JAPAN: Japan realized that its Japan National Rail was getting off the track. JNR plunged into financial difficulties from the 1970s through the 1980s and was on the verge of bankruptcy. Japan government suspended part of JNR's long-term debt in 1976 and 1980 as part of a financial rehabilitation project. These moves had no effect at all, and the rehabilitation ended in failure. JNR's long-term debt hit ¥ 23,561 billion at the end of fiscal 1985. Under pressure to control and eliminate the financial burden generated by JNR, the government decided to restructure the national railways. In 1987 the government decided to dismantle JNR into 7 regions; JR East, JR West, JR Central, JR Kyushu, JR Hokkaido, JR Shikoku with full private ownership. Japan Freight Railway Co. was given the task of handling freight. In the isolated islands these enterprises needed government support and hence Japan state enterprises bought all shares of JR Hokkaido, JR Shikoku, JR Kyushu and JR Freight. Some scholars criticized the government, insisting that the huge JNR accumulated debt would not have been incurred if the government had written it off every 2 or 3 years like the British and German governments. However, from a different point of view, this gigantic visible debt underscored the need to reform JNR. If the government had frequently written off the accumulated debt, the Japanese would have never thought it necessary to reform the state-owned railways. Currently over 100 private firms operate train services, 16 regional train operators and dozens of smaller train operators.
BRITAIN: The conservative government of Margaret Thatcher in 1979, sold off various state-owned businesses, some relating to railways: Sealink ferries, British Transport Hotels, Travellers Fare and British Rail Engineering by 1989. John Major enacted Railways Act 1993. Operations of BRB were broken up and sold off, with various regulatory functions transferred to Office of Rail Regulator (ORR). Infrastructure and larger stations passed to Rail Track. Track maintenance and renewal assets sold to 13 companies across the network. Ownership of passenger trains passed to three rolling stock operating companies (ROSCOs). The stock being leased out to passenger train operating companies (TOCs), awarding contracts through a new system of rail franchising overseen by the Office of Passenger Rail Franchising (OPRAF). Ownership and operation of freight trains passed to two companies English Welsh and Scottish (EWS) and Freightliner, although there are considerably more now. Today there are over 100 private train operators in the UK. The process of privatization has been controversial and hotly debated but has never been reversed and the system remains largely unaltered.
EUROPE: In Sweden in 1988, Swedish State Railways was split into two. Swedish Rail Administration took control of track network and SJ to operate the trains. It allowed local county authorities to tender for local passenger services to be provided by new train operators. The Swedish system appeared to be very successful initially, although some train operators subsequently went bankrupt. The story of state railways has been the same all over Europe. In Germany, France and other EU states the railways have been under scrutiny and heavy subsidies. The Swedish experiment was watched with great interest in all these countries. In 1991, following the successful Swedish example, the European Union issued EU Directive 91/440. This required all EU member states to separate 'The Management of Railway Operation and Infrastructure from the provision of railway transport services. Separation of Accounts being Compulsory and organizational or institutional separation being optional', the idea being that the track operator would charge the train operator a transparent fee to run its trains over the network, and anyone else could also run trains under the same conditions (Open Access). Single European Railway Directive 2012 2012/34/EU, allows open access operations on railway lines by companies other than those that own the rail infrastructure. The legislation includes cross border transit of freight. The Second Railway Package, the Third Railway Package, and the Fourth Railway Package by EU, aim to push European integration in railways, cutting through national monopolies. Currently there are more than 800 train operating companies and over 60,000 locomotives in Europe.
