Contents

Topic

page No.

Executive Summary

02

History of Rail Transport

03

Pakistan Railways

05

History
07

After independence

10

Mission statement

11

Vision Statement

12

Routes

14

Traffic

18

Problems face by Pakistan railway

19

Pakistan Railway working on rehabilitation of railway system

32

Pakistan Locomotive Factory, Risalpur

36

Accidents

37

Future developments

44

Chinese bank withholds funds for Pakistan Railways

47

World Bank may be asked to inject funds into Pakistan Railways

49

Conclusion

51

Recommendation

52

References

53
1

EXECUTIVE SUMMARY

Railway Industry plays a vital role in a countrys economic system. This industry is a back bone
for a country. If this industry is being used & operated effectively and proper polices are applied
for its development then it could provide a very profitable business to its country which may bring
in a positive change in a countrys economy.
On the other side, if this industry is being operated under the supervision of ineligible authorities
and not properly overlooked by the Government then not only Railway Industry Will Suffer from
Losses also the country will also have to endure.
Unfortunately, Pakistan Railway is also suffering from the reason mentioned above. It is an
important source of transportation throughout Pakistan. It carries millions of passengers
throughout the country. It is been used to carry huge freight in Pakistan. This cheap and safe mode
for passengers is now facing a number of issues. A number of services of Pakistan Railways have
been cancelled, suspended or terminated and many more will be suspended in near future because
of mismanagement and shortage of locomotives, fuel and money. The chapter of all major services,
from Lahore to Karachi, has been closed. The incompetent administration has failed to attain
locomotives from any quarter of the world. Passengers are suffering due to mismanagement of
administration. Pakistan Railways decision to suspend goods train service due to severe shortage
of locomotives and fuel is another blow to this organization.
The railway has retired 102 of 220 trains and relies on handouts of Rs. 2.2 billion a month just to
pay salaries and pensions. It is also facing predictable losses of Rs. 35 billion in fiscal year July
2011 to June 2012. It is now basically financially bankrupt organization. In other words it is on the
edge of financial collapse. Finally, we will determine major Factors responsible For Pakistan
Railways Crises accordingly to people views and secondary data.

PAKISTAN RAILWAY
History of Rail Transport:
The history of rail transport dates back nearly 500 years and include systems with man or horse
power and rails of wood or stone. Modern rail transport systems first appeared in England in the
1820s. These systems, which made use of the steam locomotive, were the first practical forms
of mechanized land transport, and they remained the primary form of mechanized land transport
for the next 100 years. As the colliery and quarry tram ways and wagon ways grew longer, the
possibility of using the technology for the public conveyance of goods suggested itself. On 26
July1803, Jessop opened the Surrey Iron Railway in south London- arguably, the world's first
public railway, albeit a horse-drawn one. It was not a railway in the modern sense of the word, as it
functioned like a turnpike road.
Manchester Railway. Unfortunately, he became bankrupt and his schemes were taken over by
George Stephenson and others. However, he is credited by many historians with the title of "Father
of the Railway. It was not until 1825 that the success of the Stockton and Darlington Railway
proved that the railways could be made as useful to the general shipping public as to the colliery
owner. This railway broke new ground by using rails made of rolled wrought iron, produced at
Bedlington Iron works in Northumberland. Such rails were stronger. This railway linked the town
of Darlington with the port of Stockton-on-Tees, and was intended to enable local collieries (which
were connected to the line by short branches) to transport their coal to the docks. As this would
constitute the bulk of the traffic, the company took the important step of offering to haul the
colliery wagons or caldrons by locomotive power, something that required a scheduled or
timetabled service of trains. However, the line also functioned as a toll railway, where private
horse drawn wagons could be operated upon it.
This curious hybrid of a system (which also included, at one stage, a horse drawn passenger
wagon) could not last, and within a few years, traffic was restricted to timetabled trains. The
success of the Stockton and Darlington encouraged the rich investors of the rapidly industrializing
3

North West of England to embark upon a project to link the rich cotton manufacturing town of
Manchester with the thriving port of Liverpool. The Liverpool and Manchester Railway was the
first modern railway, in that both the goods and passenger traffic was operated by scheduled
or timetabled locomotive hauled trains. At the time of its construction, there was still a serious
doubt that locomotives could maintain a regular service over the distance involved. A widely
reported competition was held in 1829 called the Rain hill Trials, to find the most suitable steam
engine to haul the trains. A number of locomotives were entered, including Novelty, Perseverance,
and Sans Peril. The winner was Stephensons Rocket, which had superior steaming qualities as a
consequence of the installation of a multi-tubular boiler (suggested by Henry Booth, a director of
the railway company). The promoters were mainly interested in goods traffic, but after the line
opened on 15 September 1830, they found to their amazement that passenger traffic was just as
remunerative.
The success of the Liverpool and Manchester railway influenced the development of
railways elsewhere in Britain and abroad. The company hosted many visiting deputations from
other railway projects, and many railway men received their early training and experience upon
this line. It must be remembered that the Liverpool and Manchester line was still a short one (35
miles (56 km)), linking two towns within an English shire county. The worlds first trunk line can
be said to be the Grand Junction Railway, opening in 1837, and linking a mid point on the
Liverpool and Manchester Railway with Birmingham, by way of Crewe, Stafford, and
Wolverhampton.
North Western State Railways, which was later on re named as North Western Railway(NWR).
This would eventually become Pakistan Railways in 1947.Another railway line
between Karachi and Keamari was opened on June 16th, 1889. In 1897, the line from Keamari to
Kotri was doubled. By 1898 as the network began to grow, another proposed railway line was in
the works from Peshawar to Karachi. It closely followed the route taken by Alexander Great and
his army while marching through the Hindu Kush to the Arabian Sea. During the early 20th
century, railway lines were also laid down between Peshawar and Rawalpindi and Rawalpindi to
Lahore. Different sections on the existing main line from Peshawar and branch lines were
constructed in the last quarter of 19th century and early 20th century.

Pakistan Railways

Pakistan Railways (reporting mark PR) is a national state-owned rail transport service of Pakistan,
head-quartered in Lahore. It is administered by the federal government under the Ministry of
Railways. PR provides an important mode of transportation throughout Pakistan. It is commonly
referred to as the "life line of the country", by aiding in large-scale movement of people and freight
throughout Pakistan. The current chairman is Shahid Hussain Raja.

Current State
Pakistan, despite its moderate size, has a largely dysfunctional railway system. As of mid 2011, it
was decided to stop all goods train haulage due to severe shortage of locomotives and fuel. The
financially bankrupt organization, despite bailouts, has not been able to emerge out of its troubles
leading to cancellation of as many as 115 railway services. The decision has left ordinary
Pakistanis at the mercy of bus operators for long distance travel. As of 2011, the PR network
cancelled many trains and AC services in many trains were stopped. On 29 December 2011, PR
restored freight train service from Karachi to upcountry.

History:
Before independence:

The idea of a rail network was first thought of in 1847, with the possibility of Karachi becoming a
major seaport. Sir Henry Edward Frere, who was appointed as the Commissioner of Sindh, sought
permission from Lord Dalhousie to begin a survey for a Karachi Seaport and a survey for a railway
line in 1858. The proposed railway line would be laid from Karachi (city) to Kotri. A steamboat
service on the Indus and Chenab rivers would connect Kotri to Multan and from there another
railway line would be laid to Lahore and beyond.On May 13, 1861, the first railway line was
7

opened to the public, between Karachi (city) and Kotri, with a total distance of 105 miles
(169 km).
By 1886, there were four railway companies operating in what would become Pakistan.

