LAHORE:
Pakistan Railways announced on Monday that it had decided to increase freight rates by 3% across the board, which would be levied on all goods traffic from July 3, 2024 onwards.
However, it clarified that the 3% hike in freight rates would not be applicable to steel coils, petroleum products, line haul cost, line management cost, shunting charges, demurrage and destination charges.
The announcement of increase in freight charges came just a day after the management released the revenue figures for financial year 2023-24. The railways got Rs88 billion in revenue in the just-ended fiscal year, reflecting almost 40% growth over revenue of Rs63 billion in FY23.
The management recalled that at the start of FY24, the government of Pakistan had given railways the annual revenue target of Rs73 billion, but the entity managed to earn Rs15 billion more than the original target.
“This is the record revenue generation by the railways in its history,” said a spokesperson for the Pakistan Railways.
From the passenger segment, it earned Rs47 billion whereas the freight segment got revenue of Rs28 billion. The railways also earned Rs13 billion from the commercialisation of its properties and other resources.
However, the Pakistan Railways has little room to spend its own revenue on the betterment of its dilapidated infrastructure and rolling stock, as almost 67% of earnings are spent on salaries and pensions. It is anticipated that the corporation will need the government’s help to meet expenses, though the amount will be much lower this time around.
For the new fiscal year, the railways management is targeting revenue of Rs100 billion, a figure which the organisation will likely achieve or even surpass, considering the growth in its revenue in recent years.
This may be a reason behind the increase in freight rates, which are still very low when compared with the rates of goods transportation via road.
The railways has made strenuous efforts to put the sick entity back on track, especially after 2013, when only a few locomotives were left for passenger and freight services. The freight sector remained virtually at a halt for some time as the then management tried hard to streamline passenger train operations.
The management is also striving to reclaim the lost land grabbed by the influential people.