And the necessity to honour commitments
On the 24th of June, the Railways Authority forcibly entered Royal Palm, a country club whose property is owned by Railways (the club itself is managed and controlled by a private company with whom they had earlier entered into an agreement for a span of thirty years).
Railways Authority evicted all members and staff of the company and barred all non-officials from entering the club. Matters gained a certain level of normalcy when on 4th of July the Lahore High Court through an interim order, permitted the club management and its members to utilise the club and simultaneously allowed the Railways Authority to retain their presence.
Regardless of the manner in which Railways attempted to gain control of the club and regardless of the legalities of the matter, I am of the opinion that the very interest of Railways to gain control of the Railways Club aka Royal Palm is wrong and there are numerous factors for that.
Firstly, because Railways entered into a contractual agreement with a private company and contractual agreements are not simply agreements that you break and then justify doing so on technicalities.
Contractual agreements are much more than that; the extent to which an entity honors their commitments defines their character. Is the entity one that sticks to their word or is the entity of a fickle nature, which will turn away from their commitment given half a chance?
Beyond the high end morality it is of importance to realise that when one’s word has no value, others become reluctant in entering into any form of agreement due to the lack of consistency in ones character and more over one looses integrity and respect.
Secondly, Railways is in a bad shape, its suffering massive losses, the burden of which is being borne by the taxpayer. The quality of services is not good from any stretch of imagination. So why should an organisation which is struggling to maintain its affairs gain control of a country club, which is not even its core business?
Railways authority will make Royal Palm into a source of mass corruption and the club, which is generating hundreds of millions in revenue for the state will in no time be running in losses becoming a burden on the state.
Thirdly, the actions of the state are in the wrong direction, the model of Royal Palm is an excellent one in the sense that it is a better alternative to privatisation. The State gets to maintain its assets and it transfers management to a private organisation; which for the desire of profit makes money through managing the asset well.
These private organisations, in the process of generating money for themselves, also benefit the state; which gets paid a percentage of the revenue generated by the private company.
I believe that if the state has other similar assets they ought to transfer them to private management after giving them a framework and set goals within which to operate. As it is not the duty of the state to do business and they should shed the burden of doing business on to those who are businessmen and are there for making a profit.