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Pakistan Railways is the state-owned railway company of Pakistan. It is a large
organization under the administration of the Pakistani Government's Ministry of
Railways. Pakistan Railways provides an important mode of transportation in the
farthest corners of the country and brings them closer for business, sightseeing,
pilgrimage and education. It has been a great integrating force and forms the life line
of the country by catering to its needs for large scale movement of people and freight.

Passenger traffic comprises 50% of the railway's total revenue. During 2008-2009,
This amounted to Rs. 4.8 billion. Pakistan Railways carries 65 million passengers
Annually and daily operates 228 mail, express and passenger trains. The number of
Passengers carried daily are thus about 178,000. Pakistan Railways also operates
special trains during occasions like congregations of the Dawat-e-Islami and the
Tableeghi Ijtima.

The biggest problem for Pakistan Railways is the soaring budget deficit. Although
Railways are traditionally not expected to earn profit. However, it is legitimate to
Expect from railways to meet at least operational expenses. The reason for this loss
The presence of unnecessary departments which are white elephant for Pakistan
Railways.
The biggest among those is the Railways Police followed by Stores and
Purchase. These departments should be abolished from Railways without further delay.
Their utility for railways is marginal at best. The Audit and Accounts, Railways Workshops
Division, and General Administration staff need drastic cuts. These organizations are heavily
overstaffed. If the policy makers have the stomach to make tough choices and get rid of the
white elephants and introduce necessary reforms, the Budget deficit of railways can be reduced
to bare minimum. If they will continue to Ignore the presence of non-productive over staffed
departments with very Insignificant contribution in overall performance e of Pakistan Railways,
the Department will continue to decline. It shall never be in a position to meet the
Expectations of public.

Pakistan railway is continually facing loss .there are so many problems faced by railway sector
of Pakistan. : The reasons of losses are multifold. The most important is the local purchase
system. Though there is a centralized General Store but various divisions/departments carry out
their own local purchases which is the root cause of financial misappropriation. Moreover, high
officials are involved in corruption in collaboration with the bureaucracy. Non-development and
unproductive expenditure is touching unprecedented heights. Contract and Commission system
are other factors. Most of leakages take place in General engineering branch. Moreover, the
government has imposed sales tax on sleepers which are used by Pakistan Railways. It is
interesting to note that these sleepers are produced by 5 factories of Pakistan Railways for its
own use. The government thus takes away Rs. 20 million as Sales Tax on sleepers every year.
Moreover Excise Tax has been imposed on tickets.
 It is true that the efficiency is on the decline but it is not because of workers. They are
performing duties honestly despite the fact that they are not properly paid, lack medical and
residential facilities and other problems which are of serious dimension. The decline in efficiency
is due to mismanagement and non-improvement in travelling facilities. The workers in the
present condition find themselves helpless. Moreover, there is no liaison between the workers
and management. In fact management undermines workers and the whole show is run by
bureaucracy. The issue of late arrival of trains was thought to be a serious matter. But no body
cares for it now. Goods Wagons have been abandoned on grounds of minor repairs. If these
trains are brought into commission it could be of financial assistance to PR. Similarly a lot of
revenue could be earned through a centralized reservation instead of privately run booking
offices.

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Railway Pakistan owns a total of 167,690 acres and its estimated value as per a study
Carried out by financial experts during 2002-2003 is Rs246 billion.
Pakistan Railways debt piles up to Rs56bn Pakistan Railways are continuously facing economic
losses despite the injection of subsidy worth billions of rupees to make it a profitable public
sector organization over the last two years. The National Assembly was told during 2008-2009
it suffered a loss of Rs12.66 billion which increased to Rs18.609 billion in 2009-2010. According
to figures placed before the lower house of the parliament, the government had provided a
subsidy of Rs7.30 billion to Pakistan Railways in 2008-2009 and Rs9.034 billion. However,
losses showed the subsidy had little impact on the overall performance of its operations

Moreover, on the eve tragic death of Shaheed Mohtarma Benazir Bhutto,

railway¶s assets suffered a massive loss of Rs6.5 billion. The incident also caused a loss of
Rs0.994 million due to suspension of train services. It also faced a shortfall of revenue of
Rs9.017 billion. Similarly, during 2008-2009 the organization had to face a shortfall in it revenue
of Rs6.439 billion. Likewise, the government increased pay, allowances and pensions up to 20
per cent which the PR had to pay from its kitty.