Scinde (sindh) Railways

Indian Fiotilla Company
Punjab Railway
Delhi Railways
These were amalgamated into the Scinde, Punjab & Delhi Railways Company and
purchased by the Secretary of State for India in 1885, and in January 1886 formed the
North Western State Railways, which was later on renamed as North Western Railway
(NWR). This would eventually become Pakistan Railways in 1947.Another railway line
between Karachi and Keamari was opened on June 16, 1889. In 1897, the line from
Keamari to Kotri was doubled.
It was the year 1857 when the idea was suggested by William Andrew (Chairman of Scinde,
Punjab and Delhi Railway) that the railways to the Bolan Pass would have strategic role in
responding to any threat by Russia. During the second Afghan War (187880) between Britain and
Afghanistan, a

new urgency was needed to

construct a

Railway line up to Quetta in

order to get

easier access to the frontier. On

18 September

1879, under the orders of

Viceroy

Council, work begun on laying

the railway

tracks and after four months the

8

first 215 km of line from Ruk to Sibi was completed and become operational in January 1880.
Beyond Sibi the terrain was very

difficult. After immense difficulties and harsh weather conditions, it was March 1887 when the
railway line of over 320 km long finally reached Quetta.
By 1898, as the network began to grow, another proposed railway line was in the works from
Peshawar to Karachi. It closely followed the route taken by Alexander The Great and his army
while marching through the Hindu Kush to the Arabian Sea. During the early 20th century, railway
lines were also laid down between Peshawar and Rawalpindi and Rawalpindi to Lahore. Different
sections on the existing main line from Peshawar and branch lines were constructed in the last
quarter of 19th century and early 20th century.

Khyber Steam Train Safari

After independence

10

In 1947, at the time of independence, 1,947 route miles (3,133 km) of North Western Railways
were transferred to India, leaving 5,048 route miles (8,122 km) to Pakistan.
In 1954, the railway line was extended to Mardan and Charsada, and in 1956 the JacobabadKashmore 2 ft 6 in (762 mm) gauge line was converted into broad gauge. In 1961, the Pakistani
portion of North Western Railways was renamed Pakistan Railways. The Kot Adu-Kashmore line
was constructed between 1969 and 1973 providing an alternative route from Karachi to northern
Pakistan.

11

To provide a safe reliable, modern, efficient and

costeffective infrastructure to its customers: to contribute inbuilding the e
conomy of Pakistan and to look after the welfare of its employees.

Vision Statement

12

Increasing share in freight and passenger market.

Restoring confidence of the passenger and trading community.
Development of human resource need base coupled with improvement and development of
management, infrastructure and rolling stock.
Encourage private sector in public private partnership, both for development of
infrastructure and train operations.
Diversify all its non-core activities to make them self-sustainable units

Controversies
Pakistan Railways has been the subject of a number of investigations by the National
Accountability Bureau (NAB), Pakistans elite anti-corruption agency, after concerns were raised
about contracts relating to the repair, upgrade and purchase of locomotives; unauthorized payments
of over Rs220 million from its Accountants Department; the disposal of scrap; and the theft of
consignments from cargo trains. In 2012 it was reported that these cases were referred to the NAB
for investigation by the Supreme Court of Pakistan.
In March 2012, Pakistan Railways General Manager, Saeed Akhtar, was arrested by the NAB on
charges of misuse of authority and alleged involvement in the misappropriation of Rs600 million,
relating to the sale of scrap at a below market value rate.

Gauge
Pakistan Railways had a mixture of gauges, Broad gauge (1,676 mm or 5 ft 6 in), Meter gauge
(1,000 mm or 3 ft 3 3/8 in) and Narrow gauge (762 mm or 2 ft 6 in). Few Meter gauge & Narrow
gauge railway lines have converted in to Broad gauge and remaining have abandoned or
dismantled. Now only Broad gauge railway lines are operational in Pakistan Railways network.

Axle load limit

13

Pakistan Railways broad gauge railway track Axle load limit is 22.86 tones except Rohri-Quetta &
Quetta-Chaman railway lines which Axle load limit is 17.78 tones and Spezand-Zahedan railway
line which Axle load limit is 17.27 tones.

Speed
The maximum Speed of Pakistan Railways is 120 km/h. Some sections of Karachi-Lahore main
railway line allow 120 km/h speed. Work is in progress to improve railway track on KarachiKhanpur section to increase speed to 140 km/h.

Important Railway Lines

Karachi-Peshawar Main Line via Rohri, Khanewal, Lahore & Rawalpindi
Rohri-Quetta
Khanewal-Faisalabad
Lahore-Faisalabad
Lahore-Sialkot via Narowal

Routes
Important Domestic Routes
Karachi-Lahore
Karachi-Faisalabad
Karachi-Rawalpindi
Karachi-Peshawar

14

Rawalpindi-Quetta
Lahore-Quetta
Lahore-Rawalpindi
Karachi-Quetta
Cantt. Station
Lahore-Faisalabad
Lahore-Sialkot

Time Table
Karachi Lahore Peshawar
Train No.:

27

Classes:

P,L,E P,L,E A,1,L,E

Karachi (Cantonment)
day 1 18:00 day 1

41

15

depart
07:00 day 1
22:00 day 1
-

Rohri arr/dep
14:50 day 1
day 2 05:40 day 2
-

101

103

A,L,E A,1,E P,L,E P,L,E P,L,E

Hyderabad arr/dep
09:45 day 1
20:35 day 1 00:50 day 2
-

Multan (Cantonment)
day 2 -

107

18:40 day 1
-

23:20 day 1
-

arr/dep

16:00 day 1
-

19:45 day 1
00:40 day 2

Attock

arr/dep

Peshawar (City)

arrive -

19:30 day 2
-

01:05

07:20 day 2

Lahore (Junction) arr/dep

02:45 day 1
10:15 day 2
12:00 day 2
21:40 day 2
07:00 07:30 16:30
Rawalpindi arr/dep
11:00 12:30 21:30

17:00

14:03

14:15 day 2

03:10 day 3

04:30 day 3

06:20 day 3

Peshawar (Cantonment)

15

Karachi Quetta
Quetta Karachi
Train No.:

Train No:

Classes:

1,E

Classes:

1,E

Karachi (City) depart:

17:00 day 1

Karachi (Cantonment) depart:

08:00 day 2
Quetta arrive:

14:10 day 2

Quetta depart:

17:20 day 1

11:00 day 1

Karachi (Cantonment) arrive:

Karachi (City) arrive:

08:25 day 2

International Routes
Iran
A broad gauge railway line runs from Zahedan to Quetta, and a standard gauge line is finished
from Zahedan to Kerman in central Iran, linking with the rest of the Iranian rail network. On May
18, 2007, a MOU for rail cooperation was signed by Pakistan and Iran under which the line will be
completed by December 2008. Now that the rail systems are linked up at Zahedan, there is a breakof-gauge between the Islamic Republic of Iran Railways standard gauge tracks and Pakistan
Railways broad gauge.

India
Thar Express to Karachi and the more famous Samjhauta Express international train from Lahore,
Pakistan to Amritsar (Attari) and Delhi, India.

Afghanistan
Currently there is no rail link to Afghanistan since no railway network is present in that country,
however Pakistan Rail has proposed to help build an Afghan Rail Network in three phases. The
first phase will stretch from the Chaman to Spin Boldak in Afghanistan. The second phase will
16

extend line to Kandahar and the third phase will eventually connect to Herat. From there, the line
will be extended to Khushka, Turkmenistan. The final phase would link 1,676 mm (5 ft 6 in) gauge
with Central Asian 1,520 mm (4 ft 11 56 in) gauge. It is not clear where the break-of-gauge station
will be. The proposed line will also be connected the port town of Gwadar via Dalbadin and
Taftan, thus connecting the port town to Central Asia.

