Pakistan Railway (PR) is going to spend Rs 6.1 billion on repair of 96 locomotives that could be done by National Logistic Cell (NLC) at much lower cost, informed sources revealed to Business Recorder. An official of Railway Ministry said that NLC signed an agreement with PR last month under which NLC would finance the repair of 30 locomotives at Railway workshops at a total cost of nearly Rs 500 million.
PR will reimburse the cost within two years in the form of rebate to the NLC against normal freight charges. According to the Railways officials, the repair will be completed in eight to 10 months. Of the repaired locomotives, 15 will be used by the NLC, while the rest will be utilised by the Railways for passenger and freight train services.
Under the agreement, NLC is allowed to transport all sort of goods for all clients including Nato, however he noted that the agreement does not specifically mention Nato. Meanwhile the Economic Coordination Committee (ECC) of the Cabinet on March 13 approved to provide a government guarantee for Rs 6.1 billion loan for the rehabilitation of 96 locomotives.
Sources said NLC would spend an average of Rs 16 million to repair a single locomotive; however PR will spend an average of over Rs 62 million to repair the same locomotive. When contacted PR General Manger (GM) Operation Saeed Akhtar, he explained the cost discrepancy by saying that NLC would conduct minor repairs while PR would conduct minor as well as major rehabilitation of locomotives which would cost more. Rehabilitation of locomotives would help bring down the current deficit of PR, GM maintained.