Revamping Railways: First cargo train to run under Public-Private Partnership

Revamping Railways: First cargo train to run under Public-Private Partnership
First scheduled containerized freight train will start operations from December 25 between Karachi and Lahore under Pakistan Railways and private sector partnership. (REUTERS/file)
Updated 23 December 2018

Revamping Railways: First cargo train to run under Public-Private Partnership

Revamping Railways: First cargo train to run under Public-Private Partnership
  • Freight train service is expected to generate PKR 57.6 million revenue for loss making Pakistan Railways
  • Four freight trains would operate under PPP by March 2019
KARACHI: The first scheduled freight train under Public Private Partnership (PPP) will leave Karachi for Lahore on December 25, generating a revenue of PKR 57.6 million per month for the loss making state-owned Pakistan Railways, officials told Arab News.
 
“The first train carrying 75 to 80 containers will depart from Karachi port following the agreement between Pakistan Railways Freight Transport Company and Premier Mercantile Services (PMS),” Aasim A. Siddiqui, Group Managing Director of  Marine Group of Companies, said.
 
“The second train will be added on January 25, 2019 while by March 2019 four trains would be included in the fleet to strengthen cargo operations through railways”, Siddiqui informed adding “Our first cargo train has already been fully booked.”  
 
Federal Minister for Pakistan Railways, Shaikh Rasheed Ahmed, will inaugurate the train service.
 
As per the understanding between parties, the private sector will provide cargo while trains and operation services would be provided by the Pakistan Railways. “We have guaranteed the supply of cargo. We will pay PKR 2.4 million per train no matter it leaves with or without cargo,” Siddiqui revealed.
 
With the start of this freight cargo trains service the cost of transportation of containers would decline by 15 to 20 percent as compared to the transportation of cargo via roads. “The train will  reach Lahore dry port, located in Prem Nagar, within 48 hours as compared to a truck that takes around 72 hours,” Siddiqui noted.
 
The private sector will also provide door to door supply of cargo from the selected railway stations including loading and unloading services. 
 
Pakistan Railways, which is incurring huge losses has major focus on the passenger traffic segment of business which contributes 55 percent to the revenue receipts while 39 percent, up from 13 percent in year 2013, contribution comes from freight sector, fiscal year 2017-2018 figures show.
 
“Presently, the Pakistan Railways operates on average 10 cargo trains a day while the organization suffered around PKR 40 billion financial losses during the previous fiscal year, FY18,” Qurrat ul Ain, spokesperson of Pakistan Railways, told Arab News.
 

The major portion of cargo transportation by Pakistan Railways consists of coal that is shipped for coal-fired power plants operating in parts of the country.

During the five-year period of the outgoing Pakistan Muslim League Nawaz (PML-N) party, the revenue growth of Pakistan Railways increased from PKR 18.1 billion to PKR 50 billion while revenue expenditure soared up from PKR 48 billion to PKR 85.8 billion, according to performance report titled 'The Success Story 2013-2018.'
 
Huge cargo transportation potential exists in Pakistan where around 3.5 million containers per year comprising export and import goods are transported within the country. “We estimate that approximately PKR 300 billion worth of cargo transportation potential exists in the country,” Aasim Siddiqui claimed.
 
The operators of the freight train estimate that the around PKR 10 billion to PKR 20 billion annually would be added to the revenue of Railways while connecting Karachi with Lahore, Faisalabad, Multan. “According to estimates, around 50,000 containers per year will be transported to and from Karachi,” Siddiqui hoped.
 
The operation will also help authorities to reduce congestion in the port city from where the containers and other cargo is transported to other parts of the country mainly through trucks. A single train leaving Karachi port will render around 75 to 80 trucks off road.
 
Pakistan expects huge transportation activities after the completion of Gwadar Port which is being developed as part of China Pakistan Economic Corridor (CPEC) under China’s Belt and Road Initiative aimed at building a trade and infrastructure network connecting Asia with Europe and Africa along the ancient Silk Road trade routes.