Stop Subsidising Railways, IMF Tells Governments

The International Monetary Fund (IMF) has advised the Pakistan Ministry of Railways and other governments worldwide to reduce dependency on federal government subsidies.

A delegation of the IMF, led by the Country Representative Teresa Daban Sanchez, met with Minister for Railways Sheikh Rashid Ahmed and discussed in detail the financial situation of Pakistan Railways. The department is one of the largest public sector organisations and the purpose of the meeting was for the IMF to gain a better understanding of the fiscal debt situation of the ministry.
The previous government removed the railways from her agenda of privatisation and proceeded to restructure the organisation. The PTI government decided to remove Pakistan International Airlines from its privatisation list as well. Both public sector organisations continue to receive subsidies from the government.

During the meeting, the IMF delegation was interested in finding solutions to reduce the fiscal deficit and somehow increase earnings. The delegation stressed the importance of taking advantage of public-private partnerships in implementing development projects for the railways. The delegation also proposed that a consortium be formed with private parties involved.

Mr Rashid assured the delegation that his ministry appreciated the interest of the IMF in stabilising the country’s economy. He added that the railways will do all it can to increase earnings, and reduce its fiscal deficit.

The railways is focusing on increasing revenues from freight rains. The government has planned to increase them to 15. The ministry also recognises the need to improve the efficiency of trains — increasing overall speed of travel — by upgrading the main line from Karachi to Peshawar and the entire system will gradually be moved from broad to standard gauge. There is also a plan to construct an extra standard gauge track between Karachi and Hyderabad.

The railways has also set its eyes on improving the structure of the organisation — its productivity, and competitiveness. Other challenges include replacing older tracks, acquiring new locomotives, introducing modern carriages, revamping signalling and telecommunications systems, as well as overhauling the entire network to make it more responsive to the needs of the market.

The railways minister iaccompanied Prime Minister Imran Khan on his official visit to China, where the projects concerning the railways falling under the ambit of the China-Pakistan Economic Corridor will be explored. These projects include Chinese assistance in upgrading the main lines and the network in general. Mr Rashid will also hold meetings with top officials of the National Railway Administration, the National Development Reform Commission and the China Railways Engineering Group.

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