Research Report On Pakistan Railway

HOW TO INCREASE THE EFFICENCY OF PAKISTAN RAILWAY 1
LETTER OF TRANSMITTAL
Mr. Farrukh Naveed

Research Supervisor
Department of Commerce
The Islamia University, Bahawalpur
29 Jan, 2010
Subject: RESEARCH REPORT ON “HOW TO INCREASE THE

EFFICENCY OF PAKISTAN RAILWAY”.
Reverend Sir,
This research report is in response to your request to find out the “HOW TO
INCREASE THE EFFICENCY OF PAKISTAN RAILWAY”. This research report
will provide you the overview of the research project. This report will assist you
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BUSINESS RESEARCH REPROT

The current study remains limited in its scope as it looks at the problems faced
Pakistan Railways and there solutions not at the organization as a whole. To
undertake the task team went through the existing literature on Pakistan
Railways, reviewed the current state of affairs through available data
consultations held with online researches about Indian turnover of railways and
the organization.
Pakistan Railways have been running losses since mid seventies. This persistent
failure owes to absence of a clear direction for the organization, a pessimistic
organizational ethos resulting from years of decline and political interference in
decision making to the detriment of commercial feasibility.
Organisationally roles and responsibilities remain diffused which create issues for
accountability. A number of decisions have been centralized in the Board or the
Executive Committee of the Board that absolves officers at the operational level
of any accountability. Financially, Pakistan Railways have alarming figures and
over the years it has become chronically dependent on overdraft from the State
Bank of Pakistan. The fiscal space for operations and maintenance has been
constricted; declining from 70% in 1971-72 to only 18% by 1995-96.
For all these problems we have given our best conclusions, opinions and
suggestions will be very helpful in improving the efficiency of Pakistan railway.

RESEARCH OBJECTIVES:
The study is part of a larger consultancy being undertaken in conjunction with a
separate team. The terms of reference assigned to this team have generated the
following outputs:
 What are the mean hurdles faced by Pakistan Railway in delivering its
efficient performance?
 Which factors are responsible for these inefficiencies?
 How to overcome these inefficiencies?
 What are the different procedural steps for turnover of Pakistan Railway?
Time Frame
The Research will be completed in one month starting from starting
from 22-12-2009 to 29-01-2010..
 Preparation of research proposal 7 days
 Data collection 7 days
 Data analysis 5 days
 Conclusion 2 days
 Final report composing 8 days

Introduction
Pakistan Railways have run losses since the mid seventies. These persistent losses have
assumed a chronic stature and continue to erode organisational assets, efficiency and
morale. A vicious cycle has resulted wherein organizational problems, including
structural and legal status, create the loss and the financial deficit further adds to
inefficiency. Over the last twenty years a number of studies have been conducted to
improve the state of affairs but these have not been effectively implemented. The Board
has undergone various transformations and there has been an increase in centralization.
This has added to the confusion while the decline of Railways continues.
The generation of railwaymen who had seen better days of Pakistan Railways have either
retired or will do so in the near future. For most employees of Pakistan Railways losses
and deterioration constitute an immutable reality. Faith in change and improvement
hardly exists. Revival of an organization that has resigned to a deficit and failure poses a
challenge for the country’s political leadership as well as its management. However,
reversal has to be pursued. There has to be ‘organizational turnaround’.
This report highlights key factors necessary for eventual turnaround but does not go into
details of the entire organizational structure in its recommendations. However, it focuses
on the design and role of the apex structure. The size of the organization and the chronic
nature of decline that has persisted for thirty years call for the reversal process to be

carefully designed in phases. It has to start with modest targets and uncomplicated
approaches. Even for this strong leadership will be required.
Turnaround strategies will have to begin with a clear direction for eventual reform and as
the senior management of Pakistan Railways pursues this direction it will need
intermediate strategies. The most immediate will have to be an autonomous structure at
the top level that is mandated, committed and competent to visualize 12 and implement
reform. Once the direction gets determined then any organizational change will need to
be pursued with clear objectives derived from an agreed direction. At this point changes
in the overall status and framework of the organization do not appear to be feasible but
changes within these bounds will be needed.
A review of the entire structure may be necessary after 5-7 years. Eventual form of the
organisation’s status and framework will depend on the results and direction of the
reform and the then prevalent environment.
Finally, woes of Pakistan Railways have a number of sources but the most devastating
has been a political trend of whimsical interventions. Without a change in the governance
culture positive reform will remain elusive. Railways’ decision making has to shift from
the current, politically imposed processes, to managerial processes that have
organizational efficiency as the goal. The whole transition will require strong support at
the political level to enable provision of resources as well as insulate the organization
from whimsical extra-institutional intervention.

History
Extent of the Railway network in 1909
The idea of a rail network was first thought of in 1847, with the possibility of Karachi
becoming a major seaport. Sir Henry Edward Frere, who was appointed as the
Commissioner of Sindh, sought permission from Lord Dalhousie to begin a survey for a
Karachi Seaport and a survey for a railway line in 1858. The proposed railway line would
be laid from Karachi (city) to Kotri. A steamboat service on the Indus and Chenab rivers
would connect Kotri to Multan and from there another railway line would be laid to
Lahore and beyond.

On May 13th, 1861 the first railway line was opened to the public, between Karachi
(city) and Kotri, with a total distance of 105 miles (169 km).
By 1886, there were four railway companies operating in what would become Pakistan.
The Scinde (Sindh) Railways, Indian Flotilla Company, Punjab Railway and Delhi
Railways. These were amalgamated into the Scinde, Punjab & Delhi Railways Company
and purchased by the Secretary of State for India in 1885, and in January 1886 formed
the North Western State Railways, which was later on renamed as North Western
Railway (NWR). This would eventually become Pakistan Railways in 1947.
Another railway line between Karachi and Keamari was opened on June 16th, 1889. In
1897, the line from Keamari to Kotri was doubled.
By 1898 as the network began to grow, another proposed railway line was in the works
from Peshawar to Karachi. It closely followed the route taken by Alexander The Great
and his army while marching through the Hindu Kush to the Arabian Sea. During the
early 20th century, railway lines were also laid down between Peshawar and Rawalpindi
and Rawalpindi to Lahore. Different sections on the existing main line from Peshawar
and branch lines were constructed in the last quarter of 19th century and early 20th
century.
In 1947, after Pakistan became an independent state, 1,947 route miles (3,133 km) of
North Western Railways were transferred to Pakistan from British India.

In 1954, the railway line was extended to Mardan and Charsada, and in 1956 the
Jacobabad-Kashmore 2 ft 6 in (762 mm) gauge line was converted into broad gauge. In
1961, the Pakistani portion of North Western Railways was renamed Pakistan Railways.
The Kot Adu-Kashmore line was constructed between 1969 and 1973 providing an
alternative route from Karachi to northern Pakistan.

