LAHORE, Oct 6: The Pakistan Railways is not likely to embark on its first joint venture with the private sector for handling 12,000 containers annually at the Mughalpura dryport, it is learnt.

The decision to hand over the commercial management, monitoring of customer facilitation of bonded dryport container traffic to a private company was taken by the PR Board’s executive committee.

Sources told Dawn that the railway was to hand over the freight handling on the Lahore-Karachi sector to PR Advisory and Consultancy Services (Pvt) Ltd (PRACS) with effect from Oct 1.

The PRACS furnished a copy of the draft agreement to the railways for taking over the assignment. Railways additional general manager and chief commercial manager (freight) were among the officers who proposed a number of amendments to the draft which were incorporated.

The PRACS also agreed to reconsider the proposals to reduce deduction of 5 per cent expenditure to 4 per cent and to sharing formula of revenue to the ratio of 60:40 instead of 50:50.

The draft agreement was sent to the financial adviser and chief accounts officer-revenue (FA&CAO-R) for concurrence.

The FA&CAO-R observed: “Pakistan Railways is a government department, operating the railways system in Pakistan under the Railways Act, 1890. Is the executive committee of the railway board is competent to take a major decision involving transferring of operations and commercial activity to its subsidiary organization, that too, without any bidding and ensuring proper competition as per rules?”

The PRACS, he further observed, “is a subsidiary of the Pakistan Railways having status of a private limited company, registered under the Companies Ordinance, 1984, and established for the specific purpose of providing advisory and consultancy services.

“It (the PRACS) has no mandate to run the commercial business, that too, primarily the job of the Pakistan Railways as per the Railways Act 1890,” he added.

The draft agreement was then referred to the legal wing of the organization for vetting which refused to do so while agreeing to the plea of the FA&CAO-R.

The National Assembly Standing Committee on Railways had also questioned the legality of the executive body in the presence of the PR Board. It also discussed in its meeting on Sept 30 the type of cases put up to the executive committee for decisions.

“Another plan of the Pakistan Railways to hand over two trains to the PRACS from Oct 15 is also likely to be shelved,” sources said.

According to them, Rohi Express (131-up/132-down) and Chenab Express (11-up/12-down) were proposed to be handed over to the PRACS on experimental basis with effect from the forthcoming time table.

Prime Minister Shaukat Aziz had on Sept 5 inaugurated the first freight train, being run by the PRACS, on Lahore-Karachi sector.