ISLAMABAD, Jan 8: The Pakistan Railways is likely to be privatized partially to help minimize its losses and make the organization financially viable. Official sources told Dawn here on Thursday that the government was considering a study "Advantages and Disadvantages of Privatizing Pakistan Railways and Lessons" that sought to partially disinvest the railways in the country.

The study has been submitted to the Ministry of Privatization and the Pakistan Railways recently by Mr SA Syed, who also individually met some of the senior officials of the ministry of finance and the railways officials in the provinces.

The study, made available to Dawn, suggested that an intelligent combination could reduce the disadvantages of a publicly owned service and was capable of harnessing the advantages of privatization.

The study has recommended that the government should retain 20 per cent of shares in the Railways in the shape of land and infrastructure, 50 per cent of the shares be offered in open market and the rest 30 per cent be sold to strategic buyers.

"The private owners should be invited to bring their own rolling stock, which includes locomotives as well, to operate any number and type of trains. Private owners shall pay excess charges to railways for using infrastructure, which shall be reinvested in its upgradation and maintenance," the study said. At the same time, the government must provide regulations for ensuring free market competition, economics of scale, easy entry and exit to private operators.

The study pointed out that Pakistan Railways has been suffering constant losses for the last few decades and short term solutions to place it back on track could not solve the problem. Since 1980 onward, privatization of essential services and railways had swept all the continents. In the light of international experience of privatizing railways and subsequent failures, it has been suggested to try a new approach of partially disinvesting the organization in Pakistan.

It was pointed out that short term measures adopted by most of the governments have been a failure including an attempt of out- sourcing a part of Pakistan railways in 1998. "However, the experience has proved that privatization is not the only solution to all poorly managed public facilities especially in an ailing economy. Sometimes privatization aggravates the problem," the study said.