BEIJING, Feb 11: Pakistan and China on Tuesday signed a contract worth about 62 million dollars for 1300 double capacity freight coaches for the Pakistan Railways (PR).

Under the contract, a Chinese company — Dongfang Electric Corporation — will provide the freight coaches on supplier credit basis. A credit on soft term basis will be provided by the Exim Bank of China to meet 87 per cent of the cost of the project, while the rest of 13 per cent amount will be arranged by the Pakistan Railways.

Out of 1300 coaches, 420 will be manufactured in China within a period of one year, while 880 coaches will be produced at the Lahore Moghalpura Railways workshop in the next two years.

The signing ceremony was attended by Minister for Railways Ghous Bukhsh Mehar, Sindh Ministers Shohaib Bukhari and Adil Siddique, MNAs Syed Ayas Ali Shah Sheerazi and Rao Ajmal, besides Pakistan Ambassador Riaz Mohammad Khan.

From Pakistan’s side, the contract was signed by Hamid Hasan Butt, General Manager of the PR, while Li Zong Wen, President of the Dongfang Corporation, represented his country.

The Dongfang Electric Corporation was the lowest evaluated bidder in the international tendering held last year.

Later, talking to APP Ghous Bukhsh Mehr said that the contract was a milestone in the history of the PR. This, he added, would give a big boost to the development of rail network in the country.

He said the decision to award the contract was made after finalizing necessary modalities, keeping in view the required standard of work and time-schedule.

The main feature of the contract is the transfer of technology, enabling the PR to manufacture the coaches indigenously, he added.

He said the PR is focusing on the expansion of freight service to boost its revenue in a bid to make the institution profitable and to get rid of State Bank’s loans as early as possible.

“Passenger service is essentially welfare-oriented. The Railways will have to expand goods service to increase its earning,” he said.

At present, Pakistan Railways’ freight service handles some 20 per cent of the total transportation of goods, mainly from Karachi to upcountry on the Karachi-Lahore route.

Goods service to increase its earning,” he said.—APP