Pakistan Railways has achieved ‘improved operation ratio’ with an effective reform strategy, focusing on cost cutting, optimizing train loads out sourcing commercial operation of passenger, freight trains and capitalizing freight market.
“At present, Pakistan Railways (PR) is running 98 daily passenger services on different routes across the country,” a senior official in the Ministry of Railways told APP.
He said that the term profit or loss is related to body corporate. The profitability of any railroad is worked out on the basis of operating ratio.
The official said that any railroad operating below 100 percent is considered financially viable and Pakistan Railways was able to achieve operating ratio of about 98 percent for the financial year 2023-24.
He said that Pakistan Railways has skewed expense as it is running 57 percent of its passenger trains under Public Service Obligation (PSO) to cater the transportation need of masses of remote areas and thus has to absorb operating cost for all such trains.
He said that Pakistan Railways role of providing public service in remote and socially marginalized regions, without matching subsidies for such services has also constraints on its financial health.
Answering a question, he said the expenditure of only three heads including regular salaries, pension and operational fuel (HSD) is about 89 percent of the total expense, thus leaving only 11 percent of its total budget for utilities, repair and maintenance of its operational assets, he added.
The official said that in addition, Pakistan Railways is bound to follow Federal Government pay & pension structure, adding that pension, with exponential growth is a fundamental challenge which had been adversely impacted its performance.
He said that Pakistan Railways is bearing all its operating expenses including salary, fuel from its revenues except pension which is provided by federal government through annual grants in aid. In view of explained position, the Pakistan Railways cannot be considered as a loss making entity.