List of Trains
• Allama Iqbal Express
• Bahaudin Zakariya Express
• Bahawalpur Express
• Baluchistan Express
• Bolan Mail
• Buraq Express
• Chiltan Express
• Faisalabad Express
• Farid Express
• Jaffer Express
• Karachi Express
• Karakoram Express
• Khush Hal Khan Khatak Express
• Khyber Mail
• Pakistan Express
• Rawalpindi Express
• Samjhauta Express
• Shalimar Express
• Sialkot Express
• Subak Kharam
• Subak Raftar
• Tezgam

International
Iran - A broad gauge railway line runs from Zahedan to Quetta, and a
standard gauge line is finished from Zahedan to Kerman in central Iran, linking with the
rest of the Iranian rail network. On May 18, 2007, a MOU for rail cooperation was signed
by Pakistan and Iran under which the line will be completed by December 2008. Now
that the rail systems are linked up at Zahedan, there is a break-of-gauge between the
Islamic Republic of Iran Railways standard gauge tracks and Pakistan Railways broad
gauge.
India - Thar Express and the more famous Samjhauta Express international
trains from Lahore to Amritsar, India.
Afghanistan - Currently there is no rail link to Afghanistan since no railway
network is present in that country, however Pakistan Rail has proposed to help build a
Afghani Rail Network in three phases. The first phase will stretch from the Chaman to
Spin Boldak in Afghanistan. The second phase will extend line to Kandahar and the third
phase will eventually connect to Herat. From there, the line will be extended to Khushka,
Turkmenistan. The final phase would link 1,676 mm (5 ft 6 in) gauge with Central Asian
1,520 mm (4 ft 115⁄6 in) gauge. It is not clear where the break-of-gauge station will be.

The proposed line will also be connected the port town of Gwadar via Dalbadin and
Taftan, thus connecting the port town to Central Asia.
China - There is no link with China however, on February 28, 2007 contracts
were awarded for feasibility studies on a proposed line from Havelian via the Khunjerab
pass at 4730 m above sea level, to the Chinese railhead at Kashgar, a distance of about
750 km.
Turkey - An Istanbul-Tehran-Islamabad passenger rail service was proposed
recently. Meanwhile a container train service was launched by the Prime Minister of
Pakistan Yousuf Raza Gilani between Islamabad and Istanbul on 14 August 2009. The
first train carried 20 containers with a capacity of around 750 t (738 LT; 827 ST) and will
travel 6,500 km (4,000 mi) from Islamabad, through Tehran, Iran and on to Istanbul in
two weeks' time.According to the Minister for Railways Ghulam Ahmad Bilour, after the
trial of the container train service, a passenger train will be launched. There are also
hopes the route will eventually provide a link to Europe and Central Asia, and carry
passengers.
Turkmenistan - via Afghanistan

Traffic
Passenger
Passenger traffic comprises 50% of the total revenue annually. During 1999-2000, this
amounted to Rs. 4.8 billion. Pakistan Railways carries 65 million passengers annually
and daily operates 228 mail, express and passenger trains. Daily, PR carries an average of
178,000 people. Pakistan Railways also operates special trains during occasions such as
Eid ul Fitr, Eid ul Azha and Independence Day.
Freight
The Freight Business Unit, with 12,000 personnel, operates over 200 freight stations on
the railway network. The Unit serves the Ports of Karachi and Bin Qasim as well as all
four provinces of the country and generates revenue from the movement of agricultural,
industrial and imported products such as petroleum oil & lubricants (POL), wheat, coal,
fertilizer, rock phosphate, cement and sugar. About 39% of the revenue is generated from
the transportation of POL products, 19% from imported wheat, fertilizer and rock
phosphate. The remaining 42% is earned from domestic traffic.
The Freight Business Unit offers services to meet customer requirements and reduce
costs through efficiency, innovation and modernization. All possible efforts are made to
increase revenues and pass on the benefits to customers. The Freight Business Unit is
headed by an additional General Manager.

The Freight Rates structure is based on market trends, particularly of road transport,
which is the Railways' main competitor. The freight rates are no longer rigid but flexible,
depending on the lead, peak-off peak season, and quantum offered.
On August 14, 2009 by Prime Minister Yousuf Raza Gilani between Islamabad and
Istanbul via Tehran. The first train carried 20 containers with a capacity of around 750 t
(738 LT; 827 ST) and will travel 6,500 km (4,000 mi) from Islamabad, through Tehran,
Iran and on to Istanbul in two weeks' time. According to the Minister for Railways
Ghulam Ahmad Bilour, after the trial of the container train service, a passenger train will
be launched. There are also hopes the route will eventually provide a link to Europe and
Central Asia, and carry passengers.
Accidents
• Ghotki train crash

In its worst accident in recent years, three passenger trains collided on 13 July 2005,
derailing 13 carriages and leaving at least 120 dead. The Karachi Express ran into the
back of the Quetta Express while it was stopped at a station near Ghotki, and the Tezgam
Express traveling in the opposite direction hit several of the derailed carriages. According
to officials, the conductor of the Karachi Express misread a signal.
• Super Parcel Express
On 21 August 2005, the upcountry Super Parcels Express derailed while crossing the
Malir Bridge near Landhi in the Karachi Division. Eight bogies were substantially
damaged when an axle broke due to over loading. The rail traffic was suspended for 24
hours. All down trains were terminated at Landhi and the rakes and the locos made the
turn around from Landhi.
• Mehrabpur train derailment
On 19 December 2007, the train, Karachi Express, an express service from Karachi to
Lahore, derailed near the town of Mehrabpur in the Sindh province of Pakistan. At
around 2:25 a.m. local time, fourteen of the train's sixteen carriages left the tracks, some
was being mangled by the crash, others simply sliding down an embankment into the
water. Sabotage and terrorism were ruled out as the reason for the crash, with officials
believing a faulty track was the cause of the derailment.
Future Developments

New Lines
In 2006 it was announced that a railway line between Gwadar and Quetta will be built
and the Bostan-Zhob narrow-gauge railway line will be converted into broad gauge in
2007 at a cost of US$1.25 billion. Plans to increase train speeds, install more lengths of
double track and to convert the country's railways to standard gauge are also currently
under work.
Electrification
In addition, there are several ongoing expansion plans into Central Asia and
electrification of the entire Pakistan Railways, estimated at a worth of about $2 billion
over the next five years (from 2005 to 2010).
High-Speed Rail
In 2008, Pakistan Railways announced a plan of the construction of a $1 billion high-
speed railway line between Punjab and Sindh.
International Lines
 China
Establishing direct rail connections with China were announced by Pervez Musharraf in
2006.
 Turkey

 Iran
In spring 2009, a rail link between Quetta and Zahedan was constructed and allowed
Pakistan Railways direct access to Europe and the Middle East. The gauge changing
station was constructed to the standard gauge at Zahedan and the Turkish Lake Van train
ferry (soon to be bypassed) and the Marmaray Tunnel under the Bosphorus. It is planned
to run container trains and through passenger trains. Pakistan plans to convert the Quetta
line to standard gauge eventually.

Literature Review:
There are several researchers who have contributed in finding out problems of Pakistan
railway and there solutions, we are also included in some of there followers.
In economic survey of Pakistan 2008-09 the condition and performance of
Pakistan railway is explained as follows;
A well performing rail transport infrastructure is vital for a country’s development.
Investment in a country’s infrastructure directly affects economic growth as producers
find the best markets for their goods, reducing transportation time and cost, and
generating employment opportunities. Pakistan Railways plays a significant role by
providing a safe, economical and environment friendly mode of transport.
Railways are a valuable source of employment while generating large amounts of
revenue to the benefit of the economy. An effective railway system facilitates commerce
and trade, reduces transportation cost (monetary and non-monetary), and promotes rural
development and national integration while reducing the burden on commuters. However,
there has been massive shift from railways to road transport, with latter now accounting
for 90 percent of passenger traffic and 96 percent of freight traffic.
Pakistan Railways has also improved the quality of its services punctuality and
cleanliness of coaches. During the current financial year passenger traffic freight
performance was satisfactory while it showed a negative growth during the last year so

far as passenger traffic is concerned. However, during July-March 2008-09 both the
passenger traffic and freight posted an increase of 7.5 percent and 19.4 percent
respectively. This trend is reported in Table: 14.4.
In order to continue improvements and to consolidate reforms, Pakistan Railways has
participation in order to increase its competitiveness, responsiveness and efficiency,
Pakistan Railways is planning to take a series of interlinked initiatives, which will enable
it to complete efficiency in the fast growing transport sector in Pakistan. Pakistan has
awarded a contract to an international consortium to carry out a feasibility study for
establishing a rail link with China. A rail link could further boost trade relations between
the two countries by facilitating the already growing trade with China and operations of
Gawadar Sea Port.

