Pakistan Railways Crisis: NA body Prepared 10 Point Charter of Demands

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Pakistan Railways crisis: NA body forwards 10 point charter of demands to govt:
ISLAMABAD: The National Assembly Standing Committee on Railways on Tuesday forwarded 10-point charter of demands to the government to bailout Pakistan Railways from financial crisis encompassing the recommendation to write off Rs40 billion outstanding loans.
The committee, which met here with Sardar Ayaz Sadiq in the chair at the Parliament House, directed Secretary Finance Dr. Waqar Masood to convey the proposals of the committee to the government to take immediate steps for steering the Pakistan Railways out of the current financial crisis and to waive off Rs4 billion State Bank of Pakistan’s (SBP’s) overdraft or converted it to equity.
The committee recommended that the government should take over the liability of foreign loans (currently Rs26.6 billion) including the pension liability (Rs6.50 billion annually) as was done in the case of Army and all other federal government departments.
The committee suggested that there should be separate account for salary (currently Rs12.5 billion annually), to be 100 percent supported by the government through guaranteed releases. Similarly, the committee recommended that there should also be separate account for fuel (currently Rs12.6 billion annually) to be 100 percent supported by the government through guaranteed releases.
Secretary Finance assured the committee that the government was serious to pull Pakistan Railways out of the existing financial crisis and restructure it. He also assured the committee that he would present the recommendations before the Cabinet Committee on Restructuring. He further said that Rs22 billion was allocated as subsidy to Pakistan Railways and assured that it would not be curtailed.
Minister for Railways Ghulam Mohammad Bilour said that Railways was promised Rs5 billion in January 2010 but the amount was not given. He further said that another demand of Rs11 billion was placed before the cabinet and it was said that the amount would be arranged from commercial loans, however, the ministry wanted it to be given by SPB, as it has low markup rate.
The Minister further said that the ministry has 5,000 wagons in ready conditions, which need 400 locomotives for meeting hundred percent deficit in the budget.
The committee also expressed resentment over the cut in railways’ budget, as Secretary Finance said that the budget has been reduced to Rs7.3 billion from Rs13.6 billion after cut in the development allocations.
Additional Secretary Finance Iqbal Awan informed the committee that the budget deficit of the Pakistan Railways reached to seven percent. He said that Pakistan Railways was given Rs72 billion in the last five years and added that it should also take steps to generate its own revenue.
The committee also recommended that there should also be separate allocation for infrastructure development to save the Pakistan Railways from further degradation and it has to be a continuous process on the pattern of Civil Aviation Authority etc. It observed that immediate requirement of PR was Rs11.5 billion, as committed by Cabinet and the Prime Minister and it should be provided forthwith.
The committee also recommended induction of new locomotives on emergent basis through transparent procurement system based upon life cycle cost and optional maintenance contract.
The panel suggested that accounting system should be modified as per international standards for business organizations. Divisions, workshops should have separate balance sheets to gauge their performance, the committee further recommended.
It recommended transparent selection of CEO/if re-structuring process is to go ahead and these should be selected initially from Railways and their term should be not less than four years. The selection should be by the Board of Directors or a high level committee comprising of personalities with known integrity and competence. Continuity of CEO should be dependent upon performance. Any DS who fails to perform should not only discontinue but will also became unfit for further promotion as well.
The committee also recommended that the option to restore the organization structure and autonomy of Railways existing prior to 1970 should be restored.
The committee also expressed concerns on the nomination of Railways board members and directed that the board should be reconstituted by including professional experts as its members.

(Business Recorder published it on Feb 16, 2011)

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