Siemens AG (Berlin and Munich) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. The company has around 400,000 employees (in
continuing operations) working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of solutions for individual requirements.
Our Values and Vision: a guide to our business conduct
Our stakeholders ² customers, shareholders, employees, suppliers and the societies in which we operate ² expect the highest performance and the highest ethical standards. Meeting these requirements is the ultimate determinant of our success. Reaching this goal requires a new balance in which values, business operations and the pursuit of our vision co-exist harmoniously. After closely examining our history and culture, we distilled our essence into three core values: Responsible, Excellent, and Innovative. These values supersede our former ¶principles· and must be lived interdependently. For each value, we have derived clear principles that guide our decision-making and behavior. They must be embedded in everything we do at Siemens.
Our values drive our vision which shows how the highest performance and ethical standards can deliver profitable growth. With the support of everyone at Siemens, it will enable us to become a role model for outstanding business conduct.
Responsible: Committed to ethical and responsible actions
At Siemens, we are determined to meet - and wherever possible, exceed - all legal and ethical requirements. Our responsibility is to conduct all business according to the highest professional and ethical standards and practices: there must be no tolerance for non-compliant behavior. The principles related to ¶Responsible· serve as the compass by which we navigate our way through our business decisions. We must also encourage business partners, suppliers and other stakeholders to adopt a similar standard of ethical behavior.
Our principles: We obey the law
We respect the dignity of all people
We foster health and safety We conduct business in a truthful and transparent manner
We are fair in our relationships with competitors and stakeholders
We honor commitments
We respect property
We strive for the protection of the environment
We are committed to good corporate citizenship
We are fully engaged and empowered to achieve the best results
Excellent: Achieving high performance and excellent results
We at Siemens set ourselves ambitious targets - derived from our vision and verified by benchmarks - and give our all to achieve them. We stand beside our customers in the search for perfect quality, coming up with solutions that exceed expectations. Excellence demands we define a path of continuous improvement, constantly challenging
opportunities open up. Excellence also means attracting the best talent in the marketplace and
existing processes. It also requires us to embrace change so we are in the right place when new
giving them the skills and opportunities they need to become high-achievers. We are committed to living a high-performance culture.
We set ourselves best-in-class goals and achieve them
We are passionate
We are willing to go the extra mile
We are disciplined and act fast and decisively
We always strive for improvements and perfect quality
We deeply understand our customers¶ needs and challenges
We systematically develop our personal skills and leverage our full potential
We interact in an efficient and pragmatic way
We embrace change to ensure we are competitive in the future
Innovative: Being innovative to create sustainable value
Innovation is a cornerstone of Siemens· success. We closely align R&D activities with business strategy, hold key patents and have a strong position in both established and emerging technologies. Our goal is to be a trendsetter in all of our businesses.
We unlock the energy and creativity of our employees, embracing the new and different. We are also ingenious and we embrace this quality in all its varied meanings - original, inventive and resourceful. We are entrepreneurs whose innovations are successful on a global scale. We measure the success of our innovations by our customer·s success. We constantly renew our portfolio to provide answers to societies· most vital challenges, enabling us to create sustainable value.
We create innovations that give our customers a unique competitive edge
We act as entrepreneurs
We are creative and open to new ideas
We are ingenious and visionary
We are trendsetters
We constantly challenge the status quo
Siemens has shown that it is committed to the principles of good corporate governance and that it is aware of its responsibilities as a global company ² for supporting the communities in which it does business, and for leaving behind an intact environment for future generations. The corporate strategy of Siemens has three main elements which are y y y Global competitiveness Customer focus Innovation
The perspective of the corporate strategy is technological leadership and worldwide presence by focusing on global competitiveness, customer focus and innovation. The company emphasizes a lot on innovation which for them means the ability to transform knowledge, creativity and experience into new products. "Inventing the future" is Siemens· motto. Simply chasing after trends isn't enough for a global corporation such as Siemens. Instead, it must identify promising ideas and new approaches at an early stage, lay down a course of action and emerge as an innovation trendsetter. To achieve this, Siemens is focusing on the future in numerous ways A major challenge for Siemens is corporate responsibility. In terms of corporate responsibility, the aim is to be an industry leader in the areas of corporate governance, compliance, climate protection and corporate citizenship. This defines important management emphases for Siemens corporate. Corporate responsibility is the integral part of the company·s corporate program for 2010. Siemens view risk taking as the philosophy of pursuing sustainable growth
and creating economic value.
