The Pakistan Army’s National Logistic Cell (NLC) must have found itself in a situation to go nowhere as Pakistan Railways (PR) at the eleventh hour stepped back from a longstanding agreement to materialise which the NLC had bought 10 refurbished locomotives from a South Korean firm at a huge cost of $ 12.6 million.
The NLC and PR early last year had signed an agreement envisaging the former to launch a freight train service to transport imported goods from this port city, Karachi, to up-country destinations on public-private partnership basis.
The deal was clinched in line with the army-backed logistics giant’s plan to import at least 10 reconditioned locomotives from Ms KORAIL to be run as a freight train service, a profitable business the PR had long been banking on to sustain its now-depleting revenues.
NLC Director General Major General Junaid Rehmat had inked the deal with Ms KORAIL’s Vice President Paeng Jung in July 2012 for the supply of the desired locomotives within 10 months of the opening of Letter of Credit.
The deal, reportedly, had cost the NLC more than $ 12.6 million, at least $ 11.2 million for the locomotives and $1.4 million for hiring the Korean firm’s engineering consultants for two years.
Now as the NLC has finally have the 10 Korean-made railway engines supplied by Ms KORAIL and it was about to start operation of the long-awaited cargo train the Ministry of Railways has pulled out of the agreement. The 10 imported refurbished GMU-30-type locomotives are nowadays standing in Loco Diesel Workshop at Karachi Cantonment Station.
According to railway officials, the long-standing agreement with NLC has been cancelled on the directives of Railways Minister Khwaja Saad Rafique. The PML-N minister is said to have strong reservations over the anti-railways contract which was signed during the era of his predecessor, Ghulam Ahmed Bilour of Awami National Party.
Saad, the officials said, wondered why the railways ministry should let others, NLC, capitalise on its assets. “The agreement has been rendered null and void,” Nisar Ahmed Memon, railway’s divisional superintendent here, confirmed to Pakistan Today.
Memon said the annulled agreement was based on the policy approach of former railways minister, Bilour, that the present minister, Saad, does not endorse.
“Mr Minister believes in capitalising on railways assets,” the top official explained. Muqaddar Zaman, Karachi-chapter president of Railways Mazdoor Union, thinks otherwise. “The unionists’ pressure made the ministry to change its mind about the NLC agreement,” he claimed.
The labour leader said freight train service had been a major source of income for the loss-making Railways that should never be outsourced.
The fate of NLC’s newly-procured railway engines is uncertain as the PR has backtracked from the agreement turning the 10 locomotives, apparently, a liability for the state-owned logistics company.
Memon, however, said a new agreement was being worked out by the two sides. “It is a lease-like agreement we are negotiating with NLC,” the official said adding that if agreed upon the NLC would be renting the 10 locomotives out to PR which would itself be operating the freight service.
Asked to detail the rent price and other details Memon said all such modalities were yet to be finalised. Zaman, the unionist, tends to oppose even this settlement saying taking locomotives on rent would be tantamount to privatisation of the freight services. “Railways should purchase these engines on easy instalments from NLC instead of paying rent to it,” he said.
If materialised NLC would be the first public-sector entity to operate a train service on its own. The PR has provided locomotives and boggies to the passenger trains like Business Express, Shalimar Express and others operating under public-public partnership. Post-Dec 27 violence in 2007 is believed to have inflicted a huge loss upon PR that, reportedly, has long been facing an acute shortage of locomotives and passenger wagons.
Of the 500 locomotive the PR has only 140 are in a working condition while of the 10 allocated freight trains only one was running.