LAHORE: As Pakistan Railways (PR) has started outsourcing commercial operation of its passenger trains, luggage and brake vans operation through open auctions, the people associated with the freight business also want the PR to privatise the entire freight trains operation, including coal, fertiliser, container and general goods transportation under the open auction model.

“Open auction is an important method to ensure transparency for outsourcing or privatising the passenger and goods train operations in railways. The same model is also being adopted by other departments for outsourcing various operations,” says a senior officer of a private firm associated with the freight business. “I am surprised why the PR is reluctant to outsource commercial operation of its freight trains,” he wondered, urging the PR administration to also outsource this under the open auction model to ensure transparency. “It will remain a question mark if PR continues avoiding to do so,” he said.

PR’s freight business is the most commercially viable portion of the operation. In the fiscal year 2024–25, PR recorded Rs93 billion in total revenue, with freight contributing over Rs31 billion to that total, while the passenger services contributed around Rs47 billion. The freight revenue is, therefore, a substantial component of the overall income. However, it remains underutilised relative to regional rail systems. For the ongoing financial year 2025-26, the department expects a total revenue of Rs100 billion.

While the passenger services remain the public face of the PR, freight is its true commercial backbone. Coal, cement, fertiliser, petroleum, and containerised cargo moving from ports to the country’s central and north region generate the bulk of railway earnings. In recent years, freight revenue has shown significant growth, proving that the sector has immense commercial potential if managed efficiently.

At the center of this freight capacity are high-capacity wagons such as the ZBKC series — modern, heavy-load wagons capable of carrying around 60 tons each. These wagons are purpose-built for bulk commodities like coal and are ideally suited for long-haul inland routes from Karachi ports to power plants and industries across Punjab and beyond. These wagons are not just rolling stock. They are revenue-generating assets — and how they are allocated directly affects how much the railways earn.

PR has already demonstrated the effectiveness of open auctions across multiple service areas. “Beyond outsourcing passenger trains through competitive bidding to ensure transparency and market-based revenue, the railways have also offered luggage and brake van operations through public tenders — generating billions of rupees over recent years. In addition, dedicated cargo train services, including trains 501-502 and 503-504, were similarly placed under open auction mechanisms. These examples collectively show that Pakistan Railways has successfully used transparent, competitive models for passenger, auxiliary, and cargo services — a precedent that can logically be extended to the allocation of ZB series freight wagons,” he explained.

The federal government’s broader push toward structural reform of state-owned enterprises — including the ongoing privatisation process of Pakistan International Airlines (PIA) — reflects a policy shift toward market discipline, private participation, and competitive bidding to improve performance and reduce losses. The same reform thinking applies naturally to the PR’s freight operations. “Open access through competitive processes is not privatisation of assets, but commercial utilisation through market forces,” he added.

Giving the example of Indian Railways, he said that it earned approximately INR 1.75 lakh crore (over $20 billion) from freight in FY 2024–25 alone. India’s freight ecosystem includes private wagon ownership schemes, transparent freight allocation, and market-linked pricing that allow industries direct participation in rail logistics. Wagon utilisation is driven by demand and commercial contracts rather than administrative allotment.

This competitive framework has allowed Indian Railways to dominate bulk cargo logistics and maintain a strong freight share in the national transport mix. He also mentioned Indonesia’s state railway, PT Kereta Api Indonesia (KAI), operating freight services through structured commercial agreements with coal miners, cement producers, and container operators. “Freight wagons are deployed under long-term commercial contracts where utilisation and revenue are market-linked. Private sector logistics firms actively participate in rail cargo movement under transparent commercial terms,” he said, adding that the Vietnam Railways has also increasingly shifted toward contract-based cargo allocation for container and industrial freight. “These regional examples show that rail freight thrives when wagon access is commercially structured and market-driven,” he maintained.

According to him, PR’s Rs93 billion total revenue — while a milestone domestically — remains modest when compared regionally. Indian Railways’ freight earnings alone exceed Pakistan Railways’ total income many times over. Even smaller Southeast Asian rail systems generate stronger freight performance through commercial wagon deployment. “In the past, attempts to commercially outsource freight wagons did not yield the desired results. Tenders were floated but eventually scrapped,” he said.

When contacted, the Minister for Railways Hanif Abbasi dispelled the impression about any reluctance on the part of railways to outsource the freight operation through open auction. “We have already started outsourcing our passenger trains through open auction. Similarly, luggage and brake vans operation has also been outsourced under the same model.

To a question, he said the PR would surely go for outsourcing the freight train operations under the open auction model. “But we don’t want to make it a troubling place by having the participation of non-serious people,” he deplored. To another question, he said that Karachi-Yousafwala (Sahiwal) coal train operation alone had been generating Rs9 billion annual revenue for the PR. “So we cannot disturb this by outsourcing this under open auction. But if anyone offers considerably more money, we can consider this,” the minister offered.

Published in Dawn, March 9th, 2026