LAHORE, Jan 4: Minister for Railways Shamim Haider has said his organization is contemplating to hand over its freight section to the private sector.

A decision in this regard would soon be taken and adequate space would be offered to interested investors in Karachi, Lahore and Peshawar, the minister told the Lahore Chamber of Commerce and Industry on Tuesday.

"We are ready to give our workshops to the private sector on the basis of 50 per cent partnership for converting the old and ailing assets of the railways into modern wagons and locomotives," he said.

The railways would be a state corporation from July 1 this year and only then would be able to generate its own funds. The minister claimed his organization had reduced the overdraft from Rs16 billion to Rs14 billion. He said the project of a dual track between Karachi and Peshawar was in doldrums following the refusal of the government to provide funds.

The minister said he had two priorities - to enhance the freight business from 5 per cent to 50 per cent and to raise the private sector role -- and contribution in the rehabilitation of railways.

The government had stopped the release of grants and funds for the construction of a dual track between Karachi and Peshawar. The organization would approach donor agencies like the World Bank, the Asian Development Bank and Japan for extending loans at nominal rate for the completion of this project.

The prime minister would be the chief guest at the inaugural ceremony of the 25kms Shujabad-Shershah dual track on Jan 15. The organization would again brief the prime minister and submit its proposals to the finance division for provision of funds approved for the construction of mega project, he said.

The minister directed GM (operations) Abdul Wahab Awan to invite tenders on a proposal to install CNG kits in engines. He said 50 per cent of the existing locomotives would be converted from fuel to electricity in phases.

He said that work on the Karachi Circular Railways (KCR) would start soon. A survey would also be conducted for the Lahore Circular Railways planned on a built-operate-transfer (BOT) basis.

He said that the Chinese firm, given the job to provide 1,300 wagons, had so far supplied only 65 to date. The second instalment of the wagons was expected in February next.

Mr Haider also promised to take one LCCI member into the railways advisory committee and said that the PR authorities would hold a meeting with chamber office-bearers every month to sort out the problems facing the business community.