Pakistan Railways Incurs $545 Million in Losses, Chief Justice Summons Minister

“This is not a kingdom where anyone can go around doing whatever they feel like”

The Chief Justice of Pakistan Mian Saqib Nisar on Saturday took suo motu notice of losses amounting to Rs60 billion (US$545 million) that have been incurred by Pakistan Railways, one of the several state-run and loss-making enterprises like the national carrier PIA.

Unrelated to the suo motu notice on PR’s recurring losses and cumulative long-term liabilities, the state-enterprise’s officials told National Assembly last month that the government planned to invest $8.2 billion under the China Pakistan Economic Corridor (CPEC) project.

Justice Nisar ordered the secretary and members of the Railways Board to appear before the apex court in the next hearing with audit reports that can explain the causes that resulted in massive losses.

Railways Minister Khawaja Saad Rafique was also ordered to appear at the hearing, scheduled for April 12, with relevant records.

During the hearing, the CJP cited the example of Indian politician Lalu Prasad Yadav, saying that though Yadav had been deprived of formal education, he had turned Indian Railways into a profitable institution while he was minister.

“Lalu Prasad’s work is taught at Harvard University today,” the CJP remarked.

He complained that Pakistan Railways was portrayed as a profitable organization at political rallies, but “the reality of the railways is different”.

“This is not a kingdom where anyone can go around doing whatever they feel like,” he added.

Pakistan Railways had told the National Assembly (lower house) last month that it had suffered a loss of Rs21 billion (US$191 million) in the first six months of the ongoing fiscal year– between July 2017 and January 2018.

Out of the Rs90bn budget of the PR for the financial year 2017-18, funds to the tune of Rs56bn were to be consumed on salary and pensions only.

The expenditures on salaries and pensions alone amounted to 62 percent of the total budget of Rs90bn (US$818 million), and cannot be controlled, lawmakers were told. Railways as of 2015 carried a workforce of 80,000 employees.

Responding to questions, Parliamentary Secretary for Railways Raja Muhammad Javed Ikhlas said the government planned to invest $8.2 billion under the China Pakistan Economic Corridor (CPEC) project.

In April 2014, Pakistan Railways had taken out a half-page advertisement in The Financial Times soliciting interest in a high-speed rail link. The Sunday Times reported the 6.6 billion pound project would reduce the travel time for the 700-mile journey from 18 to seven hours.

The bad ways of Railways

Nisar Ahmed Abro, a Station in-charge in Sindh, and knows intimately well of what ails Pakistan Railways, while ppeaking to The New York Times in 2013, quipped: “The railways are the true image of our country. If you want to see Pakistan, see its railways.” Mr. Abro has made the right prognosis. There is nothing more wrong with the Railways than what is already wrong with Pakistan and its other public sector utilities.

Corruption, mismanagement, nepotism, and lack of professional expertise plague the Railways and other relics of a fast shrinking public sector in Pakistan.

It is important to understand that Pakistan Railways is dying a slow death. In the process, its assets are shrinking and so is the level and scope of services the Railway provides, a report in Dawn said.

As of 2015, the PR’s cumulative liabilities had reached 74 billion Rupees, Pakistan Railways is one state-owned enterprise that has not delivered a profit in ages, the report noted.

“With such a dismal outlook, optimism still abounds at the Prime Minister’s Secretariat where plans for a high-speed rail link between Peshawar and Karachi have taken root. One wonders when Pakistan has failed in running slow trains, how can it succeed in running fast ones. Wouldn’t planning fast and moving slow be yet another failed experiment with Pakistan Railways?,” the report added.

Thinking fast and slow is what Daniel Kahneman, the Nobel Laureate in Economics, thinks humans do. Planning fast and moving slow is what Pakistan Railways does, the report concluded.

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