The PSDP allocations for the Railways sector were increased from Rs.3 billion during
2000-01 to Rs.11.280 billion in 2008-09. Pakistan Railway development projects have
suffered badly due to reduction of PSDP for the year 2008-09 from Rs.11.280 to Rs.
6.560 billion as a result of which many projects have been deferred. Major development
schemes include track renewal of 240 KM of rails and 220 KMs of sleepers planned for
main line. Additionally, contract agreement for procurement and manufacturing of 75 DE
locos has been signed and five locomotives out of 10 shall be manufactured in Pakistan
Locomotive factory Risalpur from completely knock down kits during next year. First
shipment of locomotive is expected in last quarter of next year. 100 CKD wagons
received from China will be manufactured of Pakistan Railways Workshop in
Moghalpura this year thus completing the scheme for Procurement/Manufacture of 1300
high capacity wagons. Rehabilitation of 400 old coaches is underway with 120 coaches
expected to be rehabilitated in this fiscal year.
Another on-going development project is the next phase in the doubling of track from
Khanewal Lahore (246 KM). Doubling of track has been completed from Khanewal to
Chichawatni Railway stations and track is in operation. In addition to these development
projects, various feasibility studies have also been undertaken to explore future prospect
and initiatives. Pakistan Railways is actively participating in National Trade Corridor
Programme and is trying its best to increase its share particularly in the freight sector by
assigning priority to the projects related to rolling stock and infrastructure for
improvement of freight train operations to reduce the cost of doing business because
Railway is cheaper and safe mode of transportation as compared to road.

Pakistan Railways has finalized following tenders for improvement of operation on the
system and contracts are at various stages of implementation.
• Procurement/manufacture of 75 D.E. Locos.
• Procurement/manufacture of 530 High Capacity Wagons including brake vans.
• Procurement/manufacture of 202 high speed modern coaches.
• Replacement of old signaling gear on Lodhran Shahdara Bagh Section.
The earnings of Pakistan Railways since 1998-99 till 2008-09 are given in Table:
Mr. Muhammad Anwar Saeed have done a grate research work on a research
project in response to the given subject
“Overview and analysis of transport sector in Pakistan”

In the railway section he analyzed too many typical problems faced by Pakistan railway
and suggested solutions to these problems.
It is sated that;
The possibility of Karachi as a sea port was first noticed in the mid of 19th century and
Sir Henry Edward Frere who was appointed Commissioner of Sindh after its annexation
with Bombay in 1847 sought permission from Lord Dalhousie to begin survey of sea
port. He also initiated the survey for Railway line in 1858.
It was proposed that a railway line from Karachi City to Kotri, steam navigation up the
Indus /Chenab upto Multan and from there another railway to Lahore and beyond be
constructed. It was on 13th May, 1861 that first railway line was opened for public traffic
between Karachi City and Kotri, the distance of 105 miles. The line between Karachi
City and Kemari was opened on 16.6.1889.By 1897 the line from Kemari to Kotri was
doubled.
The railway line from Peshawar to Karachi closely follows Alexander’s line of March
through the Hindu Kush to the sea. Different sections on existing main line from
Peshawar to Lahore and Multan and branch lines were constructed in the last quarter of
19th century and early years of 20th century.

The 4 sections i.e.Scinde railways, Indian Flotilla Company Punjab railway and Delhi
railways working in a single company were later on amalgamated into Scinde, Punjab &
Delhi Railways Company and was purchased by the Secretary of State for India in 1885
and in January, 1886 it was named North Western State Railways which was later on
renamed as North Western Railways.
At the time of partition, North Western Railway’s 1847 route mile was transferred to
India leaving route miles 5048 to Pakistan. In 1954 the railway line was extended to
Mardan and Charsada section and in 1956 Jacababad-Kashmore 2’-6’’ line was converted
into broad gauge. Kot Adu-Kashmore line was constructed during 1969 to 1973
providing an alternate route from Karachi to up country.
Cargo Express:
A Cargo Express Service introduced since 1974 is now running daily for transportation of
general cargo from Karachi City to Badami Bagh / Lahore and Vice Versa. This cargo
express has been re-structured with High Capacity and High Speed Wagons along with
terminal facilities to increase the present load of 1000 tones to 1600 tonnes A Similar
Cargo Service has been initiated between Faisalabad Multan and Karachi and vice
versa. Presently, these services are being run five times a week.
Dr Noman Ahmed has done really beautiful effort to lift up the level of performance,
credibility and image of the Pakistan railways.
He has stated in his article in down news paper on the topic;

“Massive but targeted reforms are required to lift up the level of
performance, credibility and image of the railways”
News reports have it that a container train service between Pakistan and Bangladesh via
India is being planned. Pakistan Railway officials and Ministry of Foreign Affairs are
reported to be examining the potential of this proposal. As a response to this positive
development, the business community in the country landed more in anticipation.
Pakistan has also toyed with the idea of linking with Iran, India and China with high
performance rail connections. It may also be pointed out that increase in freight trains
with competitive advantage to users is the only way forward to revive the declining status
of railways. The performance review does not show a promising status in any respect.
The Railways, which was once the most efficient and economical mode of transportation,
has reached a near moribund status. For those who spent their entire lives serving this
important national department with honesty, professionalism and diligence, it makes a
most painful reality to accept. This department offered one of the most useful hardware
infrastructures that were inherited during partition. North Western Railways, which
became Pakistan Western Railways after partition in 1947, was a profitable enterprise.
Spread over 7600 route kilometres, the network effectively connected the major cities,
towns and regions of what was then termed as West Pakistan.
The management, organisation and controls of the department were largely done on
professional lines. Most of the senior officers and engineers had obtained training and
experience under the British administration. Civil engineering, signals, traffic and

commercial cadres, mechanical and electrical engineers, accounts and finance were the
key units on which the railways were structured. A Railway Board was constituted in
1959 which was the highest echelon of management to oversee the performance.
The department was initially run with high levels of efficiency. Adherence to merit, high
levels of professionalism, openness to new ideas and approaches and the ability to
respond to new challenges enabled Railways to acquire high levels of efficiency in most
of its routine functions. Accidents were rare and level of service dependable. The rot that
spread and finally infested the railways began during the decade of 1960s. In order to
promote road transportation and the role of goods carrier enterprises, the government of
the time made deliberate attempts to neglect and discourage the railways. This approach
continues to this day without restraint. Countless road development projects with dubious
feasibilities are a citation in this respect.
Passengers and goods/freight movement are the two essential ingredients of services
delivered by the railways. As per norm, the passenger service is subsidised by the surplus
revenue earned through goods/freight transportation. The railways had to operate a
sizable number of goods trains to maintain financial balance. According to sources in
Railways, more than 40 goods trains (20 up and 20 down) used to operate from Karachi
to various destinations during the time period of 1960s to 1980s.
In other words, the railway was playing a key role in the transportation of various kinds
of raw materials and finished goods thus bolstering economic activities across the
country. Towards the end of the 1960s, the government shifted the emphasis to road