14.4bn fraud in Pakistan Railways accounts: AGP report Railways unable

to retrieve land worth Rs 5,110m from CDA WAPDA has erected pylons on 87,288 square feet
in Larkana The Auditor General of Pakistan (AGP) has pointed out irregularities worth
Rs.14.418 billion in the account of Pakistan Railways (PR) during the financial year 2008-09.
The AGP pointed out these irregularities in an audit report for the financial year 2007-08. The
report revealed that the total expenditure of PR during 2007-08 was Rs 43.687 billion against
earnings Rs 19.972 billion. A recoverable sum of Rs 3.482 billion was also pointed out in the
report. The report further revealed that recoveries of Rs 702,705 million were made during
2008-09.
The report said the non-recovery of rental charges worth Rs 2.189 billion
were outstanding on account of railway land being leased out. Retrieve: The report said further,
³The Pakistan Railways cannot retrieve a piece of land worth Rs 5,110 million from the Capital
Development Authority (CDA).´ Occupy: The report said that the Water and Power Development
Authority (WAPDA) has occupied 87,288 square feet the railway land in Larkana by erecting
electric poles.
The rental charges, amounting to Rs 78.559 million, have yet to be
recovered.³The NWFP government has acquired a piece of land in Bannu for establishing a
university, but the Pakistan Railways has not retrieved the released material, resulting in a Rs
 2.800 million loss,´ the report revealed. The audit report exposes that the PR sustained a loss of
Rs 155.324 million due to excessive consumption of fuel by its locomotives.

 
i A railway is suffering huge losses for maintaining un-remunerative lines. Losses on
railway¶s operation need to be minimized by closing un-remunerative lines where strategic
and other consideration do not warrant such services and where there is no potential for
improvement and fare rationalization.
i Railways are operating at low rates. A flexible policy for rates and fare requires to be
adopted whereby freight rates could be varied according to the type of commodities as well
as direction.
i The industrial units of railways are running at a loss. The locomotive factory, sleeper
factories and the carriage factory as well as the other large manufacturing units of
railways need to be converted into autonomous corporations and subsequently privatized
i The operational efficiency of the railways is very low. The overall efficiency of the railways
requires to be improved through better managerial and operational techniques. Suitable
measures would need to be taken to enable the railways to operate as a commercial
enterprise, by charging fare on commercial lines, opening or closing certain lines and the
rationalization of staff.
i The bulk of railways earnings are drawn from freight services which are not being accorded
the priority they deserve. Good traffic need to be accorded higher priority in the assigning
of locomotive power relative to passenger services, particularly on the branch lines.

Railways and NLC need to coordinate their operation and also

compete in their operations to economize on the inter ± modal movement of goods traffic. The
Railway should carry goods in bulk in the plains, while NLC and private road transport should
take over further distribution from these points in to the hilly regions. This will help the railway to
concentrate its resources of locomotives and wagons on the main line in the plains, after
withdrawing them from the hilly regions. This is in fact the best and most economical rail road
mix for the country.
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The main reason of losses of Pakistan railway is that they are unable to meet new challenges at
this stage Pakistan railway need restructuring from all aspects. The management must be
changed. The current losses of Pakistan Railways are reported to exceed Rs. 2.5 billion. This
organization which earned a profit of 3.6 million rupees (in 1971-72) ran into 7,756.3 million
rupees deficits in 1988-89. This shows that the performance of Pakistan Railways over the
years has been grossly unsatisfactory. All this calls for a serious look into the whole working of
this important organization.

A close study has revealed that Pakistan Railways has miserably failed to
compete with road transport in terms of passenger and cargo service. Its share in passengers
and cargo services which was 75.9 in comparison of 21.1 per cent of road transport, during the
2nd Five Year Plan period miserably fell to 21.7 per cent by the time of 7th Five Year Plan. This
declining trend speaks of incapability and the mismanagement on the part of the concerned
authorities at their respective levels. This also speaks of their indifference or inaptitude to take
timely necessary measures to check the deteriorating situation and meeting the increasing
competition from the road transport sector.

Perhaps, the main malady behind the Pakistan Railways has been its
inability to run on commercial lines, like most of other public sector organizations. It also suffers
from too much bureaucratic touch and unbusiness like operations. The sorry state of affairs of
this important organization can undoubtedly be attributed to a number of factors ranging from
lack of proper planning to huge non-production expenditure, over-staffing, large-scale revenue
leakages, un-deterred corruption and unscientific and inefficient management.

The ambitious plan being launched by Pakistan Railways to curtail its

losses is a welcome step. It aims at augmenting inventory of goods wagons, passenger
coaches and spares in addition to refurbishment of the rolling stock. It is also heartening that the
World Bank has agreed for providing the Pakistan Railways a credit of Rs. 13.2 billion rupees.

No doubt, it would help taking the measures such as increasing the

number of wagons and coaches, rehabilitation of the railway track, balancing and modernizing
etc., which were overdue. However, these alone would not be enough to check the heavy
losses that are being continuously incurred. The foremost requirement is the drastic changes in
the managerial and operational system of the organization.

A truly professional approach would be the best remedy. It would

enable to take bold and appropriate initiatives and decisions at the right time and in the right
direction. These decisions would have far reaching impact on various aspects including
curtailment of unnecessary expenditure, overstaffing, plugging revenue leakages, appropriate
re-routing, rescheduling restricting/discontinuing unprofitable operations while at the same time
improving the efficiency and the quality of both passengers as well as cargo services. Such
measures are a must for curing the sick Pakistan Railways and turning it into a task-oriented
organization capable enough of its counter-parts in many other countries of the world, including
our next door neighbor, India.
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