The Ministry of Railways has proposed to the government that the Pakistan Railways, over draft of Rs40 billion should be converted into an investment in the entity. An official source said the Ministries of Finance, Railways and the State Bank of Pakistan (SBP) were discussing the proposal and a meeting was scheduled to be held on October 25 to decide the issue. He said that two proposals were given to the government the first option proposed converting the Rs40 billion over draft into investment, while the second option seeks conversion of the over draft in a soft loan with reduced mark up.
Pakistan Railway has to repay Rs40 billion to SBP, which is incurring Rs4.3 billion annually in the interest rate. It is also proposed that the issue of outstanding amount should be taken up in the Council of Common Interests as Railways services were utilised by all of the provinces. President Asif Ali Zardari, in his meeting with the railway officials on October 17, asked the finance officials to solve the long standing demand of railway to remove the over draft of Rs40 billion. Minister for Railway, Ghulam Ahmad Bilour next day in his press conference on a question categorically refused to pay the over draft due to SBP by saying that railway’s financial position does not allow the entity to continue the payment of over draft to SBP.
The National Assembly’s Standing Committee on Railways in its February 16 meeting chaired by Ayaz Sadiq while presenting a 10-point Charter of Demands (CoD) to the government for approval demanded waiving off the Rs40 billion over draft with the SBP to bail out PR from its worst financial crunch. The cash-strapped entity of Pakistan Railways has been facing a major crisis for the last couple of months forcing railway officers to close down passenger trains as more than 300 of the 500 locomotives of PR are out of order, seriously affecting the service, causing an annual loss of Rs25 billion.
President Asif Ali Zardari also directed the Government to release Rs3.5 billion within a week – which ends on Sunday – for the payment of salaries and pension of the railway employees who have been agitating against non-payment of salaries to them. It was also decided in the meeting that Government will arrange a loan of Rs6 billion exclusively for the purchase and repair of locomotives from Commercial Banks. Railways need Rs800 million monthly for fuel, and by getting the Rs6 billion loan railway would able to repair its locomotives.
Railways seeks conversion of Rs40b over draft to investment