transportation. This approach acquired greater intensity during the Zia regime. The
National Logistics Cell (NLC) obtained a sizable market share in the transportation of
goods in a swift manner, thus depriving the Railways from its important source of
revenue. The budget deficit began to rise. According to a veteran ex-railway officer, the
number of goods/freight trains was reduced by half. For medium and long distances, the
goods transportation by railways is found to be at least 10 times cheaper than
roads/highways. Consequently, it has a lesser diesel consumption leading to lesser
requirements for fuel import.
Transportation insurance, safety records and handling were few factors that made
Railways a logical choice. However, this logic was brushed aside and the government
continued to employ NLC and other options of road transportation for goods. According
to a safe estimate, the government has spent over US $1.25 billion in excess during the
past 25 years for choosing the road option in place of railways. The frequent wear and
tear of roads, dubious award of road transportation contracts, high cost of maintenance of
road infrastructure and limited security of cargo were some of the outcomes
experimented as a result of this approach. Successive ministers have launched new fast
trains without proper feasibilities. Most of these ventures evolved to become financial
drags over the period of time. The financial deficit had its impact on all aspects of
departmental performance.
Railway stations are the public face of the service. Most of the stations have been found
in very dilapidated state. Some of the essential facilities are non-existent. Basic amenities

for passenger comfort, safety and facilitation hardware for the routine operation and
maintenance are declining in quality. During inspections, the concerned station masters
and other staff pointed out towards the shortcomings but follow up process for remedial
is either extremely slow or not forthcoming at all. Barring a few major stations, the
building facilities are also in run-down conditions. The budget deficit does not allow
Railway authorities to undertake any mass-scale facilities/hardware re-vitalisation
programme which is urgently required.
Most unfortunately, such loopholes only receive limelight after a major accident happens.
One fails to understand the logic of importing locomotives and carriages when factory
facilities for both exist in the country with enough potential to serve the prevailing needs.
Revival of Railways must constitute a national policy issue. Massive but targeted reforms
are required to lift up the level of performance, credibility and image of the railways. The
foremost issue pertains to the political will for extending reforms. Unless a full-scale and
objectively directional approach is developed, cosmetic renderings would hardly yield
any results. This aspect is difficult to ascertain as the current regime appears to be
inclined to auction railway lands as priority. These lands had been reserved for
operational needs of the system at various locations.
As land assets are already diminishing, the sell off shall be tantamount to curtailing the
scale of railways in the future. This matter needs a public debate and a befitting lobbying
response from the civil society to revive the lost interest of the regime in this vital nation-

building department. The Railways possess a carriage factory and a locomotive
manufacturing facility.
They require stocktaking and proper up gradation. In 1970s, several sensible solutions
were given by some European consultants for the system. However, no heed was paid to
their recommendations. It is disappointing to note that only Khanewal-Lahore sector has
the facility of electricity-powered locomotives. In a long span of 58 years of post-
partition history, no big leap was achieved in technology. Corruptions, nepotism,
declining dependence on institutional procedures and willful neglect of the system by the
decision makers have caused enough harm. Adhocism has eclipsed the remaining
potential of the department.
The revival of Railways cannot happen without a sound analysis and consequent
planning. The Planning Commission of Pakistan may constitute a committee of experts
from the country for studying the situation of the sector and proposing remedial. The
country cannot afford to delay a holistic revival of railways any further!
Dr. Awais Ahmad has written an article on;
“Swot Analysis of Pakistan Railway”
In the article strengths, Weaknesses, Opportunities, and Threats faced by Pakistan
railway are analyzed. Along with that the factors e.g. Political Factors, Economic Factors,
Sociocultural Factors, Technological Factors are also analyzed.

SWOT Analysis of Pakistan Railway:
Introduction
Based on the success of the Japanese Railways model, Pakistan Railways (PR) is urgently
following a similar strategy of converting its non productive assets into revenue
generating and land mark projects. For this purpose PR established the Directorate of
Marketing which works directly under the guidance of the Ministry of Railways to launch
new business ventures using surplus Railways assets coupled with capital investment
fully provided by the private sector.
The objectives of this Directorate are, through public-private participation, to conceive,
plan, finance and manage commercial projects which shall generate additional revenue so
as to help pay off pay PR’s long out standing over draft with the State Bank as well as to
fund developments and upgrading of core operations.
Strength
Introduction of New Trains
Pakistan Railways introduced new long lead mail & express trains between major
terminal of Pakistan Railways during 2003-2004 and 2004-2005.
 Sialkot Express between Rawalpindi – Sialkot
 Jaffar Express between Rawalpindi – Quetta
 Islamabad Express between Lahore – Rawalpindi
 Millat Express between Faisalabad – Karachi

Pakistan Railways connected Kasur, Pakpattan, and Lodhran with Karachi by Fareed
Express train. Havelian connected with Karachi via Rawalpindi, Sargodha, and
Faisalabad. Kohat connected with Karachi by Awam Express. Pakistan Railways has
introduced non-stop Islamabad Express between Lahore - Rawalpindi and Millat Express
Train between Faisalabd - Karachi with Modern Chinese Passenger Coaches. The journey
time has been reduced to 3hrs & 30 minuets between Lahore - Rawalpindi and 13hrs 30
minutes between Faisalabad Karachi. What we have done so far. Mafias eliminated in
Purchases. Theft and pilferage brought down to bare minimum. Outhouses of Railway
Bungalows allotted to employees resulting in saving of House Rent of such employees.
Railway Housing Societies dissociated from Railway thereby reducing the Electricity and
Gas expenditure. Privatization of Rawalpindi and Karachi Hospitals.20,000 ghost
pensioners eliminated.
Weakness
 Pakistan Railway has no Comport at all. People feel very difficulty while they are
using Pakistan railway service but they get very tied due to uncomfortable seats.
 It consume more time of their customers. The people cannot reach their
destination on time. So it is the wastage of time.
 · . Train is always overloaded with the bundle of people and Customer feel very
difficult to take their seats. With the rush of people, the customer’s dress gets
dirty.

 There is no proper check of tickets in Trains. Most of the time the 2 persons claim
of their seats because they have same seat numbers.
 The staff of Pakistan Railway is In-efficient that’s they give the tickets of same
seat to the 2 customers.
Threats
 Pakistan Railway should launch some comfortable Trains because customers feel
comfortable Journey through comfortable buses and vehicle like Daewoo and
Aero planes. So they capture the market of Pakistan Railway.
 Its Shipment facility is not so good so people or businessmen prefer other
substitute like buses, Aero planes, etc
 The earning of Pakistan Railway is always loses for the Government but on the
other side buses, Aero planes and other services are getting more and more
profits.
 The expenditure of Pakistan Railway is very high as compare to revenue.
Opportunity
In addition to above, twenty reservation offices have been planned to be computerized.
 Jacobabad Mirpur Khas Jahangir Road Mehrabpur
 Jheulm Sargodha Malakwal Shorkot Cantt
 Nowshera Lalamusa Bhakkar
 Chiniot Landhi Tando Adam

