The government has decided to inject Rs 3 billion in Pakistan Railways (PR) immediately from the approved package of Rs 11.5 billion to ameliorate financial health of the loss making entity, it was reliably learnt. An official of Finance Ministry told Business Recorder about the proposal for release of Rs 3 billion to PR, which would be submitted to the Prime Minister for approval ahead of releasing the money.
In reply to a question as to how long time it would take, the official said that the proposal would be sent to the Prime Minister either today or latest by tomorrow and as soon as he approves it the Finance Ministry would arrange the money for PR.
However, he did not elaborate despite repeated query that as to how the fiscal space would be created for arranging the amount for PR. The Federal Cabinet, in its meeting in December 2010, had approved a bailout package of Rs 11.5 billion for PR but no money has yet been released from the approved package. A top official of the Finance Ministry told Business Recorder that Minister for Railways Ghulam Ahmed Bilour had given a comprehensive briefing to the Finance Ministry last month on the financial condition of PR and sought financial support.
Finance Minister Dr Abdul Hafeez Sheikh had reportedly assured Bilour of every help on the engineering side for rehabilitation of locomotive factory but insisted that there was no fiscal space to bear the expenditure. The meeting also discussed the restructuring plan of PR.
At present the PR needs an immediate release of Rs 11.5 billion already approved by the Cabinet. The proposal pending for approval from the Prime Minister of Rs 3 billion would be part of this approved package. An official close to the Railway Minister accused the Railway Ministry of failing to convince the Ministry of Finance to release the bailout package. He said that some of Railway's demands related to non-development expenditure have been dropped by the Finance Minister, who was ready to release funds for development side on the completion of work.
"The presentation was not up to the mark to justify the needs of Pakistan Railways and the high ups of the Ministry are responsible for failure to convince the Finance Ministry for release of the bailout out package approved by the Cabinet," he added. Business Recorder tried repeatedly to contact the Minister for Railways, Ghulam Ahmad Bilour, to get his comments but according to his private secretary, Zulfikar Ahmad, the Minister was busy and not available for comments.
However, Mohammad Saleem, Director Operation and Spokesperson for the Railways dispelled the impression that unsatisfactory presentation by the Minister was responsible for the non release of the Rs 11.5 billion approved bailout package. He said that Finance Ministry was satisfied with the presentation. The train services, he added, were restored after resumption of diesel supply by Pakistan State Oil (PSO) on payment of Rs 200 million by the government.
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