ISLAMABAD: Pakistan Railways has decided to re-float tenders for the outsourcing of 22 more trains, following a poor response from private companies. The previous experience of outsourcing trains has been marked by failures, with one leading firm unable to operate the Business Express due to financial constraints and another stopping the Bahauddin Zakaria Express for administrative, financial, and technical reasons.
The latest development has raised concerns about the success of the plan, with only three companies participating in the initial bidding process and offering less than the benchmarked amount. According to sources, the high benchmark and the requirement to sell tickets through Pakistan Railways’ official Rabta application have been major deterrents for private companies.
The benchmark is based on a three-year average ticket sales, considering the year witnessing the highest sales, and includes a 10% possible increase in train fare subject to providing more facilities such as Wi-Fi, complaint resolution management, and quality services. Contractors who offer more than the benchmark price can take and run the trains commercially.
However, Pakistan Railways’ CEO Amir Ali Baloch remains optimistic about implementing the plan, stating that the committee has observed that firms participating in the bidding submitted very low technical and financial proposals. He believes that readvertising the tenders will attract more and more firms.
Private companies operating trains under the Public-Private Partnership (PPP) mode have expressed concerns about the tough conditions and high costs involved in running trains. They argue that the profit margin is squeezing due to increasing costs, making it difficult to participate in the bidding process.
With Pakistan Railways operating 49 passenger trains, including 12 already being operated by private parties under the PPP mode, the success of this plan will be crucial in improving its operations and services.