Doubling of Track
Pakistan Railways is presently working on Lahore Khanewal 121 Kilometers Section for
doubling of track. The project is expected to be completed by May 2006. Advertising
inside/outside trains and on Railway land. Operation of Cyber Cafes at major stations.
Operation of Twelve Petrol Pumps on Railway land.
Reducing Expenditure
 Cut down further on electric consumption
 Reduced the work force by another 5000 employees through attrition and
rationalization.
 Sui Gas connections will be handed over to Sui Northern Gas to avoid extra
expenditure on bulk supply
 Reduction in the number of train services on un-remunerative routes
 Ten Years Prospective plan of Pakistan Railways
A study titled as
“Towards an Organizational Turnaround Structural Analysis of
Pakistan Railways”
Study conducted for Pakistan Railways Advisory and
Consultancy Services (PRACS)
Prepared by
Javed Hasan Aly

Abdus Sami Khan
Sheherbano Burki
Faiza Ghaffar Khan
Pakistan railway is thoroughly analyzed, the structural problems faced by it and solutions
for them. It is stated that,
The current study remains limited in its scope as it looks at the apex structures of
Pakistan Railways and not at the organization as a whole. To undertake the task the team
went through the existing literature on Pakistan Railways, reviewed the current state of
affairs through available data consultations held with various officials of the organization.
Pakistan Railways have been running losses since mid seventies. This persistent failure
owes to absence of a clear direction for the organization, a pessimistic organizational
ethos resulting from years of decline and political interference in decision making to the
detriment of commercial feasibility.
Organizationally roles and responsibilities remain diffused which create issues for
accountability. A number of decisions have been centralized in the Board or the
Executive Committee of the Board that absolves officers at the operational level of any
accountability. Financially, Pakistan Railways have alarming figures and over the years it
has become chronically dependent on overdraft from the State Bank of Pakistan. The
fiscal space for operations and maintenance has been constricted; declining from 70% in
1971-72 to only 18% by 1995-96.

An important product of the constriction of fiscal space has been the depletion of
functional assets, as unlike the road sector Railways has the responsibility for
development and maintenance of its own infrastructure. Presently most infrastructures in
the use of Pakistan Railways have become obsolete.
Pakistan Railways as an organization continues to be more of a public service department
and commercial viability remains a secondary priority. Organizationally, the first major
change in the apex structures appeared in 1959 when some of the powers given in the
1890 Railways Act were transferred from Railways to the Central Government. In 1962
came the Ordinance that defined the structure of the Railways Board. Under this
Ordinance a 4 member board including the Chairman, who was also the Chief Executive
Officer of Pakistan Railways.
Under a correction slip issued in 1963 the Board was shifted to Lahore and Member
Finance came under direct control of the Ministry of Finance. Both the Ordinance as well
as the correction slip considered the Chairman of the Railways Board as ex-officio
Secretary to the Government of Pakistan.
In 1982, under a Presidential Order, the Ministry and Board were merged and Secretary
Railways became the Chairman also. This practice continues to date. In 2000 the size of
the Board was increased while an Executive Committee of the Board was created.

Members of the enlarged Board included representatives of the provincial governments,
three members from private sector and a number of federal secretaries including secretary
P&D, Secretary Communications and Secretary Finance. Total number of the Board
members was eighteen.
This number was reduced in 2002 when provincial representatives and private sector
members were removed.
The current structure is replete with anomalies that have crept into the structure through
various amendments mentioned above. Resultantly the Board has become unwieldy. In
fact Federal Secretaries who are members normally do not attend and send in their
representatives. In any case they do not have the requisite interest or expertise to be
members of the Board. Secondly the Executive Committee of the Board reviews all
executive decisions that diffuse responsibility and accountability processes.
Pakistan Railways needs organizational turnaround and that can only be initiated through
addressing the issue of financial losses. This calls for retrenchment and repositioning.
The former calls for cost reduction while the latter demands revenue enhancement. This
will reduce the losses. Organizational restructuring should be pursued only if it is
required for the above purposes.

In the end success in the reform will depend on political will which cannot be created
through any process but has to be given. In fact the most important factor in the
turnaround of Indian Railways has been the unwritten compact between the political
forces to eliminate all political considerations from decision making processes. In
Pakistan also success will only be possible if such a commitment exists.

Problems of Pakistan Railways
Pakistan Railways have been facing a persistent deficit since 1975-76. This has grave
implications for the national exchequer, the morale of the organization, renewal of
essential assets and consequently the quality of the service. It indicates existence of
chronic problems that have perverted the organization’s performance. While a detailed
analysis of the organization requires a longer time period and more resources, some
major issues identified are:
Absence of Clear Direction
In discussions with officers of Pakistan Railways concern for the abysmal state of affairs
was universal. However, there was no clarity on a vision for a desirable change. There
appeared to be the anomaly of the desire for improvement jarred with latent fears of the
results of the reform. These fears result from an absence of a clear understanding of the
end point of the reform. Reform for what? The question remains unanswered in the minds
of most officers and a collective vision does not exist.
The vague sense of vision and direction also pervades the upper echelons of decision
making. The Government has still not been able to articulate a clear direction for the
national railways. In any case, in the absence of an overall national transport policy it is
difficult to find a viable solution for railways in isolation.

Vision Statements of Railways officers

Information from study;
“Towards an Organizational Turnaround Structural Analysis of Pakistan Railways”
Study conducted for Pakistan Railways Advisory and Consultancy Services (PRACS)
Prepared by
Javed Hasan Aly
Abdus Sami Khan
Sheherbano Burki
Faiza Ghaffar Khan
Pessimistic Organisational Ethos

Persistent losses and declining status of public service have seriously impacted the
organisational morale and ethos of Railways. Years of poor governance have not helped.
The prestige of Pakistan Railways is at its lowest ebb. Like most other public sector
organizations perceptions of corruption and inefficiency abound.
Majority of railwaymen have little faith in any reform and there is resignation to the
status quo. Organisational turnaround in such a culture will remain elusive. Anyone
taking on the task of reformation will have to change this before embarking on a process
of reform.
The compensation structure of the Pakistan Railways also hinders performance and
negatively impacts morale. The organization has government sector pay scales, which are
neither sufficient nor motivating. These low levels of salary have, among other factors,
contributed to inefficiency and corruption. There are no performance related incentives.
Political Ethos
Most officials of Railways blame the historical failure on extraneous political factors.
While it may not exhaustively explain the causes for the current state of affairs, it remains
a very important reason for the organizational decline. nnecessary political interference in
Railways is a reality. Various governments have intervened whimsically for limited
political gains into recruitment, opening of uneconomic services for specific
constituencies and also into labour politics. In fact the last mentioned has been used by
many political parties. Allegations of supporting the more politically influential road
transport sector to the detriment of Railways continue to exist.

According to a recent World Bank study the Pakistan Railways’ “work is constrained by
bureaucratic procedures and by powerful political interests.” A number of other studies
and papers have also highlighted external interference in the day-to-day operations of the
Railways as a major constraint to its performance. Our research regarding the
organizational structures of Pakistan Railways, both past and present, has also revealed
that the Ministry often usurps the powers and authority, which should normally lie with
the management and executing sections of the organization
Reform of the Pakistan Rail Sector’, a presentation by the World Bank, Dec 2004
Roles, Responsibilities and Accountability
A number of previous studies undertaken for organisational restructuring of Pakistan
Railways have highlighted lack of clarity concerning the realm of the ‘Job’ and its
accompanying responsibilities for most of the positions in the apex organizational
structures. Unfortunately successive efforts at reorganisation have not been able to
address this issue and the situation has worsened overtime.
There exists, at present, both a lack of clarity and an overlap of roles and responsibilities.
This is a direct outcome of usurping of decision making powers by the government,
which ordinarily should be exercised by the Railway personnel mandated to run the
business. This situation has even led to non-exercising of authority by certain senior
officials, as enshrined in their job descriptions or charter of duties, so as to avoid undue
accountability for decisions compelled by external actors. Our discussions with personnel
of Pakistan Railways revealed that officers shy away from performing their duties
because of the centralization of authority.

