THE PAKISTAN government has ruled that there is no question of full privatisation of the country’s 7791 km network, but private concessionaires have been invited to run passenger trains on selected routes. Initial response has been mixed, with some companies reluctant to bid for fear that they would face unfair competition from PR’s own services. Eight routes were on offer, including Lahore to Peshawar, Faisalabad and Multan, Rawalpindi to Peshawar, Multan to Sukkur, Sukkur to Hyderabad, and Hyderabad to Karachi. According to Communications & Railways Minister Lt Gen (rtd) Javed Ashraf, freight concessions may be available too, although the strategic importance of fuel trains will preclude them from any privatisation. To offset competition concerns, a restructuring programme will include the establishment of a regulatory authority.

Ashraf said in June that PR would be separated from the ministry to become an independent corporation with its own budget. The move looks more feasible following improvements in the railway’s finances (RG 3.01 p152), and although cumulative debts amounting to Rs16·5bn need to be managed, PR now looks likely to receive a number of loans for rehabilitation and development projects. The World Bank was willing to provide a package worth US$100m on condition that the railway be privatised, but PR was not willing to accept the terms.

A loan worth US$400m has been offered by China, the Islamic Development Bank may provide US$30m, and the Organisation of Petroleum-Exporting Countries a further US$15m. General Manager Iqbal Samad Khan said last month that the government would provide Rs4bn this year for resignalling and track improvements; optic fibres are to replace PR’s existing communications network.