On the wrong track

The solution does not lie in transferring Pakistan Railways into private hands but in a greater involvement of workers in the management

By Abdul Manan

As privatisation of Pakistan Railways (PR) is on the cards thousands of labourers employed by it fear they will lose their jobs if PR is privatised. Labour unions have vowed that they will put up resistance against the proposed privatisation as they have not been taken on board in this regard. Officials of the PR believe that no proper yardstick is available to enlist and assess the assets of railway appropriately. The labour unions which are protesting against the proposed privatisation for two months blame it on corruption in the bureaucracy which, they say, have cost the PR billions of rupees. On the other hand, PR's high officials favour the privatisation process.

According to government officials, PR has been running in losses for decades. Last month, Federal Minister for PR Ghulam Ahmad Bilour stated that PR was incurring losses of Rs 16 billion. According to government statistics, various governments have made a number of attempts to cut losses but failed. In 1997 the Council of Common Interest (CCI) approved the privatisation of PR to put it on the right track but the decision did not materialise. PR has been divided into three business units: passenger, freight, and infrastructure but, according to PR's officials, this composition badly flopped in 1999.

Other actions taken in 1997 by CCI were that all the surplus assets and non-core assets were to be transferred to Railway Resettlement Authority (RRA). The RRA will be a statutory body. The mission of the RRA is to dispose of all the surplus assets and liquidate long-term liabilities. It was also decided that Railway Policy and Regulatory Framework document would be formulated. Discussions were held by PC with the ministry of railways to discuss future modalities.

PR General Manager Saeed Akhter tells The News on Sunday (TNS) that no actions mentioned above have been implemented. Talking about the current development of PR's privatisation he says that recently Cabinet Committee on Privatisation (CCOP) has discussed the proposed "Pakistan Railway Corporation Act (PRCA)" and referred it to the Council of Common Interest (CCI) for approval. He says that PRCA after getting the approval from CCI will soon be implemented.

According to government statistics CCOP is the macro-level decision-making body for approving, modifying, and implementing the privatisation policy of the government. It was established simultaneously with the establishment of PC 1991. Article 153 of the Constitution provides for a CCI comprising the chief ministers of the provinces and an equal number of members from the federal government. The public entities, interests etc, contemplated to be privatised are brought before the CCI if it is so required.

Saeed Akhter maintains that if people define privatisation as mere transfer of ownership then he would disagree to it. He denies that there are plans to privatise PR, saying the government of Pakistan has reviewed the existing privatisation policy in order to model it on the concept of Public Private Partnership (PPP) wherein the management may be transferred to investors while ensuring transparency. He said that the main objective of privatisation policy through PPP model is to put national resources and assets to optimal use, adding that the PR has recently exercised this by planning a project with two Karachi-based private companies to establish Praim Nagar Dry Port in Lahore.

According to statistics give by some government officials who do not want to be named, PR is giving services to around 40 million people across the country and around half a million people of the city are associated with the PR as employees. They claim that the private sector will not run their trains on low profitable branch lines and question job security of the employees. They also say that since PR has great strategic importance, especially during wartime, private sector might create problems for movement of trains carrying equipment for the army.

Representatives of labour unions have expressed their views against the privatisation. Chairman Railway Mehnatkash Union, Khadim Hussain, says that PR is a national institution and it should not be privatized as it employees about 80,000 employees, including some 65, 000 workers between the basic pay scale of 1 to 12. He fears that if PR is privatised the fate of workers will hang in balance.

Hussain complains that PR has not taken them on board, as they are major stakeholders of the privatisation process, adding that privatisation of government institutions have failed in the country in the past. By the same token, he believes, the privatisation of PR will also fail. He cites Federal Minister Bashir Ahmed Bilour who had stated in the Standing Committee of Senate a few weeks ago that PR's officials had committed corruption of around 14 billion rupees. He believes that if administrative flaws are removed from the PR then it can be turned into a profitable institution.

General Secretary Pakistan Railways Traffic Yard Staff Association, Syed Shujat Hussain, alleges that transporters are major players in PR's privatisation process in order to make their transportation business more profitable. "Transporters have political influence. They want to run their buses on the routes used by trains."

Chairman Praim Labour Union (CBA) Sheikh Anwar maintains that since PR is a commercial and strategic institution its privatisation will be taken as an act of high treason. He suggests that PR should adopt Open Access Policy (OAP) instead of its corporation or privatisation, adding that through OAP, PR should invite foreigners and rent out railway tracks to run their own trains. He believes OAP can solve PR's problems. Anwar tells TNS that some sections of PR were privatised in the past but it proved to be a bad experience. He cites an example where a train bound from Faisalabad to Lahore was privatised in 1996 at the cost of Rs 20 million per annum but it ran into losses of about Rs 30m per annum. He says that PR's privatisation will leave workers insecure.

Anwar believes that it is the PR's administration at the top level that should be downsized instead of the lower staff. "India runs 14000 trains per day while Pakistan runs 293 trains per day. India has only one slot of General Manager while Pakistan has three GMs, three additional GMs, eight divisional superintendents and 16 deputy divisional superintendents."

Central General Secretary of Railway Mehnatkash Union Muhammad Iqbal Shad tells TNS that PR's privatisation will deprive workers from their basic human rights as private sector will deprive them of basic facilities such as residences, free healthcare, and education. Shad says PR's privatisation will also withdraw the 20 percent job quota of PR's employees, adding that PR's administration has not signed any contract with any labour union for the last 30 years.

Representatives of various labour unions, such as, Praim union (CBA), Railways Mazdoor Union, Railways Labour Union, and Railways MehnatKash Union tell TNS that all the labour unions will stage a protest against PR's privatisation if it takes place and can even go to the extent of blocking the railways system across the country.

Aasim Sajjad Akhtar, a human rights activist, expresses his views on PR's privatisation. "We are against the process of corporatisation leading to privatisation. This is because commanding heights of the economy, such as telecommunications, railways and oil and gas should be public monopolies that guarantee employment and service delivery. Besides, these organisations can earn money for the public exchequer. The performance of PIA and PTCL has, in fact, gotten worse after corporatisation/privatisation."

Aasim believes labourer's apprehensions about their job security are well-founded. "This is a fairly accurate threat perception. The example of PTCL after privatisation proves that worker retrenchment is one of the primary actions taken by private management".

On the bureaucracy concerns regarding PR's privatisation Aasim says, "Bureaucracy is of course motivated by its own narrow interests. I believe that the bureaucracy is part of the problem but the solution is not to transfer public enterprises like PR into private hands, instead, the solution is to take concrete steps towards greater involvement of workers in management. Aasim maintains that public private partnership is just a fancy way of doing corporatisation leading to privatisation.