China
There is no link with China however, on February 28, 2007 contracts were awarded for feasibility
studies on a proposed line from Havelian via the Khunjerab Pass at 4730 m above sea level, to the
Chinese railhead at Kashgar, a distance of about 750 km.

Turkey
An Istanbul-Tehran-Islamabad passenger rail service was proposed recently. Meanwhile a
container train service was launched by the Prime Minister of Pakistan Yousuf Raza Gilani
between Islamabad and Istanbul on 14 August 2009. The first train carried 20 containers with a
capacity of around 750 t (738 long tons; 827 short tons) and will travel 6,500 km (4,000 mi) from
Islamabad, through Tehran, Iran and on to Istanbul in two weeks' time. According to the Minister
for Railways Ghulam Ahmad Bilour, after the trial of the container train service, a passenger train
will be launched. There are also hopes the route will eventually provide a link to Europe and
Central Asia, and carry passengers.

Turkmenistan
via Afghanistan (proposed)

17

Traffic
Passenger
Passenger traffic comprises 50% of the total revenue annually. During 1999-2000, this amounted
to Rs. 4.8 billion. Pakistan Railways carries 65 million passengers annually and daily operates 228
mails, express and passenger trains. Daily, PR carries an average of 178,000 people. Pakistan
Railways also operates special trains during occasions such as Eid ul Fitr, Eid ul Azha,
Independence Day and Raiwind Ijtema.

Freight
The Freight Business Unit, with 12,000 personnel, operates over 200 freight stations on the railway
network. The Unit serves the Ports of Karachi and Bin Qasim as well as all four provinces of the
country and generates revenue from the movement of agricultural, industrial and imported
products such as petroleum oil & lubricants (POL), wheat, coal, fertilizer, rock phosphate, cement
and sugar. About 39% of the revenue is generated from the transportation of POL products, 19%
from imported wheat, fertilizer and rock phosphate. The remaining 42% is earned from domestic
traffic.
The Freight Business Unit offers services to meet customer requirements and reduce costs through
efficiency, innovation and modernization. All possible efforts are made to increase revenues and
pass on the benefits to customers. The Freight Business Unit is headed by an additional General
Manager.

18

The Freight Rates structure is based on market trends, particularly of road transport, which is the
Railways' main competitor. The freight rates are no longer rigid but flexible, depending on the
lead, peak-off peak season, and quantum offered.
As on August 14, 2009 by Prime Minister Yousuf Raza Gilani between Islamabad and Istanbul via
Tehran. The first train carried 20 containers with a capacity of around 750 t (738 long tons;
827 short tons) and will travel 6,500 km (4,000 mi) from Islamabad, through Tehran, Iran and on
to Istanbul in two weeks' time. According to the Minister for Railways Ghulam Ahmad Bilour,
after the trial of the container train service, a passenger train will be launched. There are also hopes
the route will eventually provide a link to Europe and Central Asia, and carry passengers.

Problems face by Pakistan railway

Sources say a $400 million US loan to purchase 150 locomotives might be halted due to no
govt response
No new scheme in PSDP 2010-11,
major part of ongoing projects delayed
The Pakistan Railways (PR) faces a financial deficit of around Rs 40 billion due to
corruption, lack of locomotives and losses incurred by running passenger trains, while Rs
21 billion was being spent on wages and pensions.
The department has 16,433 carriage wagons for commercial purposes, out of which 8,005
have become out of order. To increase its revenue, the PR has decided to import an
additional 530 carriage wagons, while the department had already imported 1,300
commercial carriages from China, sources said.
A source said that the US has offered a $400 million export-import bank loan for
immediate purchase of 150 locomotives by Pakistan Railways, which may come to a halt
due to massive engine failures.
Railways officials had written a letter to the federal government seeking permission to
accept the loan as they find themselves in a desperate situation after failure of the Chinese
19

locomotives, and refusal of the Chinese company to honor the warranty on the already
purchased engines, however the department was yet to receive any positive response by the
federal government, he added.

Delayed: Due to the overall unsatisfactory situation and the high deficit of the PR, no
new schemes had been introduced in the Public Sector Development Programme (PSDP)
2010-11, while a major part of the ongoing projects has also been delayed.
Out of the total budget allocated for railways during the ongoing fiscal year 2010-11, Rs
5.982 billion has been earmarked for repairs and maintenance of commercial and passenger
wagons, Rs 800 million for rehabilitation of railway tracks under the rehabilitation plan,
against the estimated cost for the project at Rs 9.405 billion, Rs 200 million for doubling of
the track on Lodhran-Khanewal section with Foreign Exchange Component (FEC) of Rs
150 million against the total demand of Rs 3.297 billion for the same project, and Rs.250
million for procurement/manufacture of 530 high capacity wagons with FEC of Rs 20
million against the total estimated cost of Rs 4.134 billion. Sources said that as per the rules
and procedures of the Finance Ministry, the finance division would release 20 percent
amount of the total budget of railways amounting to Rs 12.5 billion for the first quarter
(July-September) of financial year, 2010-11, while funds under the PSDP would now be
released only for those projects which are nearly completed, and it would be the cause of
delay in new projects.
Similarly, Rs 2.159 billion has been allocated for procurement and manufacture of 75 Nos.
New DE Locomotives included FEC of Rs 1.359 billion against the total estimated cost of
Rs 12.700 billion regarding the same project.
o Rs 1.817 billion has been allocated for the replacement of old signaling gear from
Khanewal-Shahdra Section with FEC amount of Rs 1.2 billion against the total
estimated cost of Rs 10.720 billion for the said ongoing project. The Ministry of
Railways seems totally satisfied with its decision in July, of closing down 13
passenger trains, while more passenger trains would be suspended if the deficit
continued to increase in the coming days.

20

LAHORE: Employees of Pakistan Railways Advisory and

Consultancy Services (PRACS), an ancillary of Pakistan
Railways, have expressed suspicion and are planning to
approach the court to prevent the release of the sanctioned loan
of Rs6.1 billion for the railways, fearing the money will put
credibility of PRACS at stake.
However, on the other side, the management of Pakistan Railways and PRACS, following
approvals, guarantees and submission of documents, are anxiously waiting for the
release of the loan.
The employees, under the cover of PRACS Employees Association, are of the view that the
loan will not be used for the repair of locomotives and may be misused by railway
officials. The association represents lower as well as some high-ranking officers of
PRACS.
Cash-strapped railways got the Rs6.1 billion loan in January through its profitable ancillary
PRACS. PRACS was chosen for the purpose as no bank and financial institution was
ready to trust the loss-making railways.
The loan, provided by the National Bank of Pakistan through a consortium, has been
extended for a five-year period at an interest rate of 13%. PRACS will pay back the
loan in 10 biannual installments with guarantees from the railways and finance
ministry.
With the loan, PRACS will rehabilitate about 96 locomotives and has already selected five
retired and on-duty engineers for the job.
21

Talking to The Express Tribune, Employees Association President Khalid Bashir said total
assets of PRACS, including properties, were merely worth Rs1 billion and was
surprised over the approval of the loan.
Why PRACS is being awarded with such a huge loan for such an entity where trust is
lacking due to corruption scandals, he asked.
Bashir, who is director commercialisation in PRACS, said the railways had taken
responsibility for repaying the loan but questioned from where it would arrange the
money for paying huge installments, when it itself was relying on government support
to pay salaries and pensions to the employees.
We will file a petition in the Supreme Court to block the loan, which may lead PRACS to
bankruptcy, putting the future of over 800 employees at stake, Bashir added.
PRACS has hired some retired officers of the railways on key posts at high salaries for the
project. What these officers will do after retirement when they did not deliver
anything significant during their service, he asked.
Talking to The Express Tribune, PRACS Managing Director Junaid Quraishi, however,
stressed that the employees had nothing to do with such matters and if they wanted to
go to the court they were not restricted.
I take responsibility for saving PRACS. All documents and guarantees have already been
signed by the railways and finance ministry, he said.
Without locomotives, railway operations would discontinue and if this happened, then how
PRACS would continue to run, he asked. We hope that the bank will update us about
the loan on coming Monday as we have already waited for a long period.
Quraishi said PRACS would rehabilitate about 36 locomotives in the first year and after
repair each locomotive would give the railways revenue of around Rs3.5 million per
day.

