LAHORE: Pakistan Railways (PR), which faced significant financial setbacks in the last fiscal year (FY23) amounting to over Rs55 billion, has requested an operating budget surpassing Rs1.10 trillion from the federal government for the upcoming financial year 2024–25.
There is a stunning discrepancy of Rs36.98 billion between the approved budget for the current financial year 2023-24 and the budgetary request.
The Ministry of Railways has received detailed budget suggestions from PR management, which include funding for a range of expenses essential to the smooth operation of the railway system.
The projected budget includes Rs11.67 billion for rolling stock maintenance, Rs10.85 billion for infrastructure development, and Rs45.19 billion for staff wages and benefits.
In addition, a request for an allocation of Rs42.88 billion has been made for operating costs that are essential to the continuation of railway operations.
It is important to remember that the Auditor General of Pakistan (AGP) last year completed an audit that determined that PR’s financial problems were mostly caused by problems with financial mismanagement, governance, and transparency.
The audit revealed more governance shortcomings than concerns about risk management and controls, namely in the management and administration of Public Sector Development Programme (PSDP) projects.
The audit uncovered a flagrant omission: the non-recording of the Rs29.35 billion accumulated liability for interest and exchange risk premium on foreign loans.
The financial strain was further worsened by the possibility of a revenue loss of Rs19.80 billion as a result of project delays and the failure to correct suspense accounts totaling Rs12.64 billion.
Financial difficulties were made worse by the audit report, which also revealed an overspending of Rs11.75 billion beyond the budgeted amount.
Additionally, PR lost an extra Rs8.25 billion as a result of the financial statements’ failure to account for accruing pension liabilities.
Rs6.96 billion was lost as a consequence of contract awards at inflated rates, while Rs7.92 billion was lost as a result of Pakistan Railways Freight Transportation Company (PRFTC) not registering with the Punjab Revenue Authority.
An annual loss of Rs6.10 billion resulted from non-operating track access agreements, and the department lost Rs5.09 billion due to unfair competition and opaque procurement.
Pakistan Railways’ income objective for the current fiscal year, 2023–24, is Rs80 billion, which is Rs10 billion more than the target for the previous fiscal year, Rs70 billion.
It made Rs62.5 billion in FY23, Rs7.5 billion less than the target. This year, however, the management emphasized that they planned to reach the Rs80 billion target at least one month ahead of the fiscal year’s end in June 2024, given the rate at which revenue was being generated.
