The federal government has declined a proposal to approve a Rs25 billion grant for Pakistan Railways to clear pending liabilities, approving only Rs2 billion instead.Â
As per a news report, the Economic Coordination Committee (ECC) of the cabinet was requested to approve a Rs25 billion grant-in-aid to clear pending liabilities, comply with court orders, and ensure smooth operations. The Railways Division highlighted that Pakistan Railways is the sole operator providing passenger and freight services across the country and plays a crucial role in national economic and social development, as well as in national defence planning.
Despite being a federal government department, Pakistan Railways maintains pensions on its books, unlike other federal bodies whose pensions are managed by the Finance Division. In the financial year 2023-24, Pakistan Railways was allocated a Rs55 billion grant, primarily for pension payments. However, its liabilities related to employee expenses have been accumulating, now amounting to Rs25 billion.
Retired employees and widows of deceased employees have filed court petitions for the release of pension and PM package dues. The Attorney General of Pakistan requested compliance with a Sindh High Court order for early pension payments.
Pakistan Railways’ financial situation worsened due to pay scale revisions, allowances, pension increases, and rising fuel and electricity costs. Despite a 250% revenue increase over the last decade through reforms and improved management, the organization struggles with obsolete infrastructure and rising employee-related liabilities.
The Railways Division also faced challenges from the 2022 floods, which caused significant damage to railway tracks in Sindh and Balochistan, resulting in a revenue loss of over Rs7 billion. The Finance Division’s observations on the Ministry of Railways’ summary emphasized leveraging assets and establishing a pension fund, noting Pakistan Railways’ non-autonomous status.
The ECC, after considering the summary submitted by the Ministry of Railways, approved a Rs2 billion grant for Pakistan Railways and requested the submission of an overall business plan as directed by the Cabinet Committee on State-Owned Enterprises (CCOSOEs).
