Railways wooing local, foreign investors to run its 24 trains

July 03, 2020

LAHORE: Pakistan Railways has invited local and foreign investors to operate its 24 trains in a preparation to get itself ready for Mainline-I project when the capacity of the railways will...

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LAHORE: Pakistan Railways has invited local and foreign investors to operate its 24 trains in a preparation to get itself ready for Mainline-I (ML-I) project when the capacity of the railways will increase manifolds and over 100 passenger trains will be running on the tracks besides the cargo and freight trains.

Pakistan Railways Chairman Habibur Rehman Gilani confirmed to The News that Prime Minister Imran Khan has given the approval of the Public-Private Partnership (PPP) model of outsourcing the trains operations while the railways will look after the infrastructure. “The UK Railways system is operating on the same model besides many other countries and the model proved successful,” he said, adding that it is relatively new in Pakistan. However, the model is adopted after recent completion of outsourcing two trains for two years successfully.

A team of senior management of the Pakistan Railways worked hard to devise a policy for outsourcing the trains on the public-private partnership model in which both railways and private sector interests should not be hurt besides the public will be beneficiary in it.

“After ML-I, the railways will not be able to operate its passenger trains completely due to limited resources when more than 100 trains will be on tracks so it is the best time to develop expertise to cope with the situation,” Habibur Rehman Gilani said, adding that currently mainly smaller routes trains are being offered for outsourcing to the private sector under the (PPP) model since the smaller parties can operate smaller routes.

Gilani said a lot of work has been done for this model but since it’s almost a new concept in Pakistan and both railways and private sector will learn and develop expertise. “We worked hard to devise feasibility and attempted to remove all the previous policy flaws which resulted in litigation with a private party,” he mentioned. For example in the new policy, railways could not remove any of the installation made by the private party without approval of the AGM Traffic. “We have to give sense of protection to the investors about the investment they will make,” he added. Similarly, due to policy flaws, track access agreement for cargo/freight trains made in 2012 was not implemented. All these policy flaws need to be removed to attract private-public partnership in the railways, he believed.

Railways chairman said one freight trains cost almost Rs one billion and Pakistan Railways encourages the private sector to bring their freight trains and operate on the tracks. In the past, the railways outsourced a train which operated successfully between Lahore-Karachi, but it ended in litigation when the private party stopped payment to railways on account of violating some agreed clauses by the railways. The case is now in arbitration and likely to resolve soon.

To a question will the party participate in the outsourcing process, which is in legal fight with PR and only the most experienced and financially stable party, Habibur Rehman Gilani said generally in such scenario such parties could not participate in the process but the legal team can give final opinion on it. “I will check it with the legal team of the railways”, he added.

He said since Pakistan was moving ahead after ML-I, railways officers should also be well-trained, adding outsourcing of trains at this point of time will also be helpful in improving their skills and developing market-based expertise.

To another question will foreign companies also participate in the (PPP) model outsourcing of train operation project, Gilani said all local and international investors are allowed to participate in the process. “It will be great success if some international companies come to Pakistan and run the trains,” he said, adding these international companies will bring their international experiences to the country and also benefit the railways hierarchy and locals to develop international standards expertise. He mentioned that the basic objective of outsourcing the train operations is to ensure the best quality passenger and cargo services alongside bringing down the Pakistan Railways loss.

The advertisement of outsourcing the selected trains operations will be published in the newspapers in a couple of days. According to the proposed plans, the Pakistan Railways is going to advertise the outsourcing of the following routes Gujranwala Passenger (total six trains - 217-Up/218-Down, 219-Up/220 Down and 221-Up/222-Down, Lahore-Gujranwala), Chenab Express (135-Up/136-Down, Lalamusa-Sargodha), Lalamusa Express (137-Up/138-Down, Lalamusa-Sargodha), Karana Express (253-Up/254-Down, Lalamusa-Sargodha), Faiz Ahmad Faiz Express (209-Up/210-Down, Lahore-Narowal), Sir Syed Express (35-Up/36-Down, running between Rawalpindi and Karachi via Lahore), Hazara Express (11-Up/12-Down running between Rawalpindi and Karachi via Sargodha), Attock Passenger (201-Up/202-Down, Attock-Mari Indus), Jand Express (203-Up/204-Down, Attock City-Jand), Mehr Express (127-Up/128-Down, Multan-Rawalpindi via Kot Addu).

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