DEVELOPMENT-PAKISTAN: Rail Disaster Revives Privatisation Calls

By IPS Correspondents Reprint | | Print |

Zofeen T. Ebrahim

KARACHI, Aug 4 2005 (IPS) - Pakistan’s worst-ever railway disaster has resulted in an enquiry, whose preliminary report is being viewed with suspicion, as well as renewed calls for privatisation of the ageing, fund-starved, state-run system.

The triple-train collision at the Sarhad railway station, near Ghotki, some 300 kms from this southern port city in the wee hours of the morning of Jul. 13 was reckoned the nation’s worst rail accident for the enormity of the disaster which wrecked 17 rail cars and left more than 170 people dead.

No one was surprised at the result of the somewhat hasty preliminary enquiry report. Even before the investigating team could make its final verdict known, railway authorities blamed the collision on the misreading of signals by a driver who, conveniently, died in the crash.

”On the day of the accident, the signalling system was in working order,” explained Director(Operation), S. Nasir Ahmad Zaidi, who said signalling equipment was old but ”not antiquated”.

The tragedy opened up a Pandora’s Box of awkward questions that the Pakistan Railways (PR) seem uncomfortable responding to. Going by past record, people have openly said that they have no confidence in the enquiry report.

” That is due to lack of transparency. The investigation reports of earlier accidents have never been made public so ordinary citizens do not know what action, if any, was taken against those responsible,” said a retired PR officer requesting anonymity.

The ministry for railways now plans to set up an inspection committee to examine the existing railway system, including tracks, signals and electrification equipment – though all this is coming rather too late for the hapless victims and their grieving relatives.

Why is railways, whose history dates back to the colonial period, in this state of disarray is the question on the minds of many people who may or may not be using the system though many of the answers are only too obvious.

”The fact is that very little public investment in infrastructure has taken place in the last quarter of a century and we are constantly paying the price for it,” said Kaiser Bengali, an eminent economist who does not hide extreme exasperation at the gross neglect.

”This is correct,” concedes Zaidi. ”From the early seventies the share/allocation of Pakistan Railways in the transportation sector of the federal budget has continued to drop. There was virtually no investment in the nineties as various steps were being taken by the then governments to privatise the railways,” he revealed.

It was in 1999 that the government started taking some interest in the floundering sector and its rehabilitation plan and began pumping money into it. ”With the completion of this plan, things will be much better,” says Zaidi.

According to experts, the antiquated PR system is in immediate need of upgradation. ”PR does not have enough money to invest in technological upgradation ” agreed Zaidi, blaming previous governments for the inertia.

So who will now invest in an industry that is ailing? The answer, some say, lies with private investors since public investments are hard to come by. But there are others, especially the railway bureaucracy who view that prospect with trepidation.

”There is presently no plan for its privatisation,” says Zaidi with finality.

”Privatisation of public services is a tricky issue, particularly in our country where vast income disparities exist, no social security nets are provided for the elderly and the poor and regulatory controls are inadequate,” says Farhan Anwar, an urban specialist.

”It may amount to creating a gigantic monopoly on this service and such major decisions may ending putting an additional financial burden on the poor,” he said.

”Given the present condition of PR assets (68 percent infrastructure, 56 percent locomotives and 35 percent passenger coaches being dilapidated and due for replacement), any privatisation initiative would require major investment to restore these assets to a reliable level,” Anwar said.

”Pakistan, having a very small capital base, and investment in railways being more risky than other propositions, complete privatisation at this stage is premature,” sums up the retired PR official.

With 95,000 employees (many of whom are political appointees) PR still does a job carrying about 65 million passengers a year besides moving a large volume of freight on a network that covers about 8,000 kms.

A pragmatic option, say analysts, is to go in for a public-private partnership. In 2001, a public-private partnership model was actually prepared under which the present public sector railway was to be bifurcated into infrastructure and operating set ups (on the pattern of European model).

The infrastructure set up was to remain a public sector entity to be owned by the state but managed as a commercial corporation while operations were to be run as an operating company at par with private operating companies. The idea was to view PR as an industry and treat it as one.

An ordinance was duly promulgated in 2002 to set up a neutral railway regulatory authority and to bring about necessary changes to the Railways Act. At the same time an open access policy to confirm the government’s commitment to the arrangement was approved by the executive committee of the railway board.

At that point the bureaucracy stepped in to sabotage what looked like a workable proposition.

”The railway administration succeeded in convincing successive chairmen of the railways and the ministers that this was a recipe for disaster for the PR and that they could turn around railways without going in for privatisation or even corporatisation,” said an insider who requested anonymity.

The facts, however, speak for themselves. A duly promulgated ordinance was never implemented.

Retired railway hands say that what is needed is the creation of an ‘enabling environment’ to make public-private partnerships acceptable if future attempts at the reform are not to die premature deaths.

Zaidi, is optimistic about public-private partnerships in the future. ”Recently, PR invited the private sector to examine the possibility of private participation in the operation of a limited number of freight and passenger trains,” he said.

The idea for now is to invite private players to bring in their own rolling stock and locomotives and operate trains on mutually agreed charges. ”This project is in its final stage and a pre-bid meeting will be called shortly,” Zaidi said.

At the moment, the government is already investing in development and upgradation but without a strategic plan involving private participation that is translatable into yearly plans, there is little hope that PR will come out of its present predicament.

Experts say the horrendous images that came out of Ghotki – carriages twisted and strewn about the landscape like a model toy train flung away by a spoilt child and the cries of trapped and seriously injured passengers may yet serve a useful purpose – that of getting the bureaucracy to act decisively rather than waste time with implausible enquiry reports.