22

Railway officials are waiting for the release of the loan, but their hopes are alive as the
Economic Coordination Committee (ECC) has once again given the go-ahead.
Published in The Express Tribune, March 31st, 2012.

Railways face Rs 40bn deficit due to corruption

* Sources say a $400 million US loan to purchase 150 locomotives might be halted due to no
govt response

* No new scheme in PSDP 2010-11, major part of ongoing projects delayed

By Zeeshan Javaid

ISLAMABAD: The Pakistan Railways (PR) faces a financial deficit of around Rs 40 billion
due to corruption, lack of locomotives and losses incurred by running passenger trains,
while Rs 21 billion was being spent on wages and pensions.

The department has 16,433 carriage wagons for commercial purposes, out of which 8,005
have become out of order. To increase its revenue, the PR has decided to import an
additional 530 carriage wagons, while the department had already imported 1,300
commercial carriages from China, sources said.

23

A source said that the US has offered a $400 million export-import bank loan for immediate
purchase of 150 locomotives by Pakistan Railways, which may come to a halt due to
massive engine failures.

Railways officials had written a letter to the federal government seeking permission to accept
the loan as they find themselves in a desperate situation after failure of the Chinese
locomotives, and refusal of the Chinese company to honour the warranty on the already
purchased engines, however the department was yet to receive any positive response by
the federal government, he added.

Delayed: Due to the overall unsatisfactory situation and the high deficit of the PR, no new
schemes had been introduced in the Public Sector Development Programme (PSDP)
2010-11, while a major part of the ongoing projects has also been delayed.

Out of the total budget allocated for railways during the ongoing fiscal year 2010-11, Rs
5.982 billion has been earmarked for repairs and maintenance of commercial and
passenger wagons, Rs 800 million for rehabilitation of railway tracks under the
rehabilitation plan, against the estimated cost for the project at Rs 9.405 billion, Rs 200
million for doubling of the track on Lodhran-Khanewal section with Foreign Exchange
Component (FEC) of Rs 150 million against the total demand of Rs 3.297 billion for the
same project, and Rs.250 million for procurement/manufacture of 530 high capacity
wagons with FEC of Rs 20 million against the total estimated cost of Rs 4.134 billion.
Sources said that as per the rules and procedures of the Finance Ministry, the finance
division would release 20 percent amount of the total budget of railways amounting to
Rs 12.5 billion for the first quarter (July-September) of financial year, 2010-11, while

24

funds under the PSDP would now be released only for those projects which are nearly
completed, and it would be the cause of delay in new projects.

Similarly, Rs 2.159 billion has been allocated for procurement and manufacture of 75 Nos.
New DE Locomotives included FEC of Rs 1.359 billion against the total estimated cost
of Rs 12.700 billion regarding the same project.

Rs 1.817 billion has been allocated for the replacement of old signaling gear from KhanewalShahdra Section with FEC amount of Rs 1.2 billion against the total estimated cost of
Rs 10.720 billion for the said ongoing project. The Ministry of Railways seems totally
satisfied with its decision in July, of closing down 13 passenger trains, while more
passenger trains would be suspended if the deficit continued to increase in the coming
days.

Pakistan Railways crisis

Pakistan Railways, lifeline of the country, is a national state-run transport service. It is under
the administration of federal government and its head quarter is in Lahore. It is an
important source of transportation throughout Pakistan. It carries millions of
passengers throughout the country. It used to carry huge freight in Pakistan. This
cheap and safe mode for passengers is now facing a number of issues. A number of
services of Pakistan Railways have been cancelled, suspended or terminated and many
more will be suspended in near future because of mismanagement and shortage of
locomotives, fuel and money. The chapter of all major services, from Lahore to
Karachi, has been closed. It is pertinent to mention that all AC services have been
stopped. The incompetent administration has failed to attain locomotives from any
quarter of the world. Passengers are suffering due to mismanagement of
administration. Pakistan Railways decision to suspend goods train service due to severe
25

shortage of locomotives and fuel is another blow to this organization. It is now basically
financially bankrupt organization. In other words it is on the verge of financial
collapse.

The political interference, nepotism, corruption, poor maintenance of tracks & bridges and
mismanagement in almost every field are the major causes of failure of Pakistan
Railways. Pakistan Railways purchased 69 completely built locomotive units from
China under 2003 agreement. These are about 37% cheaper than the European
locomotives but considered to be faulty. It is stated that 32 of these have already been
scraped. Dong Fang Electric Corporation has been severely criticized for producing
low quality locomotives. The other viewpoint is that misuse of the machinery was the
major cause of the failure of Chinese locomotives. According to Sheikh Rashid, the
former railway minister, crankshafts of locomotives worth Rs10 million were damaged
because of the use of substandard lubrication oil.

It may be mentioned here that normally a locomotive consists of six traction motors while the
Pakistan Railways is operating them with only three or four motors. This is the major
cause of mid-way breakdown of trains. The passengers, in such a case, have to wait for
a long time till repair or replacement of faulty engine takes place. Naturally trains are
too late and passengers can be seen sitting at platforms with their luggage. A number of
trains lack facility of light at nights because of the failure of the generators and ill
attitude of management. Another reason that prevents people to go by train is increase
in corruption by the ticketing officials. The reservation of birth is an uphill task. There
are complaints that reservation is confirmed after receiving bribe of hundred or more
rupees by passengers. Pakistan Railways is no more the best choice to travel for the
passengers.

26

Haji Ghulam Ahmed Bilour, federal minister for Pakistan Railways, is a very controversial
figure. He is considered to be somewhat responsible for the deteriorating situation of
Pakistan Railways. His viewpoint is that the whole railway system is obsolete. He
complains that half of the total locomotives are out of order. Almost 86 % bridges are
more than 100 years old. The trains, tracks and machinery are outdated or faulty. He
says that Pakistan needs 25 to 30 engines annually. He is now making a plan to repair,
hire or lease locomotives in collaboration with the private sector. Moreover, he believes
that a bailout package can be helpful to overpower the crisis. According to him delay in
funds to Railways is the root cause of the crisis. He accuses the federal government for
not releasing remarkable funds for the betterment of Pakistan Railways. All his plans
may end in failure because of corruption in the management, financial problems, his illadvised attitude and lack of vision. The efficiency of the railway minister is evident
from its almost nil performance. He believes that two mafia gangs are very strong in
Pakistan Railways but finds himself incapable to take any action against them. He
seems to be too weak to solve the issues and problems faced by his ministry.

The Chief Justice has expressed his disapproval for the high-ups of Railways in the following
comments: Ninety metric tons of silver worth millions was sold for mere Rs28,000 as
scrap, while a light bulb worth Rs60 is being purchased at Rs400, whereas absence of
maintenance turned expensive locomotives into junk one by one, besides a Grade-18
officer, a blue-eyed boy of the railways minister, is promoted to hold a Grade-20 post of
secretary purchase. In the words of Chief Justice the electricity wires meant for
electric trains from Lahore to Khanewal have been stolen. Moreover, he observed that
tickets were sold in advance outside ticket counters and tickets were not available at
railway stations. It is also in the notice of the apex court that land mafia has grabbed
Pakistan Railways land in different areas of the country. He has already ordered the

27

railways to approach the Sindh administration in this connection. Nonetheless,

everybody knows the efficiency of the present Sindh government.

