By Syed Marwan Shah

ISLAMABAD, July 20: The Pakistan Railways (PR) suffered a loss of Rs144 billion between 2015 and 2020, shows a detailed report issued by the Pakistan Institute of Development Economics (PIDE), reports WealthPK. The losses include Rs44 billion deficit in 2020, including Rs36 billion in pension payments to 120,000 employees. Additionally, the department also got Rs45 billion in subsidy to overcome the losses.

Talking to WealthPK, Saddam Hussein, a PIDE research economist, said PR was one of the country's most discussed state-owned enterprises (SOEs) due to its repeated annual losses exceeding billions of rupees and widespread dissatisfaction with its performance. Furthermore, the enhancement and uplifting of this SOE is a mandatory element for the country’s economy, as it is becoming a burden on the national exchequer, he maintained.

Saddam said complete restructuring or privatization will be a viable option because patchwork will not deliver. Similarly, the economy of scale must be optimized to lower costs and boost revenues. Without a team of experts and effective management, the PR or any other public organization will never succeed in solving its problems, he added.

The report recommends that a biometric verification system should be implemented in order to verify the pensioners. A PR campaign has been launched by the government concerning the pension deficit. Moreover, the Pay and Pension Commission has also been established to provide guidance on such matters of the railways and other SOEs.

It also recommended that customer relationship management (CRM) systems should be created for customer relationship, including tracking arrangements, call centres, SMS alerts, etc. According to WealthPK research, the PR owns over 168,000 acres of land across Pakistan. If utilized properly through the public-private partnership model, this land could help the railways come out of the financial crunch it has been mired in for decades. This will help the department stand on its own feet.

Lastly, the report proposed comprehensive reforms for the railways department. If implemented, the department could be back on the track.

Credits: INP-WealthPk