Pakistan Railways (PR) is looking to outsource the commercial operations of 22 additional trains. However, previous experiences have raised concerns about the success of this plan.
For instance, a leading firm failed to run Business Express successfully due to financial constraints. Additionally, another firm stopped operating the Bahauddin Zakaria Express for administrative, financial, and technical reasons.
In the latest development, PR has decided to readvertise the tenders to outsource trains. This decision was made because only three companies participated and showed interest, but their offers were less than the benchmark amount. PR found it impossible to proceed with these three firms under the Public Procurement Regulatory Authority (PPRA) rules and regulations, so 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,” a senior official of a private firm presently running a train in Punjab said.
“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 stated.
Under Pakistan Railways’ (PR) plan to outsource the commercial operations of 22 more trains, the benchmark earnings for these trains have been calculated based on the three-year average of the highest ticket sales. This means that if the total earnings of a train were Rs2 billion over three years, the benchmark would be considerably higher. Additionally, the benchmark includes a 10% potential increase in train fares, contingent on the provision of additional facilities such as Wi-Fi, improved complaint resolution, and enhanced quality.
Bidders who offer more than the benchmark price will be awarded the right to commercially operate the trains. The selected contractor will be responsible for selling tickets through PR’s official Rabta application, which is available at 86 locations, including several stations. Furthermore, the contractor must submit its tax returns, financial statements, and other documents to PR, which will then be shared with the Federal Board of Revenue (FBR).
The contractor is also required to provide high-quality catering services, including hygienic food, fully trained staff, branded food items, improved dining car facilities, raw materials, water dispensers, and bedding. Additionally, the contractor must ensure quality janitorial services, such as a clean and hygienic environment, uniformed janitorial staff, cleanliness, soap dispensers, tissue papers, hand dryers, and aesthetically pleasing train interiors.
Moreover, the contractor will be responsible for providing state-of-the-art infotainment features, such as LCD screens in AC compartments, as well as security-related services during the journey.
In return, PR will be liable for providing well-maintained passenger coaches, locomotives, experienced drivers and assistant drivers, and other technical staff required for the smooth operation of the trains during the journey and at railway stations. PR will also allow the contractors to adjust the departure and arrival timings of the trains by up to a couple of hours.
“Three firms, which have reportedly submitted their technical and financial proposals to the PR, have offered less than the benchmark. On this, PR has decided to readvertise the trains,” another PR contractor said.
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