Railways needed Rs2.2 billion to pay the salaries and pension to its protesting employees but
the government has not released enough money to overpower the deep financial crisis.
The economy of the country is under severe pressure and the poor administration
seems to be unable to solve the problem. The apex court has already remarked
Railways should take steps to make it functional as early as possible. Sheikh Rashid
Ahmad, former railway minister, blames corrupt officers of the department for the
present situation in Pakistan Railways. According to him only 156 locomotives out of
500 are in normal working condition. According to his statement 15,000 freight wagons
are not plying in the country and the business has gone in the hands of the private
sector. He claims that 200 coaches and several locomotives, imported from China, could
have been manufactured in the local Carriage Factory in Islamabad. Due to imported
coaches and machinery several labourers have lost their jobs or sent on forced leave. A
limited number of loaders have been appointed by the administration on the platforms
to carry the luggage of the passengers. It is stated that a particular amount of money is
received by the administration as a bribe from these poor loaders. In return they are
allowed to receive hundred rupees from the passenger to carry the luggage.

A private firm has been working under the contract to transport goods including medicines,
carpets, furniture and electronic appliances through Pakistan Railways. The monopoly
of this firm is an obstacle in the free trade of different goods. Pakistan Railways should
create competitive atmosphere to provide the customers with more facilities. Pakistan
Railways losses have reached billions of rupees. It seems difficult to bring trains back
on tracks in the present circumstances. The situation may not change unless corrupt
high-ups are removed, suspended and dismissed from the services. To restructure and
28

modernise Pakistan Railways under the present administration seems to be the dream
of a mad man. Pakistan Railways is sinking in the sea of corruption as no serious
efforts are being made to eradicate it from this department.

Pakistan railway crisis sets in deep

A shortage of locomotives has compelled Pakistan Railways (PR) to suspend more of its passenger
trains.
The number of daily suspensions is alarmingly high.
Railways is finding it an increasing challenge to clear arrears of Pakistan State Oil for its fuel
supply and pay staff salaries and pensions.
It maybe recalled that the recent failure to pay salaries and pensions of PR staff led to countrywide
protests with the train service throughout the country suspended.
President Zardari was compelled to hold an emergent meeting and direct a cash-strapped Ministry
of Finance to release one billion rupees to enable PR to make payment to staff.
The PR staff reserves the right to resort to going on strike if all past dues are not cleared.
The cause of the current state of affairs of PR is a continuous decline in income: during JulySeptember 2011 PR income declined to 351.5 million rupees from 427.6 million rupees during the
comparable period last year.
This decline is premised on a range of factors that include outright theft of locomotives and
expensive equipment from Railways workshops, mismanagement associated with heavier reliance
on bailout packages from the government that the cash-strapped treasury finds increasingly
difficult to extend and sustained failure to restructure and modernise PR operations.
Reports that a deal to purchase locomotives from a foreign country was compromised due to
allegations of commission being sought, is symptomatic of the malaise that currently besets all our
national institutions.
29

A way out is for the cabinet and all ministries to meticulously adhere to the public procurement
rules and not seek a way out by invoking the national interest clause contained therein.
The latest proposal by the PR to resolve its financial woes is to seek an Expression of Interest
(EoI) from the private sector to run its freight operations.
Public-private partnership has been the strategy enunciated several times by President Zardari.
However, the government has failed to provide an enabling environment.
At present, the federal government is heavily reliant on domestic borrowing to meet the needs of
its burgeoning budget deficit, a need that has been exacerbated by the decision of our economic
team to abandon the stalled International Monetary Fund programme and not seek another a fact
that has automatically led other bilaterals and multilaterals to suspend assistance for programme
lending (budgetary support).
Thus an enhanced borrowing from the private commercial sector, instead of from the State Bank of
Pakistan (IMF condition for the stalled programme), has led to crowding out of private sector
borrowing.
There is thus little likelihood that an EoI would be forthcoming anytime soon.
If one adds the ingredient of governments continued engagement in pricing of the service
provided by PR to this state-owned entitys profile then it is a foregone conclusion that no one
would be tempted to enter this arena.
The blueprint for PR reforms and restructuring like other badly managed loss-making state-owned
entities is available

Railways financial crisis aggravating persistently: report

Pakistan Railways (PR) is in the grip of serious financial crisis which is persistently
aggravating due to decline in the earnings caused mainly by the non-availability of
locomotives, hike in diesel price, reduction in the number of passengers and goods
trains and increase in the wages and pensions of the railways employees, said a report
sent to National Assembly's secretariat.

30

According to the report, a copy of which is available with Business Recorder, the details of
expenditure, earning and the subsidy provided by the government is as under: In
financial year 2007-08 railways expenditures were Rs 37074 million against Rs 19975
millions earnings and subsidy provided by the government was Rs 7303 millions.
In 2008-09 Railways expenditures were Rs 46204 millions against Rs 23160 millions earnings
and subsidy provided by the government was Rs 9034 millions.
In 2009-10 expenditures touched Rs 47094 millions against Rs 21887 millions income, while
subsidy was Rs 18432 millions.
In 2010-11 PR expenditures were Rs 51859 millions against Rs 18740 millions earnings, while
subsidy provided by the government was Rs 32642 millions.
The passengers and freight operations are shrinking as the department failed to meet the
budget target of revenue.
During the last financial year 2010-11, railways earned Rs 18.74 billions against the budget's
target of Rs 28.00 billions.
The situation has worsened to an extent that it would not be possible even to reach the figure
of Rs 18 billions in current year.
During the ongoing financial year railways officials were expecting Rs 38 billion operational
deficit.
PR is facing worst crisis in history.
The budget requirement for operation expenditures for the current year has been estimated
at Rs 60.561 billion but finance ministry allocated only Rs 45 billion.
The comparison of demand and funds authorised by finance division for current year reflects
that railways will never be able to meet the expenses on salary, fuel and pension.

31

As per the report, most of the operational assets of PR have become outdated, with 60
percent of locomotives, 70 percent freight wagons, 40 percent passenger coaches and 68
percent of its track have completed their life.

The crisis has adversely impacted the locomotives, reducing the fleet size to about 138 for
train operations.
Due to the financial crisis, Pakistan Railways have also reduced its spending on track
maintenance.
The Railways authorities are procuring only urgent and essential items for maintenance of
railways infrastructure.
The difference between demand and allocation of funds for maintenance of infrastructure
during last three years is as under: In financial year 2009-10 funds requirement was Rs
8935 million and allocation amount was only Rs 2500 millions and difference was Rs
6435 millions.
In financial year 2010-11 funds requirement was Rs 8935 millions, allocation Rs 1450
millions and difference Rs 7485 millions.
In financial year 2011-12 funds requirement was Rs 8935 millions, allocation was Rs 1500
millions and department had received 7435 millions against demand.
The report urged the government to take pragmatic measures to overcome the current
financial crisis and requested release of Rs 11.1 billion as a bailout package approved
by the federal cabinet.
If the government release this amount, railways administration can rehabilitate 145
locomotives during the current financial year, it said.

32

An amount of Rs 1 billion may be released to Pakistan Railways for creating a fuel reserve,
equivalent to one month of consumption to sustain its operations
Moreover the existing overdraft limit, which is currently capped at Rs 40 billion by the State
Bank since January 2010, may be enhanced to Rs 50 billion to provide cushion to
Pakistan Railways to meet the essential expenditure, the report concluded.

