Aug 7: Pakistan Railways (PR) is looking to outsource the commercial operation of 22 more trains. However, previous experiences, such as a leading firm's failure to run the Business Express due to financial constraints, raise concerns about the possibility of the plan's success.
Additionally, another firm stopped operating the Bahauddin Zakaria Express (Multan-Karachi-Multan) for administrative, financial and technical reasons.
In the latest development, PR has decided to readvertise tenders to outsource trains. This decision was made as only three companies participated and showed interest, offering less than the benchmarked amount.
The department found it impossible to proceed with these three firms under the Public Procurement Regulatory Authority (PPRA) rules and regulations. As a result, the tenders will be floated again soon.
Currently, PR is operating 49 passenger trains, with 12 of them already being operated by private parties under the Public-Private Partnership (PPP) mode. These include the Sir Syed Express, Karakoram Express, Karachi Express, Awam Express, Green Line, and Pak Business Express.
"The conditions are very tough. And in such circumstances, running a train has become an uphill and thankless job. On the other hand, the profit/margin is squeezing due to increasing cost incurring on facilities," says a senior official of a private firm presently running a train in Punjab.
"This is why we have not participated in the ongoing bidding since the benchmark is very high, and we are not in a position to participate," he adds.
Under the plan, the trains' total earning benchmark has been calculated based on three-year average ticket sales, considering the year witnessing the highest sales. This means that if the total earnings of a train is Rs2 billion in three years, the benchmark is considerably higher than this. The benchmark also includes a 10 per cent possible increase in train fare subject to providing more facilities such as Wi-Fi, complaint resolution management, quality and others.
Those offering more than the benchmark price can take and run the trains commercially. Besides this, the contractor is liable to sell tickets through PR's official Rabta application available at 86 locations, including several stations. Moreover, the contractor must also submit its tax returns, financial statements, and other documents to PR for onward sharing with the Federal Board of Revenue (FBR).
The contractor must also provide high-quality catering services, including hygienic food, fully trained staff, branded foodstuff, improved dining car facilities, raw materials, water dispensers, bedding, etc.
Similarly, they will also be liable to provide quality janitorial services such as a clean & hygienic environment, uniformed janitorial staff, cleanliness, soap dispensers, tissue papers, hand dryers, and aesthetics of the trains' interior.
Moreover, they will also provide state-of-the-art infotainment (LCD screens in AC compartments) and security-related services during the journey.
On the other hand, PR would be liable to provide good-condition passenger coaches, locomotives, experienced drivers and assistant drivers and other technical staff required for the smooth operation of the train during the journey and at railway stations. PR is also required to allow contractors to adjust the departure/arrival timing of the train (up to a couple of hours only). —Dawn