Financial State of Pakistan Railways
According to Burki, 1997 report, the cumulative losses up to 1995-96 were Rs. 36.415
billion. A newspaper reported that the financial losses decreased to Rs. 5.2 billion from
Rs. 8.5 billion during the tenure of the previous government.
The table below gives data for the last five years.
The State Bank overdraft for the year 2007-08 stood at Rs. 25.347 billion.

In 1971-72, 70% of the budget was utilized for Operations and Maintenance, 20% on
Wages and 2% on pensions. By 1995-96 the position had changed drastically, where only
18% of the budget was spent on Operations and Maintenance, 45% on wages and 20% on
Pensions. There are also allegations and widespread perceptions of political interests
using Pakistan Railways as an employer of last resort, where the organisation has to
burden its compensation budget with increased employment without either a human
resource requirement or the capacity financially.
The financial position of Pakistan Railways has been weakened by low revenues, a high
wage and pension bill and an uneconomical fare structure. The problem has been
compounded by a lack of policy direction. The losses have meant an increasing State
Bank overdraft and low investments. Lack of proper financial management systems and
autonomy are major factors in the poor performance. The organisational structure and
processes, given the absence of a financial planning and management department and
system, do not provide for profit and loss analysis or orientation.
Railways personnel interviewed complained that the existing finance and accounts
system does not support the management and planning process of the organisation.
Instead, as a result of its reporting structure where it is answerable to the Ministry of
Finance, it operates as a regulatory body that disburses budgetary allocations and
oversees expenditures.

The finance and accounts department and the office of the GM Operations usually work
in isolation. The GM prepares draft budget in separation, which is forwarded to the
Ministry for approval. The budget allocations are done by the Ministry of Finance based
on their own analysis. The latter is unable to appreciate and support the budgetary
requirements of Pakistan Railways
Revenue targets are set arbitrarily with a discord between the Railways operational side
and the representatives of the Ministry of Finance. Lack of financial planning and
management support in the form of qualified finance experts has severely constrained
Pakistan Railways’ ability to formulate a comprehensive and realistic picture of its
capacity, financial health, budget requirements, budget prioritization, and future
projections.
Asset Depletion
Pakistan Railways have the responsibility of developing and maintaining their
infrastructure. The task becomes more difficult as Railways have to depend on
centralized structures for approval and funding. As mentioned earlier, this makes it less
competitive in response to road carriers who do not have to invest in basic infrastructure
like roads.
Following a shift in the priorities of the Government after seventies, when the emphasis
shifted to the road sector, investment fell sharply in the Railways sector resulting in

deterioration of infrastructure, and failure to expand or improve Pakistan Railways’
network. Pakistan Railways have to compete with road transport for business. While the
latter is charged a nominal amount by the Government for the cost of road maintenance,
the Railways have to bear the entire infrastructure maintenance cost with no Government
compensation or subsidy for running PSO business, greatly reducing their ability to
compete.
Inadequate funding for investment in Railways’ operating assets has led to depletion in
both the quantity and quality of rolling stock. The Table below illustrates the current
dismal condition of vital Railway assets.

Our interviews with Railway personnel have highlighted aging assets as one of the
critical factors causing poor performance of Pakistan Railways. Without addressing this
issue no future improvements will be possible.
Loss of Assets through Riots
Further, during our field visits to Head Office of the Karachi Division, it was alarming to
note that the centre of all operational activity, which is the Control Room, operates
without any technological support. There are no computers or even typewriters or fax
machines that could assist in the speedy and timely relay of information and
communication, among the Control Room and the divisional stations and other
departments essential for operational efficiency, In addition, essential investments in
infrastructure and rolling stock are required to introduce and improve the use of
technology and management information systems in Pakistan Railways to enhance its
performance.

Orientation (Public Service versus Commercial)
Pakistan Railways are “administered as a special department of the federal government
and enjoys partial autonomy in its day to day operations within the overall policy
framework and public service obligations imposed on it by the Government. It can
therefore be classified as a quasi-commercial organization being managed with social
considerations”. To date, Pakistan Railways have given priority, under successive
Government directives, to passenger movement over freight on government approved
rates. Pakistan Railways are the only ‘long route passenger carrier for 98%’ of the
population, and its pricing for this sector is ‘strongly influenced by social considerations’.
This orientation, both at the policy and executing level, has hampered the organization’s
ability to function as a commercially oriented and profit making entity. In most countries
passenger business is a non-profit making venture.
Majority of railways personnel interviewed feel that Pakistan Railways should be a
hybrid entity, which is simultaneously Public Service oriented and makes profit through a
commercial orientation. It is vital that ‘the setting of political objectives should be
separated from the management of railway enterprises’, so as to avoid confusion between
Railways responsibilities for commercial results.

DETERMINENTS OF SERVICES IN RAILWAYS
Following are the Services Determinants which shows the effectiveness of railway
services. We can say that these are the goals for Pakistan railway if these are achieved
Pakistan railway can never be in loss.
These are:
Reliability, Responsiveness, Assurance, Empathy and Tangibility.
RELIABILITY:
• The service management should be reliable in such a way that they must provide
services as promised. They should never deceive their customers. Like in Pakistan
railways there must be time mismanagement which is a major issue in Pakistan
Railway Department.
• If there are any new services to be offered in near future, the customers must be
provided with the information on the right time so that they can avail it easily.
• The railway service management must be able and skilled enough to solve
customers problems e.g. seat reservations, availability of seats in case of need,
luggage safety etc.

Responsiveness:
• The employees hired must be willing to help their customers al the time of need.
In Pakistan railways unfortunately it doesn’t happen. Passengers face a lot of
problems because they don’t find the willing and cooperative staff to help them
out.
• The employees in customer services canter at railways must also have enough
knowledge to help the customers in the right way. They must have knowledge to
give the customers regarding the train timings, the gap between arrival times,
departure times and weather conditions as well.
• The employees must be ready all the time to help and manage their customers in
terms of everything related to the customers and their journeys.
Empathy:
It means
• The service sector of railways must be so much managed that they can easily give
personal attention to all the passengers having any kind of problem in their
journeys.
• The services staff must show a caring and touchy fashion in their appearance to
the customers so that the customers feel free to consult them in case of any
timings problem, luggage issues, seat reservation issues etc.

Assurance:
• The management should hire those employees who carry the ability to instill and
can give a better impression to their customers by helping them correctly. Those
who can develop confidence in the customer’s mind that they really care for them.
Like helping them in the seat reservations, safe and sound journeys with their
families etc.
• They must give the customers feelings that their journey with our service staff
will always be safe and sound for them and their families so that they can always
come to them.
• The management must assure that their service staff is all courteous and
enthusiastic to perform their duties. In Pakistan railways it doesn’t seem that the
staff is really want to help the passengers because they don’t show seriousness to
their duties.
Tangibles:
It includes
• The railway stations and the equipment required must be of latest technology so
that every thing could be managed easily and with saving time of the department
as well as of the passengers. The ticketing system, luggage checking system,
reservation procedures, luggage safety, all should be handled with latest
equipment available in the market.

