LAHORE, May 28: The financial woes of the cash-starved Pakistan Railways are likely to continue during the next fiscal as it may get Rs37 billion less than what it had sought in the budgetary proposal for 2011-12.

The ministry of railways had sought Rs82.4873 billion but the finance ministry has approved Rs45 billion or so for the next fiscal, an official at the PR headquarters in Lahore told Dawn on Saturday.

“The railways had demanded Rs30.6991 billion more than the previous year’s allocation, fixing its income target at Rs20 billion while seeking 62.485 billion subsidy to meet the deficit. However, the ministry of finance agreed in principal to approve a subsidy of Rs25 billion,” said the official.

The railways had sought Rs16.6496 billion on account of pay and allowances of its employees, Rs13.8591 billion for payment of pension, Rs18.1093 billion for high speed diesel and lubricants procurement, Rs19.5339 billion for its stores, Rs9.3260 billion for payment of domestic and foreign loans instalments besides interest on overdraft.

Railways budget for the ongoing fiscal had been Rs51.7882 billion with an earning target of Rs28.15 billion. The government approved a subsidy of Rs32 billion for railways but paid Rs27 billion so far, said the official.

Primarily, the Rs14.50 billion budgetary targets for passenger earnings for 2010-11 could not be achieved owing to closure of 26 trains.

The shortfall in the expected earnings was further aggravated owing to floods which resulted in massive disruption of the railway network.

The law and order situation in the country had been preventing operation of trains on Rohri-Sibi and Sibi-Quetta sections during night and badly affecting earnings.

Damage caused to the railway assets following assassination of Benazir Bhutto resulted in curtailed train operations whereas the destroyed assets have yet to be recouped. “The government had promised to compensate railways but later backed out,” said the official.

Frequent locomotive failures coupled with erratic fuel supply to the same and power vans also hindered the achievement of the target.

After taking into account all the setbacks, an earning of Rs11 billion has been forecast for passenger sector.

Similarly, the budgetary target for freight was fixed at Rs8.50 billion for the 2010-11 financial year. The sector earned Rs2.671 billion up to April 20, 2011, against Rs5.824 billion earned in the same period of the corresponding year, showing a shortfall of Rs3.786 billion (58.6 per cent) while the budgetary target was Rs6.457 billion.

Citing major reasons for shortfall in freight, the official said passenger trains had been priority of the decision makers in the railways, only left-over locomotives and paths were assigned to freight service, causing an adverse effect on over-all railway earnings and profitability.

“The average availability of locomotives in freight pool remained 40 per day against target of 104 per day i.e. 38.5 per cent availability.Furthermore, there had been increase in locomotive failure by 14 per cent.

“Owing to these limiting factors, freight sector will be able to earn Rs3.314 billion as calculated on a pro rata basis during the current fiscal year. Since the constraints are going to persist for some time in the foreseeable future till the efforts to maintain the track and locomotive meet with success, the budgetary target for the two sectors in 2011-12 should be fixed about Rs40 billion.

The other coaching and military budget also affected by the same factor as mentioned above and were revised accordingly on a pro rata basis. The budget estimates for the fiscal year 2011-12 are proposed as given below. It will be sent that these figures are based on the present performance during the current financial year.