Pakistan Railway working on rehabilitation of railway system

ISLAMABAD: Pakistan Railways is working on various projects for rehabilitation and
development of railways system.
An official of Pakistan Railways told APP that the projects of doubling of tack from
Khanewal to Raiwind was initiated at the cost of Rs12617.400 million out of which only
90 km from Okara-Raiwind is left which will be completed in financial year 2011-12.
The rehabilitation of the existing track fromLahore to Rawalpindi-Peshawar will start with
the help of Asian Development Bank in year 2011-12.
The project for realignment of track from Kaluwal to Pindora on Jhelum Rawalpindi section
is likely to start in 2011-12.

33

The project of restoration of damaged assets on Mirpur Mathelo to Shahdadpur section and
Bin Qasim stations damaged as aftermath of December 27, 2007 has been taken in hand
and would be completed by year 2012.
Computerized online reservation system has been introduced on the Pakistan Railway
system and so for 42 stations have been computerized while 10 more stations are
planned in year 2011-12.
Installation of automated arrival departure board at major railway stations is likely to be
completed in the financial year 2011-12.
The project of procurement of 150 new diesel locomotives at the cost of Rs55,488 million was
approved by the ENEC in December 2010, contract agreement is being executed and
the project is expected to mature with in three years time.
Contract agreement for manufacture procurement of 75 new diesel locomotives amounting to
US $105.143 million was signed with Fong Fang Company of China.
Procurement manufacture of 202 new design passenger Coaches amounting to $ 134.452
million will be completed in year 2012-13.
Replacement of three break down rescue cranes and procurement of five sets of relief trains
equipment at the cost of Rs1674 million was approved.
Rehabilitation and improvement of track from Quetta to Taftan bears the estimate cost of
$671 million. The work will be completed in next 5 years subject to provision of funds
from international and national financial institutions.
Copyright APP (Associated Press of Pakistan), 2011

Pakistan Railways benefits from recent air scares

LAHORE:

34

The Bhoja Air disaster has provided a lifeline to the trouble-ridden Pakistan Railways (PR).
The organisation seems to be benefitting from the aviation industrys recent woes as
commuters distressed after the air crash and disturbed by recent incidents of plane tyre
burst and fuel leakages are now taking chances on a grounded railway service.
In days following the crash, Pakistan Railways witnessed an unprecedented increase in its
passengers, especially on the Business Express train being operated as a joint venture
between the Lahore and Karachi junction.
With growing public distrust in air safety of private airlines and the national flag carrier,
Pakistan International Airlines (PIA) operating at full capacity, commuters are now
flocking to the Business Express train as an alternate mode of travelling between
Karachi and Lahore.
According to Zaffar Chauhadry, Chief Executive Officer (CEO) of the Business Express,
Karachi bound trains witnessed additional passengers on Monday.
On a regular Monday, the overall passenger occupancy is estimated around 40% which has
increased up to 60% this week, Chauhadry added.
The increase in passengers, he said is definitely due to the recent air tragedies as people are
now frightened of travelling via private airlines.
Despite having its own problems, and limited fleet of operational locomotives, the PR has
managed to return life back to the platform of the otherwise vacant Lahore railway
station.
We were scheduled to fly on Sunday via private airline, but when news of fuel tank leakage
hit the news circuit we decided to travel via the rail network, said Jamal Shah, an
apprehensive commuter travelling to Karachi along with his wife on the Business
Express train.
I am not the only one to choose the Business Express, there are many families who have quit
air travel for the time being due to the series of incidents, he added.
35

The recent incidents have tainted the airline industry, but railways have always carried
more passengers during the summer season, mainly due to lower fares for airconditioned coach services, said Pakistan Railways spokesperson Ijaz Shah.
Conversely, the road network has failed to attract skeptic air travelers, primarily due to the
low quality of roads and longer distances, shortage of quality bus transportation
companies and dilapidated highways.
Correction: An earlier version of the article misspelt Chauhadry as Chauhady. The
correction has been made.
Published in The Express Tribune, April 24th, 2012

Pakistan Locomotive Factory, Risalpur

The Pakistan Locomotive Factory at Risalpur, a public spread on an area of 251 acres (102 ha),
was put into service in 1993 with the collaboration of Government of Japan at a total cost of
Rs.2284.00 million, including a foreign exchange component of Rs.1496.00 million. The factory
can produce two diesel-electric locomotives per month on single-shift basis, but this can be
doubled by introducing a second working shift. The factory is equipped with the state-of-the-art

36

equipment which can be employed in the building of diesel-electric locomotives of suitable

horsepower, as well as electric locomotives with minor adjustments.

Since 1993, twenty three PHA-20 type 2,000 hp (1,491 kW) diesel-electric locomotives have
rolled out of the factory. The ongoing project of 3,000 hp (2,237 kW) AGE-30 diesel-electric
locomotives is at the verge of its completion, which is a milestone in the history of the factory.
Apart from manufacturing new locomotives, the Pakistan Locomotive Factory has also
successfully rehabilitated five diesel-electric locomotives of GRU-20 Type and manufactured other
various spares/components for railway maintenance divisions and rehabilitation projects.

Accidents

37

Sukkur rail disaster

o

The Sukkur rail disaster occurred on January 4, 1990 in the village of Sangi near
Sukkur in the Sindh Province of Pakistan. 307 people were killed making it
Pakistan's worst rail disaster. The train (Bahaudddin Zakaria Express) concerned
was on a 500-mile (800 km) overnight run from Multan to Karachi and was
carrying many more passengers in its 16 carriages than its 1408 seat capacity. It was
supposed to pass straight through the village of Sangi but incorrectly set points sent
it into a siding where it collided with an empty 67-car freight train at a speed of at
least 35 mph.

4 July 2005
4 Dn Quetta Express which was to run through Sarhad was detained on the main line due to a fault
on the train brake system. The starter and advance starter were set to green while the 24 Dn train
crew were working under the affected coach. In the meanwhile,16 Dn Karachi Express was
given a paper line clear at Mirpur Mathelo to proceed to Sarhad .
The 24 Dn was leading the 16 Dn by half an hour. With this thing in mind the crew of 16 Dn
misjudged the GREEN starter signals as CLEAR and the RED outer and home as faulty.
(A report regarding the faulty signaling system at Sarhad was lodged about 45 days ago). The 24
Dn had an oil lit tail lamp which has a visual range of about 200 meters. Now as the 16
Dn approached the OUTER the red tail lamp of the 16 Dn brake van loomed into view. The 16 Dn
38

crew applied EMERGENCY BRAKE but the distance was insufficient because of a low braking
power.
Two coaches of the 16 Dn which had
dragging brakes were isolated from the rake's braking system which was
not reported to the driver of the 16 Dn. So he was unaware of the depleted braking power of
his 16 Dn . Nevertheless , his reflex action did save lives on the16 Dn. The 16
Dn ploughed into the detained 24 Dn because of the fact that the turnout was not set for the
loop line While the domino effect was in progress the 7 Up Tezgam was flying through
the Up main line. Only the locomotive and three coaches had crossed when the catapulted coaches
of the 24 Dn started nudging the rake of the 7 Up.
dust and blood, wailing humanity crushed steel bear testimony to the arrogance of the Railway
Ministry . More promises will follow but no budget will be sanctioned due to the fact that nothing
is left after the major chunk is eaten up by Defence .

Ghotki train crash

o

In its worst accident in recent years, three passenger trains collided on 13 July 2005,
derailing 13 carriages and leaving at least 120 dead. The Karachi Express ran into
the back of the Quetta Express while it was stopped at a station near Ghotki, and the
Tezgam Express travelling in the opposite direction hit several of the derailed
carriages. According to officials, the conductor of the Karachi Express misread a
signal.

39

Super Parcel Express

o

On 21 August 2005, the upcountry Super Parcels Express derailed while crossing
the Malir Bridge near Landhi in the Karachi Division. Eight bogies were
substantially damaged when an axle broke due to over loading. The rail traffic was
suspended for 24 hours. All down trains were terminated at Landhi and the rakes
and the locos made the turnaround from Landhi.

