The privatization of Pakistan Railways emerges as the next crucial step following the recent proposal to privatize Pakistan International Airlines (PIA). This move has garnered significant interest, particularly from countries renowned for their robust railway infrastructure. Despite perceptions that the railway business might be simpler than aviation, it presents a myriad of complexities.
Advocates for privatization, including former members of the Islamabad Chamber of Commerce and Industry, argue that divesting Pakistan Railways could be a transformative measure. The current state of the railways, with trucks increasingly dominating over trains, underscores the urgency for reform. In recent years, Pakistan Railways has carried less than 5 percent of national traffic, despite theoretically being a cheaper mode of transport compared to roads.
Comparisons with India’s successful railway network highlight Pakistan’s underutilization and mismanagement. In fiscal year 2022-23 alone, Pakistan Railways incurred significant losses amounting to Rs. 55 billion. This decline is attributed to vested interests, bureaucratic ineptitude, encroachment, and sabotage, posing formidable challenges to the sector.
Efforts to revitalize Pakistan Railways include Prime Minister Shehbaz Sharif’s proposal for a rail link between Reko Diq and Gwadar port, seen as a potential lifeline for the network. As discussions on privatization gain momentum, calls for divesting other state-owned entities such as PEMRA and Pakistan Steel Mills also grow louder.
While there is opposition to railway privatization, particularly from politicians, many recognize its critical role in commerce. The Finance Division is urged to seriously consider the sale or privatization of Pakistan Railways in the wake of PIA’s proposed privatization. The debate on this issue needs to be reignited and expanded to address the pressing need for reform in Pakistan’s railway sector.
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