The International Monetary Fund (IMF) has advised the Ministry of Railways to get rid of its reliance on government subsidies as an effort to reduce fiscal deficit.
An IMF delegation, headed by the Country Representative Teresa Daban Sanchez, discussed the financial situation of the Ministry for Railways in detail.
The delegation met with Sheikh Rasheed, the Minister for Railways, to comprehend the fiscal debt condition of the department, given it is one of the largest public sector organizations.
As the current government has formally requested a bailout package from the IMF, the global lender wants to take a detailed look at the debt situation of the country including both internal and external debts.
Moreover, the lender organization will provide for a long list of recommendations/conditions to improve Pakistan’s economy so that the country is able to redeem the bailout after the specified time.
Notably, the previous government decided against privatizing the railways department, deciding to revitalize the organization by itself.
The current government has taken one step further and decided to remove Pakistan International Airlines from its privatization agenda. This decision implies that the flag carrier will continue receiving government subsidies.
In the said meeting, the IMF fixated on outlining solutions to cut back on the fiscal deficit and ultimately increase earnings. The delegation emphasized the essentiality of exploiting the public-private partnerships in the department’s development projects.
The delegation also recommended forming a consortium inclusive of private parties in this regard. The Railways Minister told the delegation that his ministry appreciated IMF’s interest in getting Pakistan’s economy back on track.
He assured the delegation that his ministry would take all necessary measures to increase earnings and reduce the fiscal deficit.
It is pertinent to mention here that the ministry is already working on ways to increase its resources. It has announced to roll out more freight trains to add to its revenue.
Moreover, the ministry is working to increase the efficiency and speed of the trains. Many new trains and tracks are in the pipeline, as announced by the ministry in the past few days.