• The employees must have a neat and professional appearance which can attract
the customers to feel free to talk to them and explain their issues easily. The
dresses of the service attendants should be pressed and tidy which gives a
professional appearance.
• The employees should also have the habit of understanding the needs of their
customers. They have a sense of sympathy for their customers so that they can
perform their services in the best manner.
Conclusion:
According to my understanding a market manager must follow all these determinants
which are set on International standards. The Manager should prepare his followers to
achieve all these services for their value customers in order to maintain their services and
groom themselves more and more.

Organisational Turnaround: The Framework for
Recommendations
Organisational turnaround has two components: ‘stem the decline’ and improve
performance to make the organisation ‘industrially competitive’. Turnaround has also
been defined as ‘performance decline followed by performance improvement’ (Schendel
et al 1976; Robbins and Pearce 1992) Historically, literature on organisational turnaround
has existed for private sector entities but recently it has also been employed for public
sector organisations’ turnaround.
Strategies for Turnaround
Organisational turnaround can be divided into the following four stages:
Retrenchment
Retrenchment involves cost reduction strategies. There can be a long list of possible
options and each organisation can use what it deems most feasible. Some of the options
are moving out of non-profitable markets, relieving the organisations of non-profit
making businesses, outsourcing, sales of loss making assets and rightsizing or
downsizing. In the case of Pakistan Railways, this may among other things include
separation of core business and non-core activities as distinct entities. This is discussed
further in section 7 “Recommendations”.

Repositioning
Repositioning calls for improvement in revenues. It demands effective business
development strategies through market differentiation, improved marketing, locating new
markets and improving market shares. This list is neither exhaustive nor mandatory as
long as the basic objective is met.
Re-organisation
Re-organisation calls for changes within the organisation as part of processes to enable
success of ‘retrenchment’ and ‘repositioning’ strategies and not an end in itself. For
example the marketing or business development function may need to be enhanced or
created for increasing revenues or some functions may need to be hived off. It also
includes development of human resource and transforming organisational culture. Again
the list is neither exhaustive nor a strict prescriptive recipe.
Environmental Factors
Environmental factors exist outside the organisation. These include macro-economic
changes, legislative changes or any other extraneous factor that would impact the
performance of the organisation. For example in the case of Railways, practices or
malpractices of the competing land transport services can impact its revenues.

The Indian Experience of Turnaround
Indian Railways have appeared as the most recent success in public sector organisational
turnaround and is a unique example in view of its size. It reached an operating ratio of
78.7 for 2007 from 98.8 in 2001. It is still higher than the Canadian Pacific Railways at
74.5 and China Rail at 60.7 for 2006. This means that while the Indian turnaround is
remarkable it has some way to go. But it is still far ahead of Pakistan whose operating
ratio for 2007 was 105 and for the year before that it was 97.
Comparing Railways, like most entities, across international jurisdictions remains a tricky
exercise. In Pakistan, normally, India appears as the most relevant example because of
the shared history and common basis of the British public sector. This includes the
Railways. However, before the comparison can be made a few provisos to highlight the
essential differences will need to be mentioned.
Firstly the Indian Railways did not make a loss till 1998. Pakistan, with a much smaller
Railways, made its first loss in the mid seventies and has not recovered to date. In case
of India the loss resulted from an extraneous factor: the increase of public sector pays in
the Fifth Pay Commission. This resulted in an average increase of 29% of pay. In an
organisation with over 1.5 million employees this made a huge dent. In the case of
Pakistan the factors appear to be more endogenous and chronic.

Secondly the size of Indian Railways outmatches Pakistan Railways by more than 14
times in number of personnel. Thirdly India has seen aggressive economic growth and
activity in the last 15 years which has had positive impacts on all spheres. There has also
been a growth of other structures like the Container Corporation of India that have helped
streamline freight transportation in the country.
Yet, the turnaround of Indian Railways from a loss making organisation in 1998 to a
profit making one in less than ten years has invoked worldwide interest. The model does
provide some insight into public sector turnaround and management of Railways and
lessons can be inferred.


Recommendations
1. The Overarching Issue: A National Transport Policy
An overarching deficit in Railways planning in Pakistan has been the absence of a
‘National Transport Policy. Despite the fact that the Railways remain a highly capital
intensive business, government has never formulated a holistic policy that would analyze
the overall transportation issues and balance investment into road and rail, supported by
any research. Devising a National Transport Policy or even identifying its contours goes
beyond the scope of this report but it is strongly recommended that the issue be
considered by the Government.
Not only should railways policy be devised within the framework of an overall transport
policy, the implementation and impact should be reviewed within this framework. Ideally
the Ministry of Railways should be subsumed into a larger entity which should be the
Ministry of Transport and Communication. That Ministry should be responsible for the
formulation of the National Transport and Communication policy . Nevertheless, this can
be seen as a long-term government priority, and given existing political realities and
exigencies the Ministry of Railways can retain its status, however, with clearly
demarcated roles and responsibilities.

2. Eliminating Political Interference
Any process of reform that cannot be insulated from extraneous interference will fail. At
the political level there has to be recognition of the seriousness of the problem. Railways
have a very important role in the economic growth and development of Pakistan and
unnecessary political interference in decision making will impede the country’s progress.
India’s success in Railways’ turnaround owes a lot to marginalisation of interference.
3. Approaching Reform of Pakistan Railways
Pakistan Railways face chronic issues that have led to continued deficits over three
decades. Turnaround of the organisation will be a challenge. The deficit itself has caused
demoralisation and resignation to the state of affairs which in turn has ensured the
continuity of losses and depletion of assets.
The ‘turnaround’ will need to be undertaken in a number of phases. Each phase will need
to identify a separate objective. At this point the primary objectives will have to be
retrenchment and repositioning for elimination of the financial loss of Pakistan Railways.
This will have to be achieved without major re-organisation of the core business since
that might prove counter-productive as the organisation has neared a point of collapse
where it may not be able to bear the throes of major changes. It has to be a deliberate
incremental approach.
In the immediate phase corporatisation or privatisation cannot be pursued. These will
remain counter-productive as without transforming the organisational ethos, and with
continued political intervention, changes in organisational structures do not change the
end results. There are many examples in the country where corporatisation has not
insulated organisations from political interference, corruption and inefficiency.

Secondly, most functions in Railways’ operations are specialised and dependence on the
current human resource remains inevitable and so does the ownership of the reform
process by the current set of employees. In our interviews we found that the word
corporatisation (which is sometimes confused by employees as privatisation) invokes
serious reservations even from senior officers of the regular Railways cadres.
Faith will have to be placed in the current set of officers and staff to begin the process of
the turnaround. This will be possible only if the organisational ethos gets transformed
from low morale and indifference to ownership of the process of saving Pakistan
Railways. This will require leadership and political commitment from the Government.
Important factors to consider, in addition to involvement in the reform policy
development, will be training to improve management orientation, improved career
structures, incentives and accountability.
4. Finding a Direction
Railways under the British developed as an important infrastructure for imperialism.
Whether it developed routes for export of raw material out of India or strengthening
defense related lines it had clear directions. After independence the direction, apparently,
did not get revisited and, as already stated, in the bulk of interviews conducted there was
ambiguity among the officials of Pakistan Railways about any vision for Pakistan
Railways.