29 January, 2006
40

7 coaches of the 108 Down Lahore Express jumped the rails near Domeli, a station 33 kms short of
Jhelum. 4 of the coaches slid into a 50 feet ravine over the sharp curve. The 108 Down is the
fastest train on the PR network which covers the Rawalpindi-Lahore run in 3 hrs and 30 minutes.
The exact cause of the crash is not yet known and never will be. The casualty rate is surprisingly
low . It can be attributed to the crash safe design of the Chinese coaches

4 February, 2006
MULTAN - At least one person was killed and 30 others were injured when Lahore-bound
Karakoram Express derailed near Kalanchwala Station, about 30 km from Bahawalpur,
early on February 4, 2006.

The ill-fated train, carrying 933 passengers, was en route Lahore from Karachi when its
eleven coaches suddenly derailed and the engine plunged into the earth at about 3:15 am
between Samma Satta and Dera Nawab Sahab. At least five boggies overturned after the
derailment. The train comprised of 15 bogies hauled by engine number 6020.

The PR authorities term the accident to be an act of sabotage since fish plates were
removed before the arrival of the train. The rails are welded on this section therefore, the
presence of the fish plate will remain a mystery.
41

10 February 2006
A Chinese container train carrying chemicals collided with a stationary oil train in southern
Pakistan on Friday, sparking a fire but causing no casualties, officials said. The accident
happened at Ungar railway station around 180 kilometers (110 miles) north of Karachi.
The train carrying oil was on the track at the station when a northbound goods train hit it
from behind and a fire broke out. 18 wagons of the goods train were burnt out in the blaze,
and some oil was spilled at the scene.
The locomotive No.8201(HGMU30) hauling the chemicals special was completely gutted.
According to a Pakistan Railways technical staff, the oil special was detained on the block
section due to a brake fault while the chemicals special lost its vacuum on the steep down
grade. Pakistan Railways' vacuum brake system is in total disarray and spares not readily
available.
Cynics are of the view that the collision took place on a straight stretch of 10 kms and
sufficient distance for the crew of the U/C to apply manual emergency braking.

42

Mehrabpur train derailment

o

On 19 December 2007, the train, Karachi Express, an express service from Karachi
to Lahore, derailed near the town of Mehrabpur in the Sindh province of Pakistan.
At around 2:25 a.m. local time, fourteen of the train's sixteen carriages left the
tracks, some being mangled by the crash, others simply sliding down an
embankment into the water. Sabotage and terrorism were ruled out as the reason for
the crash, with officials believing a faulty track was the cause of the derailment.

Triple Train Crash in Pakistan

43

44

Future developments

Restructuring
In March 2010, the Pakistani government announced plans to split Pakistan Railways into four
privatised businesses; focussed on passenger operations, freight, infrastructure, and manufacturing.
In February 2010, "unbundling" was proposed, with various activities being outsourced, privatised,
or operated separately. However, complete privatisation has been ruled out.

New lines
In 2006 it was announced that a railway line between Gwadar and Quetta will be built and the
Bostan-Zhob narrow-gauge railway line will be converted into broad gauge in 2007 at a cost of
US$1.25 billion. Plans to increase train speeds, install more lengths of double track and to convert
the country's railways to standard gauge are also currently under way.

45

Track doubling

The Lodhran - Multan - Khanewal line (121 km) was dual-tracked; work
began in 2003 and completed on 16-03-2007.

The Khanewal - Raiwind line (246 km) is currently being doubled, at a cost of Rs.8.326 billion.
The project commenced in July 2005. The section from Khanewal to Sahiwal (119 km) has been
opened as Double line section on 17-04-2010. The work of dualization of railway track from
Sahiwal to Okara has completed and Okara to Raiwind Section is in progress and is expected to be
completed by June 2012.

46

The following lines are planned to be doubled

Shahdara -Bagh Lalamusa

o

Total Length 126 km

Total Cost Rs.14136 million

Completion Period 03 years from the date of commencement

Shahdara Bagh - Faisalabad

o

Total Length 135 km

Total Cost Rs.10486 million

Completion Period 03 years from the date of commencement

Lalamusa - Chaklala
o

Total Length 152 km

Total Cost Rs.23770 million

Completion Period 04 years from the date of commencement

Golra Sharif - Peshawar Cantt

o

Total Length 160 km

Total Cost Rs.19560 million

Completion Period 04 years from the date of commencement

Public-Private Partnership
Pakistan Railways has faced severe financial and Management Crisis under the minister ship of
Mr. Bilor. In those circumstances the Department has shake hand with Private Operators. In this
pursuit Pakistan Railway has started several trains on Public-Private Partnership. Pakistan
47

Business Express Train commenced its maiden Journey on February 3. 2012 and Shalimar Express
resumed its operation on February 25, 2012.

High-speed rail
In 2008, Pakistan Railways announced a plan of the construction of a $1 billion high-speed railway
line between Punjab and Sindh.

International lines

Direct rail connections with China were proposed by Pervez Musharraf in 2006.

A container train service from Pakistan to Turkey has been launched In spring 2009, a rail
link between Quetta and Zahedan (in Iran) was constructed, allowing Pakistan Railways
direct access to Europe and the Middle East. A gauge changing station was constructed to
the standard gauge at Zahedan and the Turkish Lake Van train ferry and the Marmaray
Tunnel under the Bosphorus. It is planned to run container trains and through passenger
trains. Pakistan plans to convert the Quetta line to standard gauge eventually.

Chinese bank withholds funds for Pakistan Railways

ISLAMABAD: An internal rift between the directorates of Pakistan Railways has put
the ministry at an awkward position jeopardising the release of a multi-million dollar
tranche from China, a railways official said on Tuesday.
The Exim Bank of China was supposed to issue a letter of commitment for the release of
$40 million to a Chinese so that it may supply passenger coaches to Pakistan Railways on
credit, but for issuing the commitment letter the bank charged a commitment fee of
$1,039,988.
48

Pakistan Railways did not pay the fee as per agreement and the Bank withheld the letter of
commitment for the payment of the first and second shipments of passenger coaches during
January 2012, the official said requesting anonymity.

There is confusion amongst the offices of the Director General, Planning; Director
Procurement (M&S); Managing Director CFI, and Director Finance as to which office of
the railways will process the release of Commitment Fee to Exim Bank of China, the
official said.

The Ministry of Finance had allocated the said amount and sent a written advice to the
Ministry of Railways about four weeks ago, but there was no action due to the said
confusion.

The Chinese firm in its last correspondence with the Ministry of Railways has urged it to
clear the dues of the Exim Bank of China payable under an agreement of the Pakistan
Railways with the China National Machinery Import & Export Corporation of China for
the import of passenger coaches. Otherwise, it cautioned, such a delay of payment can
seriously hinder future implementation of the project, especially the coming delivery and
local manufacture of CKD (completely knocked down) units.

In October 2009, the Pakistan Railways had singed an agreement with the Chinese firm
amounting to $134.452 million for procurement and manufacture of 202 new passenger
carriages under which Railways was to import 52 completely built railway coaches during
2010/11 while the remaining 150 coaches were to be built by June 2013.
49

The Chinese firm has successfully delivered 55 coaches to the Pakistan Railways in the
past couple of months and the dates of bill lading are January 1st and January 18, 2012,
respectively for the first and second batch, and dates of arrival at Karachi port are February
2nd and 15th, 2012.

