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5, JUNE 2013

Failure of Corporate Governance in Pakistan Railway

Dr. Rukhsar Ahmed1 and Dr. Imam ud Din2
Professor and Dean, Preston University, Karachi, Pakistan
Asst. Professor, Baluchistan University, Quetta, Pakistan

All the departments are the

Auditor-General of Pakistan cause of loss and corruption
Abstract Pakistan Railways routed almost all the major cities of
report said fraud, wastage of to Pakistan Railways. The
Pakistan. British government gives us the worlds best railway funds, failure in recovering operational staff including the
infrastructure. Just few decades back people considered the
outstanding dues and other ticket checkers, police etc are
Pakistan railways as the safest and the economical mode of
transport. Due to the provision of good facilities and following the
financial irregularities involve in getting bribe or
schedules people liked to travel via Pakistan Railways to reach to amounting to billions of issue tickets to number of
their destination. Further more different companies and rupees were the reasons for passengers but this money is
government institutes relay on Pakistan railways for the the losses. According to audit not recorded in the book of
transportation of their goods safely and well on time. But report PR administration accounts.
unfortunately our corrupt railway management leads thisdevastating to recover Rs Tracks, engines and bogies
department towards the collusion. Top management of Pakistan 310.34 million on account of are rusting away or pulled out
Railways and the Government of Pakistan itself is involved in maintenance and operational of service due to a lack of
hiring ineligible and unskilled staff beyond the capacity. These are charges of sidings or level-
maintenance. The
the reasons which directed the Pakistan towards the heavy and
crossings from Defense maintenance materiel is
unbearable losses.
Department, WAPDA, and misrepresented and even sold
Keywords Corporate, Pakistan Railway, Ineligible and Losses other government institutes out at below the market rates.
for years. Discretely, PR also The National Accountability
sustained a loss of Rs Bureau (NAB) has filed a
9. INTRODUCTION 1,324.13 million due to the new corruption case of Rs
non-recovery of lease and 340 million in purchase of 69
rental charges from various locomotives against former
R ailways are the economical and safest
among the means of transportation. mode for passengers and cargo government and private Pakistan Railways general
It has a great contribution in expansion of economy for our organizations manager (GM) Saeed Akhtar.
country. A plan for a railway system in Pakistan was first The Pakistan railways NAB had arrested the former
projected in 1858.A survey for railway line was initiated in poor management, meager GM on Bano scrap corruption
1858 by Commissioner of Sindh, Sir Henry Edward Fere. It was internal structure and scandal. Saeed Akhtar is
projected that a railway line from Karachi City to Kotri, steam negligence had cost PR Rs2 accused of committing
navigation from the Indus /Chenab up to Multan and from there billion. Due to the lack of corruption in scrap scandal
another railway to Lahore and further than be constructed. Thus,mismanagement, over worth Rs 70 million and also
it was on 13th May, 1861 that first railway line of 105 miles employment and corruption involved in another scandal
distance was opened for public traffic between Karachi City and from the grass level to the top of corruption Rs 340 million
Kotri. In 1889 the line between Karachi City to Kemari was management leads the on account for repairing
opened and the line from Kemari to Kotri was doubled in 1897. Pakistan Railway which was Chinese engines.
considered as the most another case of millions of
The first railway line was positioned between Karachi and
revenue generating rupees corruption faces by
Kotri since 1861, the expansion of the railway network by the
department towards its end. the Pakistan Railways, in
British came at a rapid pace up until 1947. The dynamic factors
Up till 1980, the Pakistan 2012 Shalimar Express was
for this development were economic and strategic in nature. For
Railways accounted for handed over to private
instance to stop the invasion of the Russians from the West, the
65% of contractor and it has been
British built the Khojak tunnel, the fourth largest at that time, in
seemingly inaccessible areas of Balochistan to reach Chaman Pakistans freight traffic. But revealed that during the
unfortunately this was cut privatization of the train that
railway station down to nearly 15% by 2009
and now it at 1% or even less. contractor was given benefit
of millions of rupees illegally.
61. CORRUPTION IN of Pakistan Railways, signed
Now Pakistan Railways (PR) is facing a financial deficit of DIFFERENT deal of Shalimar Express
approximately Rs 40 billion and has so far closed down thirteen DEPARTMENTS
with the contractor on
passenger trains to address fiscal constriction. The OF cheaper rates for 25 percent
share of the
[ISSN: 2045-7057] 48

business. The private company had to spend Rs. 97.0 million

on renovation of the train but not a single rupee was spent by
the contractor on beautification of the train. Pakistan
Railways also handed over dining car and carriage coaches to
the private company without any charges and which causes a
loss of hundreds of million rupees to the unit.


Research and studies shows that the main reasons of

corruption and losses by the Pakistan railways are the
mismanagemenet, number of employees more than its
capacity and the involvement of top to lower management in
corruption either of lower or of higher level.
Due to the corruption and non deserving staff, Pakistan
Railways put up with heavy losses. Infrastructure, which was
considered as one of the worlds best is near to collapse.
Just few decades back people prefer the Pakistan Railways
as the cheapest and safest mode of transport but unfortunately
now they avoid it due to uncertainty in schedules of arrival
and departure of trains and unavailability of basic needs
during the travel.


The best remedy to take out the Pakistan railways from

prevailing worst conditions is Privatization, but for the
immediate recovery,
corrupt officials.
Rectify the over employment by downsizing.
Trained and developed the operational staff.
Up gradation of locomotives and waiting rooms at railway
Trains should
should follow the maintained
also be schedules and
and schedules

[ISSN: 2045-7057] 49