THREATS to put Pakistan Railways through the mill of change were imple-mented last month when the cabinet ruled that PR be separated from the railway ministry and its management board replaced. The announcement was timed to coincide with the start of a new financial year and marked the opening of a three-day seminar on railway privatisation in Islamabad backed by the World Bank.
The new board will comprise a chairman and three members drawn from private sector companies plus a chief executive and a finance specialist. They will have the task of restructuring the 7789 km network into separate passenger, freight and infrastructure businesses. A restructuring authority will take over those of PR’s 110000 staff not needed to run the railway, administering pensions and arranging retraining - using funds to be generated by sales of railway property. Pakistan’s privatisation commission will try to sell PR’s assets, while a regulatory agency initially reporting to the commission will be tasked with developing policies to ensure fair competition.
Much of the responsibility for change will fall on Javed Burki, who helped draw up the restructuring plan (RG 7.97 p440) and has since been appointed Chairman of the Task Force on Railways. He anticipates completing the job within 12 months.
A victim of the upheaval is PR’s Rs7bn investment programme. While the Adtranz contract for 30 Blue Tiger locomotives (RG 1.97 p25) is not affected, with deliveries starting early next year, rebuilding of 48 diesels using a Japanese credit was cancelled - leading to a formal protest by the Japanese. Procurement of air-conditioned coaches with a related technology transfer deal may also be at risk. o