USA-CANADA: Unlike the rest of the world, railways in USA, developed as private enterprise with occasional grants from the government. Huge railway companies developed each owning 30,000 to 50,000 km rail tracks. By late nineteen century these companies starting consolidation, eliminating smaller holding companies. In year 2000, the share of US rail freight was 38%, with 1,471,736 freight cars and 31,875 locomotives and of 215,985 employees. Amtrak is the largest passenger train operator with 300 trains daily, is a public listed company with subsidies from government. BNSF Railway, Canadian National, Canadian Pacific Railway, CSX, Kansas City Southern (KCS), Norfolk Southern Railway and Union Pacific Railroad are the major players with more than 30,000 km rail track and over 8,000 locomotives each. Besides these major players, there are scores of smaller companies in freight and passenger. Urban transport is a mix of state and private ownership. The EU directives on railways brought about a sea change in how railway is operating across Europe. Passenger service has improved, number of passengers using railways has more than doubled and railways as an industry has come up in a big way. Passenger satisfaction according to the National Rail Passenger survey has risen from 76% in 1999 (when the survey started) to 83% in 2013 and the number of passengers not satisfied with their journey dropped from 10% to 6%. According to a Euro barometer poll, satisfaction with rail of UK respondents is the second highest in the EU, behind Finland. The poll found that average UK satisfaction over four different areas was 78%, ahead of France (74%), Germany (51%) and Italy (39%). Since privatization, the number of national rail journeys in UK had increased by 117% by 2014 and the number of passenger-km had more than doubled. There is controversy as to how much of this is due to privatization, and how much is due to other factors such as rising fuel prices, road congestion, low unemployment, and in particular, GDP growth. However, this increase has kept going during the entire duration of privatization, with passenger numbers growing much faster than comparable European countries such as France or Germany, who did not go for privatization but had to separate the infrastructure from train operations as per EU directives. Since privatization, the amount of investment in UK has gone up nine-fold, from £698m in 1994-95 to £6.84bn in 2013-14. A study by the European Commission which looked at how the railways in Europe have progressed and improved since the 1990s found that the UK network was most improved out of all the 27 EU nations from 1997-2012. Maybe we have messed up our railways far more than Japan, UK, Europe and some other countries. These nations were probably more resourceful and responsive to their institutions and citizens. While others moved on with their railways, we are still sitting on the dinosaur's corpse. Until 1960, PR handled 73 percent of the country's freight traffic compared to less than four percent in 2015. Passenger traffic would be no different. The neglect and indifference of successive governments is all too apparent not to mention the inefficiencies of the bureaucratic juggernaut that controls railways. Pakistan Railways has 546 locomotives, only 150 are in operation and the rest are stored for last 10-15 years. Same is the case of Freight Vans and Passenger Carriages, 60-80% of Rolling Stock is inoperative. Track Utilization is 0 - 10% on branch lines, some tracks have not seen a train in over 10 years. Railways is notorious for theft and pilferage, so you can never be sure of the actual status of the rolling stock, not even the railway management. Pakistan is positioned vertically North-South, with the only seaport in South and major population centers at least 1500 km to the North. A businessman in Lahore pays more than Rs.1 lac for transporting a 40ft container by truck from Karachi to Lahore. By a competitive rail standard, this freight should not be more than Rs 25,000/=. One can imagine the competitive position of upcountry businesses compared to Karachi. Almost a quarter of the population of Karachi travel to their ancestral homes in KPK using the only practical means of transport that is railways. The condition of railway trains and coaches is no secret. Every train journey is not just inconvenient it is cruel. This has to change and all the ingredients of change including a new government in Islamabad are in place. What is needed is just a bold leadership! First step that needs to be initiated is separation of infrastructure from train operations. Infrastructure consisting of rail tracks, major stations, signaling, bridges and other railway infrastructure could be made into an independent entity under Ministry of Railways. Train operations could be designed on the lines of EU directives on Open Access Regime. This regime has been in place for over 25 years and is well tested in several countries. If a small country like Spain has over 500 trains departing daily, Pakistan should have at least 1000 track access charges alone should be able to comfortably cover the whole budget of railways. IPDF has already prepared a document on track access some 10 years ago. Division of railways on the lines of infrastructure and train operations can have a positive impact on Pakistan economy. Private train operations could easily absorb the current railway staff. The Railways Minister may consider this well tested management system without disturbing the railway morale. Considering the financial constraints of the federal government, money for railways with its current losses may not be forthcoming, hence some bold initiative is urgently required. Private train operators can bring their own rolling stock for train operation. However they will have to look to railways for the manpower and technical skills, creating thousands of new jobs. Private railways can create major demand for steel, railway engineering, coach manufacturing and vendor industry. Private railways can only be a win-win situation both for railways and commuters without any downside. Railways has very strong economic and social indicators. An efficient railway can add 2% to the National GDP. Railways is 76% less polluting than road transport and 3 times as competitive. The economy can have significant savings in fuel by switching over from road to railways not to mention the connectivity, convenience and safety benefits that are hallmarks of railway travel. Several smaller towns and cities can be connected to our major cities bringing social and economic change to far flung isolated towns and also promote tourism.
(The writer is Convener Standing Committee on Railways)