Director Special Operations NAB Zahir Khan revealed that there were two options before NAB either to cancel the agreement or alter it in accordance with provisions contained in the contract signed between the company and Pakistan Railways. In order to avoid long litigation, it has been agreed with the company concerned that it would revise the annual payments upwards to Pakistan Railways with Rs 16 billion additional payment in next 38 years.
However, Chairman Railways Arif Hussain rejected the Rs 16 billion addition to be earned through revision in land lease contract, adding that the exercise would only fetch Rs 2 to Rs 3 billion. He urged the Committee to close the case, as it is not only hurting foreign direct investment in Pakistan, but also adversely affecting many Public Private Partnership agreements.
NAB officials further said that PR has again decided to procure 75 locomotives from the same Chinese company whose 69 locomotives became unfit for Pakistani tracks. NAB has already arrested consultant of the Chinese company and the matter is being taken up with the China through mutual legal assistance. It was also revealed that due to the delay in procurement of 75 locomotives from China, government was paying about Rs 1, 64000 per day as commitment charges to Chinese company as the loan for this procurement is still effective.
The chairman of the committee observed that there were two mafias operating in Railways procurement, "one is China Mafia and second is America Mafia." He also said that the committee intended to help PR to become profitable as this was the most suitable and cost-effective means of transport for goods and passengers.
NAB officials said that PR procured spare-parts for 69 locomotives on five time high price and these were procured at the time when there was no need for such procurement. It was also revealed that out of the total 69 locomotives only 17 locomotives were operational at present, which were imported from China. The committee was of the view that procurement of these locomotives was the main contributor to the prevailing financial crisis being faced by the PR.
It was also revealed that total revenue of PR has dropped from 23 billion in 2008 to Rs 15 billion in 2012, due to which it's loss surged to Rs 40 billion. Chairman Railways said that Rs 6 billion sovereign guarantee approved by Ministry of Finance was yet to be realised, however they had received letter of support and were set to place orders for procurement of spares for locomotives overhaul. "Financial bids are expected to be opened next week and repair of the locomotives would be completed within next one-and-a-half-year," he added.
It was also revealed that next meeting of Central Development Working Party (CDWP) at the Planning Commission would approve procurement of 50 locomotives and these would be available to Railways within minimum possible time. Through improvement in freight operations, PR has increased its revenue by Rs 1.4 billion as compared to the last fiscal year, Chairman PR added.