World Bank may be asked to inject funds into Pakistan

Railways
ISLAMABAD: The government, in close collaboration with the World Bank, is
preparing a detailed road map for revitalizing the cash starved Pakistan
Railways that requires a multi-billion dollar injection over the medium to long
term to ensure a complete turnaround, official documents available with The
News disclosed on Sunday.
The government had constituted a Core Team, as specified by the Planning Commission, which
was assigned to formulate a Pakistan Railways Issue Note (PRIN) based on a rapid governance
analysis. According to the PRIN executive summary Pakistan Railways (PR) has been facing
serious crisis since 2007-08 as its passenger traffic reduced by 16 percent and freight traffic (on a
tonne-kilometer basis) by 70 percent. Revenues of PR has fallen by 6 percent while working
expense increased by 80 percent with labor related costs and pensions being 120 percent of
revenue in 2010-11.
Under the current organization structure and financial arrangement, the executive summary states,
it would be very difficult for PR to even return to break-even on working expenses without radical
surgery. In the absence of substantial reforms, PR will almost certainly suffer a continuing decline,
slowly but steadily becoming almost irrelevant to the general economy of the country.

50

According to the Core Team this needs to be so as PR has the fundamental requirement for a viable
railways (long hauls, potential demand, good infrastructure and trained staff) exist, but the
underlying problem that needs to be addressed is that PR cannot continue on the assumption that it
is a government department administering a monopoly. Any monopoly is long gone and PR will
go also unless it is restructured, both organizationally as a commercial business, it further
recommended.
The PRIN draft summary states that such a situation requires both short and long term actions as in
2011, the number of locomotives available for use reduced by average of 10 each month. By
August, only 8 locomotives were available for freight and 140 for passenger services compared to
100 and 170 respectively in 2008. The repair of locomotives needs to be accelerated as it will at
least slow the financial hemorrhaging as each locomotive earns Rs70 million per year on passenger
services and Rs120 million on freight services that is far more than the cost of the spare parts
required to keep them in service and the fuel consumed if they do operate.
The summary poses question that in the medium term stable and predictable funding arrangements
needs to be put in place but in the longer term the government must address that fundamental issue
of whether PR is a government department or a commercial business. If it decides the former, PR
will eventually wither away becoming an organization run solely for the benefit of staff. If it
decides the latter, PR needs a major reorganization both organizationally and financially, so that it
can compete effectively in the marketplace.
The Planning Commission in collaboration with Ministry of Railways and Pakistan Railways,
supported by the WB, is preparing a strategy to outline steps required to revitalize the countrys
rail system with focus on political economy of implementing its strategy.
On other side the Cabinet Committee on Restructuring (CCOR) decided to provide Rs.600
millions to Pakistan railways to pay the Wapda dues. The CCOR decided to increase the credit
limit of Pakistan Railways from PSO and also decided to ensure subsidy to cover the bill of
salaries and pension.

51

The CCOR also directed Pakistan Railways to utilize the funding from their PSDP allocations. The
CCOR also discussed the fast track appointments of CEO and CFO and early establishment of
board.

Conclusion
The political interference, corruption, poor maintenance of tracks, locomotives, couches, bridges,
stations and mismanagement in almost every field are the major causes of failure of Pakistan
Railways. Locomotives purchased from China had been broken down may be mentioned here that
normally a locomotive consists of six traction motors while the Pakistan Railways is operating
them with only three or four motors. This is the major cause of mid-way breakdown of trains.
The state of railways is very bad. It can never become a profitable organization, if we reduce its
deficit, it would be an achievement Current Government blames previous governments for decades
of failure to invest, but recognizes that the current administration is just as guilty. The cabinet
approved emergency funding of $125 million for the railways in January but it has yet to be
released by the finance ministry. The ministry requested 300 new engines to return to normal
operations but they did not gave a single penny
The whole railway system is obsolete. Half of the total locomotives are out of order. Almost 86 %
bridges are more than 100 years old. The trains, tracks and machinery are outdated or faulty.
Pakistan needs 25 to 30 engines annually. Pakistan Railway is trying to repair, hire or lease
locomotives in collaboration with the private sector. According to Haji Ghulam Ahmed Blour
delay in funds to Railways is the root cause of the crisis. He accuses the federal government for not
releasing remarkable funds for the betterment of Pakistan Railways. The efficiency of the railway
minister is evident from its almost nil performance. He seems to be too weak to solve the issues
and problems faced by his ministry.
52

Only 156 locomotives out of 500 are in normal working condition. 15,000 freight wagons are not
playing in the country and the business has gone in the hands of the private sector. 200 coaches and
several locomotives, imported from China, could have been manufactured in the local Carriage
Factory in Islamabad. Due to imported coaches and machinery several laborers have lost their jobs
or sent on forced leave..
Independent analysts estimate it will take at least five years and millions of dollars to haul the
infrastructure into the 21st century. Constant neglect has led Pakistan Railways into such bad
shape. An economy expert and former banker said. Pakistan Railway needs at least three to five
years to revive the department, and inject at least Rs. 25 billion, for infrastructure and locomotive
repair.
Pakistan Railways losses have reached billions of rupees. It seems difficult to bring trains back on
tracks in the present circumstances. The situation may not change unless corrupt high-ups are
removed, suspended and dismissed from the services. To restructure and modernize Pakistan
Railways under the present administration seems to be the dream of a mad man. Pakistan Railways
is sinking in the sea of corruption as no serious efforts are being made to eradicate it from this
department.

For improvement of Pakistan Railways industry, high priority should be given to

administration department.
Privatization is the only solution to save Pakistan railway, according to people opinion
New trains should be introduced

Recommendation
Followings are some of the suggestions to improve the condition for railway system of Pakistan:

53

1- First of all government should eliminate corruption in railways sector. Corruption is the hazard
that is destroying many sectors of Pakistani society.
2- Pakistan Railways should be privatized. This is also the possible solution of problem because
currently government of Pakistan has to bear the huge losses monthly. Other benefits of
privatization of Pakistan Railways include the increase in service quality and expansion of
Railways because government has nothing to invest in Pakistan Railway.
3- Government should ask Chinese for help in order to make it profitable organization because
China has made wonderful progress in railway industry. As China did in several other sectors
including coal and nuclear power generation and manufacture of automobiles it has granted access
to its enormous market by insisting on the transfer of technology. It has managed to develop its
railway industry to the point at which it was able to out-compete the established systems in Europe
and North America in winning the contract to build a high speed line connecting Mecca with
Medina.
4- India is also making impressive strides in the railway sector. The underground system in Delhi
has won the admiration of many foreign experts for its engineering as well as management. The
inter-city system is being modernized in terms of both the quality of service on offer as well as the
new equipment being used. The Indian and Chinese systems are by far the largest in the world and
the two countries as a result of the advances they are making will come to dominate the world
railway industry and business. Pakistan being a neighbor of these two rapidly growing and giant
economies could benefit enormously from the development of the two systems.
5- Pakistan is blessed with coal reserves and a single Thar coal reserve of Sindh is about 850
Trillion Cubic feet which is more than oil reserves of KSA and Iran put together i.e. 375 billion
barrels. Chinese and other companies had not only carried out surveys and feasibilities of this
project but also offered 100 percent investment in last 7 to 8 years but the Petroleum Gang
always discouraged them in a very systematic way. If these reserves are exploited properly then the
deficiency of fuel can be catered for the railways.
The best solution of this problem is the privatization of Pakistan Railway. We can take the example
of PTCL; before privatization PTCL's monthly losses were in billions. Today it is not only a

54

profitable organization but also providing excellent services to the customers. Corruption in
Pakistan Railways can only be removed by privatization of Pakistan Railways.

References
http://en.wikipedia.org/wiki/Pakistan_Railways
article Published in The Express Tribune, December 6th, 2011.
http://newsweekpakistan.com/scope/704
http://pakobserver.net/detailnews.asp?id=125216
http://www.newslinemagazine.com/2011/11/dead-mans-switch

55