ISLAMABAD: Pakistan Railways has decided to outsource the running of passenger trains through an open auction to cut losses and modernize services, state media reported on Friday.
The rail network has long been running at a loss, with passenger fares and freight tariffs often failing to cover operating costs. Pakistan is already striving to privatize loss-making state-owned enterprises (SOEs), including the national air carrier, as part of its understanding with the International Monetary Fund under a $7 billion loan program secured last year.
The railways, with its old tracks and bridges, has not tried to fully privatize but has outsourced parts of its operations.
“A meeting presided over by Railways Minister Hanif Abbasi in Lahore has decided to outsource passenger trains through open auction,” Radio Pakistan said, adding that the meeting also agreed to revise the annual revenue benchmark of trains.
The railways will also induct 295 high-capacity freight wagons into the system by March next year.
The meeting “was also informed that freight booking will be shifted entirely to an online system from next week,” the report added.
Pakistan Railways has sought Chinese assistance under the multibillion-dollar China-Pakistan Economic Corridor (CPEC) framework for major infrastructure upgrades, including the $7 billion Main Line-1 project, new rolling stock and dualization of tracks.
Additionally, railway officials have been considering Asian Development Bank financing for the Karachi-Rohri upgrade.