Contextualizing Privatization in Pakistan: A case study of Pakistan Railway

This study aims to explore and explain the context of Pakistan Railways. Transport is one basic necessities in present era and being one of most important aspect, this paper will discuss the history, functions, context, colonial roots of Pakistan Railways, objectives and functions of railways during British Raj, present status of Pakistan Railways. It also looks into proposed changes in organizational outlook that are proposed by stakeholders including donor agencies. Consequences of Privatization on Stake-Holders (citizens) has also been discussed which is proposed by dominant Stakeholders (donors, private firms). Theoretical Underpinnings has also been discussed that helps in exploring the emergence of such changes in the form of reforms. An effort has been made to give a complete picture of Pakistan Railways to the reader through this paper. According to Year book 2013-14 of Pakistan Railways, Pakistan Railways is a Federally administered Government Department under the Ministry of Railways and it is primarily responsible for planning, administrating, and establishing the passengers locomotive services, regulating the railway companies, industries and associated organization. But presently, there are many issues and challenges being faced by this Ministry as Pakistan Vision Vol. 17 No. 2 260 discussed by Asim & Nafees (2014) I their research. According to them Pakistan Railway is in continuing crisis since independence. It’s not because of single reason but plethora of pathological issues been discussed superficially only. These includes lack of leadership, half-baked initiatives of business, lack of discipline , inadequate locomotives, obsolete technology and poor infrastructure, managerial incapability, declining market share, over staffing and asset issues, inadequate transport policy, increasing budget deficit, liabilities and losses. According Pakistan economic survey (2012-2013) it’s reported that passenger traffic has been reduced to 92 trains a day which was 230 trains per day previously. On top of that freight trains have been reduced from 96 to just one per day. Consequently, revenues have radically declined by 25 % and working expenses have been augmented by 33 %. Costs and pensions of Employees amplified by 198 % of revenue earned in year 2011-12. Increase in fuel prices, depreciating infrastructure and rolling stock, inflation, growing dollar rate and availability of subsidized railway fare caused an increase in expenses for sustained train operations. Improvement in rail tracks and equipment can’t be tolerated by the railways because of already high expenses and no breakeven. Furthermore, survey also indicated that increase in pension plans and salary directed to the diversion of earned revenues to mandatory payments even at the cost operational expenses resulting in increased deficit. Ahmed (2011) in his article tells the actual case of the stationmaster of the Golra railway station who has spent 32 years there, Mr. Mohammad Ramzan, who shares that he remembers back in 1990s Pakistan’s carriage factory used to export coaches to Bangladesh and other countries. Unfortunately, now the situation is contrariwise, now Pakistan is the country that imports substandard locomotives and spare parts from China. He grieves that Pakistan Railways is now being treated as an orphan institution. He further goes on blaming the politicians, their interference in the form vested interests, poor implementation by bureaucrats and mismanagement of administration, and said, Contextualizing Privatization in Pakistan: A case study of Pakistan Railway 261 “While the rulers were building road networks and motorways in the name of development, no one thought about upgrading and maintaining the railways network”. Ahmed (2011) shares that when the motorway’s cost was estimated at Rs 24 billion, Pakistan Railways came up with a proposal of upgrading its entire network in Rs.10 billion. However, this porposal was neglected as the motorway was seen as a symbol of progress. Because of concentration in other modes of transportation, Railways is ignored profusely and according to Ahmed (2011) Revenue share for freight trains has decreased from 40 per cent to 25 per cent. Another institution emerged late 1970s called National Logistic Cell (NLC) which was meant for the transportation of goods and it directly competed with Pakistan Railways... Pakistan Railways was further sidelined as NLC’s role grew in the Afghan war and in the later years. National Logistics Cell (NLC), a military-run commercial transport company. Tahir (2014) stressed the same point by stating, The decline of the Pakistan Railways (PR) has been a result of a number of factors, but the coincidence with the rise of the NLC is telling. The army was called in aid of civil authority in 1978 to decongest the Karachi Port. The task was successfully accomplished. Instead of letting the civil authority take over and the private and public sectors flourish in the transport sector, the then military government used the experience to create the NLC. The PR was the worst sufferer. It not only lost the edge enjoyed in moving public sector freight, but also the orders of the second-largest spender of the budget — the