DAMMAM: Dying national institutions due to the corruption by the PPP-led government corruption have become an absolute mantra these days. Let’s recap by narrowing the lens on the Pakistan Railways and corruption therein.
Early 1980’s, “half of Railways Fleet of 490 Locos is sick” reported Japanese Donors, JICA. Ziaul Haq obliges and places orders for 150 Locos to Japanese/American combine for half a billion dollars in 1982.
Earlier to that, Gen Ayub Khan replaced Pakistani fleet of 751 steam engines with 100% American Made Diesel Locos … 37 engines in 1947 grew to 333 engines by 1970. The cost to the national exchequer was about 750 million dollars. Diesel imports for these engines kept recurring till the government ran out of money to buy fuel. The same story was repeated around 2001 when Gen Musharraf placed orders for 69 Locos and bogies to rising neighbour China, while overhauling 96 American Locos. This cost the national exchequer another $350 million. The purchase was the sickest in railways’ history simply because the Pakistan Railways gave the first largest export order to Chinese Dong Fong Electrical back then for largely untested machines.
Besides, the general spent another $1.5 billion to the Americans in the shape of Boeing 777 orders as a political bribe. Three generals doled out $3 billion in new purchases, 80 percent of this going to American firms from 1950-2002. The timing of all three major Loco purchases was immaculate. Ayub Khan around 1960, Zia-ul-Haq around 1980 and Musharaf in 2001. All within first two years of their decade long rules. The buying trends suggest that all usurping generals made the decisions to help legitimise their rules by conceding significant business to Americans and belatedly to Chinese. The pattern was consistent and well thought out. They bought, flashed and left while the Pakistan Railways kept paying over 25% of their yearly revenue to service those debts, which those generals stroked in its balance sheet. Obviously, the railways could never balance its books and ended up with an overdraft of Rs 40 billion even today.ssssssssssssssssssss
Even more interesting is the fact that civilian rulers, never bought significant number of locos during the 30 years of their intermittent rules. All of these facts are publicly available for anyone to see in Pakistan Railways’ Year Books and published industry reports. President Asif Ali Zardari’s government placed orders for 75 locos to China in 2008 but the matter is hazy due to railways extremely bad experience and reluctance with Chinese locos. This apparently was also a political decision more than anything else but coming a decade after Musharaf’s might turn out to be relatively better because all original design faults are now exposed to the Chinese.
Besides, former prime minister Benazir Bhutto placed an order for only 30 engines to the Europeans in 1996. Interestingly, these AGE-30 locos bought from ADTranz (European ABB & Daimler combine) turned out to be the most efficient and useful purchase for the Pakistan Railways, as certified by senior rail officials. The simple fact that these engines were specially designed with lesser axle loads worked well on obsolete tracks and actually did three times more mileage per day (763 kms/day) compared to railways’ fleet average of around 263 kms/day in 2007, reported the Japanese who are engaged with the Pakistan Railways since 1980. Former prime minister Nawaz Sharif did not make any significant purchase for railways, and in fact he prepared it for privatisation in 1998-99. That’s how the grand decisions were made in retrospect.
Whatever the motives of the generals, lets analyse how these decisions fared for Pakistan.
The Japanese loan, which General Zia secured 30 years ago is still being paid back by the Pakistan Railways. And the ones taken by Musharraf will also be paid back over the next two decades. The country has already paid for all the vision of General Ayub because normally these soft loans are normally paid in 40 years. On average, the railways paid back around $5 billion rupees per annum during the last 10 years. That incidentally was over 25 percent of its income. Is it sustainable anymore?
What made the situation worse was Islamabad’s persistent approach of buying even the major spares of these locos through overseas assistance during the last 50 years. More loans for repairs were significantly delayed as well. One case in point is that of Risalpur Loco Factory, which was built in 11 years instead of the planned four years due to lack of matching budgets from Islamabad.
This project of national importance never performed beyond a quarter of its designed capacity since its inception in 1995, primarily due to lack of will and budgets.
Then there is the load of 90,000 strong workforce in Pakistan Railways, which needs to be paid Rs 2 billion per annum besides Rs 3 billion in pensions every year.