Having a clear direction becomes an imperative for initiation of the reform process. The
team that eventually embarks on the task will have to pronounce one clearly. It is not
appropriate or possible to suggest one here but some of the issues that would concern the
development of the Railways are:
1. Role of Pakistan Railways in the economy of Pakistan and (within the economy) in
the transport sector.
2. Role in the development process.
3. Role as a commercial enterprise.
Direction of reform and of Pakistan Railways’ future will depend on responses to these
and other similar questions. The answers will determine the process of change that is
adapted for the short, medium and long terms. Senior management of Pakistan Railways
should, under the leadership of the Minister, develop this in consultation with the
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Chartered
Institute of Logistics and Transport Pakistan (CILT), Pakistan International Freight
Forwarders Association (PIFA), employees of Pakistan Railways and other stakeholders.
It is recommended that the Ministry of Railways embarks on a strategic planning exercise
with the key personnel and stakeholders of Pakistan Railways. Such an exercise would
not just help in the formulation of a Vision and Mission for Pakistan Railways, but would
also communicate and foster the need for required structural and cultural change as
recommended by this study.

5. Improved Ownership at the Political Level
In the Status Paper 2002 of Indian Railways the then Indian Minister for Railways Mr.
Nitish Kumar used the phrase ‘we the railway men’ in the introduction. The phrase
revealed a strong ownership of the political bosses and hence the process initiated by Mr.
Kumar succeeded in transforming the organization.
As reform of railways gets underway, politically unpalatable decisions will need to be
made and also the fight for resources and priority will have to undertaken. Only a strong
political will and ownership from the Minister for Railways and the Prime Minister will
enable a change.
6. Implementation Framework
An autonomous Board entrusted with the task of organizational turnaround of Pakistan
Railways will need more information than contained in this report. A more detailed
analysis will be required. A comprehensive diagnosis of the problems faced by Railways
and potential remedies will appear if the process collects feedback from the users of
Pakistan Railways and also competitors in addition to its own officials and the unions.
Ownership of the present set of employees, who will be the initiators of change, is
essential. Reform process and objective will need to be shared and commonly understood
across the organization. It is imperative that the officials are not given terms of service
that are perceived to be less favorable than the present state.

Training of officers in management and also reform processes will need to be focused.
It has to be comprehended that turnaround of the Railways will take a 3-5 years period.
Further reform can only be undertaken beyond this point and will depend on the then
state of affairs.
7. Suggested Steps
If the above recommendations are approved the implementing body will need to initiate
the following steps:
1. Series of workshops and meetings to disseminate the findings of the study and initiate
the process of reform.
2. Initiation of a Strategic Planning exercise
3. Repeal the 2002 Ordinance and introduce a new law to formulate the new Board in line
with the above recommendations and clearly demarcated roles and responsibilities and
accountability.
4. Initiate a more detailed analysis to prepare strategies for reform. The analysis must
include feedback from a larger set of stakeholders than this report. The stakeholders must
include all relevant employees of Pakistan Railways and customers.
8. Funding
In order to bring sustainability and long term viability of the proposed changes it is
imperative that sufficient financial commitment is made to the process. Given the paucity
of funds available with the government, options with development partners may be
explored.

References:
1. Daily Times website, Tuesday September 16, 2008
2. ‘National Transport Policy’, The Chartered Institute of Logistics and Transport
Pakistan (CILT), October 2008
3. Pakistan Railways Annual Book 2008
4. ‘Central Superior Services Pakistan’ , Blog by Dr. Farrukh Malik
5. ‘Lending for Railways; Pakistan’, The World Bank website, 2001
6. ‘Year Book 2006-2007’, Ministry of Railways- Government of Pakistan
7. Encyclopedia II – Indian Railways History, see:
http://www.experiencefestival.com/a/Indian_Railways_-_History/id/1501487
8. “Towards an Organizational Turnaround Structural Analysis of Pakistan
Railways”
Study conducted for Pakistan Railways Advisory and Consultancy Services
(PRACS)
Prepared by
Javed Hasan Aly
Abdus Sami Khan
Sheherbano Burki
Faiza Ghaffar Khan
9. Views from the general public
10. Economic survey of Pakistan 2008-09

11. The Chronology of Pakistan Railways
By Owais Mughal
owaism1971@yahoo.com
(Last Updated: March 03, 2007)
12. Pictures' page at PRACS web site:
http://www.pracsltd.com.pk
13. 'History' page Pakistan Railway web site:
http://www/pakrail.com
14. A research project in response to the given subject
“overview and analysis of transport sector in Pakistan”
By Dr. M. Awais
15. Massive but targeted reforms are required to lift up the level of performance,
credibility and image of the railways
By Dr Noman Ahmed
16. Swot Analysis and Pest Analysis of Pakistan Railway
http://allnotes.informe.com/forum/management-notes-f5/swot-analysis-and-pest-
analysis-of-pakistan-railway-t7.html#p16
17. Pakistan railway form wikipedia
http://en.wikipedia.org/wiki/PakistanRailway
18. "Mismanagement grips Pakistan Railways". Economic Review.
FindArticles.com. 21 Dec, 2009.
http://findarticles.com/p/articles/mi_hb092/is_n5_v24/ai_n28626234/
19. Hundred Years of Pakistan Railway by M.B.K. Malik

Research Report On Pakistan Railway

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HOW TO INCREASE THE EFFICENCY OF PAKISTAN RAILWAY 1

Mr. Farrukh Naveed

Subject: RESEARCH REPORT ON “HOW TO INCREASE THE

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Pakistan Railways and there solutions not at the organization as a whole. To

Railways, reviewed the current state of affairs through available data

failure owes to absence of a clear direction for the organization, a pessimistic

organizational ethos resulting from years of decline and political interference in

decision making to the detriment of commercial feasibility.

accountability. A number of decisions have been centralized in the Board or the

of any accountability. Financially, Pakistan Railways have alarming figures and

constricted; declining from 70% in 1971-72 to only 18% by 1995-96.

suggestions will be very helpful in improving the efficiency of Pakistan railway.

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The study is part of a larger consultancy being undertaken in conjunction with a

 Which factors are responsible for these inefficiencies?

 How to overcome these inefficiencies?

The Research will be completed in one month starting from starting

from 22-12-2009 to 29-01-2010..

 Preparation of research proposal 7 days

 Data collection 7 days

 Data analysis 5 days

 Final report composing 8 days

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morale. A vicious cycle has resulted wherein organizational problems, including

and deterioration constitute an immutable reality. Faith in change and improvement

reversal has to be pursued. There has to be ‘organizational turnaround’.

details of the entire organizational structure in its recommendations. However, it focuses

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approaches. Even for this strong leadership will be required.

intermediate strategies. The most immediate will have to be an autonomous structure at

changes within these bounds will be needed.

reform and the then prevalent environment.

the current, politically imposed processes, to managerial processes that have

from whimsical extra-institutional intervention.

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Extent of the Railway network in 1909

Lahore and beyond.

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Railway (NWR). This would eventually become Pakistan Railways in 1947.

1897, the line from Keamari to Kotri was doubled.

North Western Railways were transferred to Pakistan from British India.

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alternative route from Karachi to northern Pakistan.

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trains from Lahore to Amritsar, India.

Afghanistan - Currently there is no rail link to Afghanistan since no railway

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Taftan, thus connecting the port town to Central Asia.

Turkey - An Istanbul-Tehran-Islamabad passenger rail service was proposed

Turkmenistan - via Afghanistan

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Eid ul Fitr, Eid ul Azha and Independence Day.

phosphate. The remaining 42% is earned from domestic traffic.

headed by an additional General Manager.

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depending on the lead, peak-off peak season, and quantum offered.

Central Asia, and carry passengers.