Pakistan Railways: Get Rid of It After PIA Sale

The future of Pakistan Railways is dead and should be next in line for privatization after Pakistan International Airlines (PIA).

PIA has attracted interest from Germany, France, the Netherlands, Qatar, UAE, Malaysia, and Turkey, the same countries with some of the best railway infrastructure in the world. Looks easier, but the railways business is a lot more complicated than aviation.

“Pakistan Railways won’t make it and the new federal government must consider selling it now. Give it 2-3 years. Authorities were warned in the past when power generation was being underreported and now the public pays FPAs and QTAs because of that. Sell it now and let real estate and telecom have at it,” a former member of the Islamabad Chamber of Commerce and Industry told ProPakistani.

Despite numerous attempts to revive it, the Railways industry continues to falter, prompting calls for immediate divestment. Trucks are increasingly and rightfully usurping trains. Meanwhile, valuable railway assets rust away or fall prey to theft.

Railways is Cheaper Than Everything But Costs A Lot If Left Unused

Railways is in principle cheaper than road transport, including fees for loading/unloading, dispatching, and receiving passengers or goods at the origin and destination.

A train can carry roughly 3,500 tons or what 100 four-wheel trucks can hold. A mainline passenger train with 12 coaches can accommodate over 1,100 passengers. Other reasons included, this makes rail the best choice for everything.

But for a few years now, Pakistan Railways has carried less than 5 percent of national traffic and still employs thousands, gets access to the national power grid, and over 350,000 liters of diesel on a daily basis. This is a waste of critical resources.

Everything Looks Small After Comparing With India

Compared to India, our neighbor has successfully leveraged its railway network as an economic powerhouse. But Pakistani authorities have essentially left it for stray dogs in a haunted alley, where railways have incurred staggering losses amounting to Rs. 55 billion in fiscal year 2022-23 alone.

Pakistan Railways’ social score is also low, delaying booked fares for nearly 18,600 hours and arriving late on 60 percent of the confirmed slots during FY23.

Historically, Pakistan Railways enjoyed widespread popularity and efficiency until the 1960s, handling the lion’s share of commercial goods transportation. Subsequent decades witnessed a decline marred by vested interests and bureaucratic ineptitude, rendering it one of the country’s most useless and corrupt sectors. Today, its cargo handling capacity has dwindled and lost public trust while truckers flourish.

The misuse of trucks and trailers for inter-provincial transportation, despite being costlier and burdensome for the public, is a sign that the Railways business is dead and must be urgently sold off to avoid more embarrassment. Do you know railway land is also subject to encroachment and sabotage, and quick bait for ripping off telecom companies for fiber broadband track crossing?

Given its financial woes, Pakistan Railways last year drastically increased the right of way (ROW) charges of a single-track crossing. With the spread of fiber broadband, it seized the opportunity to make money from ROW charges and in 2007, increased charges to Rs. 2.7 million for 5 years. As of December 2023, these charges have crossed Rs. 3.8 million and telecom companies have no choice but to pay.

While ideal, opposition to the railway’s privatization stems mostly from politicians. Yet, policymakers acknowledge the critical role an efficient railway system plays in commerce, reducing transportation costs, and bringing untenable destinations within focus.

But unfortunately, a litany of woes, including neglect, poor policies, financial mismanagement, corruption, and outdated technology, has plunged the railways into massive budget deficits, leaving no hope for its long-term sustainability.

Prime Minister Shehbaz Sharif last week demanded authorities to build a rail link between Reko Diq and Gwadar port in Balochistan, which people privy to this development see as a last chance to revive what’s left of the sector.

After the PIA privatization, calls to divest Pakistan Railways grow louder. This analyst views entities like PEMRA and Pakistan Steel Mills to be pawned off in the coming years. But the debate on Railways must be re-ignited and expanded. After PIA, the Finance Division must sell the trains, or at least try to.

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    • agree with you now we can use railway for freight too. railway is best i have travelled in bus and i will prefer railway over bus.

  • What is the real reason behind Pakistan Railways failure???? This is Mufta Mafia, few passes to all Ministers / MNAs / MPAs and their families + Mufta to all Railway employees + Judges and their families. Root cause of Railways losses. The Mafias should be removed at all cost from Pakistan economy.

  • Why not privitise the biggest white elephants of our country, i.e beurocracy, National assembly & Senate….

  • Thanks these Govt authorities who’s take this initiative, & please terminate pensenion of old employees railway

  • If after 77 years we are looking for foreign investors: then what’s the point of sending the East India Company back to the pavilion? I believe we are a capable nation! We should work hard for reforms of our public institutes rather than protesting for privatization.

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