Pakistan Railways has requested the Prime Minister to approve a supplementary grant of Rs 13.26 billion to enable it to meet its operational requirements. Any delay in financial assistance is likely to create serious institutional unrest and civil commotion, well-placed sources told Business Recorder here on Wednesday.
Sources said that the Ministry of Finance has disallowed further overdraft facility to Pakistan Railways, which is likely to bring the entire railway operations to a halt. Railways officials stated that the loan has been accumulating, both foreign as well as domestic, which has also added to the financial burden.
Sources said that to tide over the current financial crisis, the Railway Ministry has sent a summary to the Prime Minister seeking approval of a supplementary grant. Sources said that budget estimated for 2008-09 of Pakistan Railways envisaged an operating surplus of Rs 12.69 billion and a subsidy of Rs 80.34 billion by the government for foreign and domestic debt servicing only.
They said that factors such as 20 percent increase in salary and pensions, 53 percent increase in fuel prices (from the time of preparation of budget estimates in February, 2008), 49.5 percent increase in Treasury Bill rate and 37 percent increase in electricity tariff have caused major upsets in our sanctioned budget.
They further said that PR expects a revenue figure of Rs 25 billion during the current fiscal year, which will be 25 percent higher than that of the previous year but it is still likely to experience a shortfall of Rs 4.6 billion. These factors have adversely affected Railways cash flows. Its overdraft with the State Bank of Pakistan has touched Rs 34.83 billion. According to sources, the current expenditure of PR is met from its overall revenue plus cash subsidy sanctioned by the GoP to make up for Railways' losses.