagons and increased maintainance cost on the existing wagons, has introduced the ‘Procure, Lease and Transfer’ and ‘Build, Operate and Transfer’ modes.

“Under this model, the private sector will be liable to bring its own freight coaches, get those run by railways for a period of 10 years, receive certain profit ratio and invested money from railways and return the rolling stocks to it on zero payment at the end of agreement,” he explained. “The companies would also be given a 5pc discount in freight charges of their own consignments,” said.

Model-4 focusses on PR workshops that would also be outsourced to the international companies. Under this arrangement, the firms are required to invest in manufacturing coaches and wagons, repair/maintain locomotives and supply to the railways. “They would also be responsible of transferring technology to Pakistani engineers/workers,” he said.

Published in Dawn, April 10th, 2021

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