SIEMENS RAIL INDUSTRY:
The core prod ucts for railw ay logist ics by SIEM ENS inclu de the follo wing: Rail automation, which includes spare parts and up to date railway related accessories. Locomotives, which are used for trams and intra city tracks. Electrification, which include state of the art electric supply system for maglev and electric trains. y y y Light rails, which are also used for trams and intra city commutation.
y y y
Trains, which include high speed valario and other bullet trains
Turnkey systems, which are specific trains designed for underground subway systems.
Integrated services, which include software and hardware solutions for railway
logistics and supports. y Heavy rail, which are used for freight and cargo delivery.
Major faciliti es of
SIEME NS are locate d world wide, provid ing it a compe titive edge over its competitors and enabling a R&D that is localized to every part of the world. This network of facilities across the world enables SIEMENS to produce high quality products at cheaper prices, because it is able to reduce its manufacturing costs as well as its distribution and transportation costs. Currently SIEMENS is present in more than 40 countries of the world and its major facilities are located across all the continents such as AMERICAS, EUROPE, ASIA-PACIFIC and AFRICA.
Siemens invest a lot in R&D and considers research to be the basic tool for their growth in different countries of the world. Siemens innovation answers world·s toughest questions. Its innovation in the night vision systems for cars, in 2005 sep 16,at the International Motor Show (IAA) in Frankfurt, Siemens introduced a night vision system that works with infrared technology. With this innovation, Siemens has also become the first automotive industry supplier to create a prototype of an electronic pedestrian recognition system. One quarter of all serious traffic accidents take place in the evening or at night. And about one third of all traffic fatalities are the result of accidents during these hours. In 2006, Siemens introduced a thinking car. The car possesses sophisticated sensors, which help to monitor traffic and warn drivers of dangers in advance. The car provides a more safe, comfortable, reliable and environment friendly drive. Sensors warn the driver of obstacles on the road even under poor visibility conditions, help park the car and also recognize traffic signs. In a traffic jam, the thinking car tracks the vehicle ahead per video system and adapts itself automatically to the traffic flow through independent braking and acceleration. Siemens· innovation activities are based on the company·s Innovation Framework, a matrix that defines what makes innovation successful. Along with technological know-how and knowledge of customers needs and market trends, the factors affecting business success are specialized sector know-how, excellent innovation processes and, above all, highly motivated, highly skilled employees. Siemens also employs innovation benchmarking. This helps them to pinpoint areas where they are lagging behind and the position of the competitors, through this methodology they try to catch up with the competitors. Mark Engelfried, senior consultant in the Competence Center for Innovation at Siemens CT (corporate technology).
"With our innovation radar we can detect all the success factors behind the innovation³from strategy and culture to technology and processes. Of course, in practice we don·t carry out a full assessment of every project. Instead, we focus on areas of potential weakness, such as the innovation portfolio or innovation processes." To maintain competitiveness, businesses must be fast and flexible. Digitalization and virtualization have important roles in achieving these goals. Siemens uses the following five main criteria for success in the Siemens Innovation Framework. These are closely linked as shown in the picture.
Thus the company emphasizes on innovation and the reason for this innovation is their goal, which is to become the world leader.
At Siemens, corporate responsibility is a strategic managerial process aimed at integrating business, environmental and social performance to create greater value and enduring benefits within a framework of ethical practices. The figure also explains further
GLOBAL SALES OF SIEMENS
Sales (millions of Euro, percentage of total)
AMERICA GERMANY AFRICA,MIDDLE-EAST,CIS %9 , 6.8 10.9 %15 , 12.6 %17 , 19.3 %27 , 22.8 %32 , (EUROPE(exc Germany ASIA-PACIFIC
SIEMENS' MAJOR R&D INVESTMENTS
y y y y y y y
½3.4 billion were invested in R&D in fiscal year 2007 32,500 R&D employees worldwide 17,500 software engineers 150 R&D locations in over 30 countries around the world 8,267 inventions in 2007 50,750 active patents
R&D CENTRES PRESENT GLOBALLY
PRODUCTION FACILITIES PRESENT GLOBALLY
EUROPE excluding Germany 59
AFRICA,MIDDLE -EAST,CIS 3
*The top manufacturing facilities are present in USA with about 21 facilities
The global activities that are carried out by Siemens are divided in different groups with each group specializing In their own domains and later the integration of all the products and solutions that are provided by the Groups is done to offer a world class service to its customers. The T&S Group specifically deals with rail automation and providing turn-key solutions. The group has been engaged in producing a
powerful freight locomotive that has the capacity of carrying upto 6ooo tons of weight! In 2007 the profit margin of the group had increased from 1.6% to 4.3% with a net profit of about 190 million euros. The group as of 2007 employed 389,000 people worldwide
FOREIGN MARKETS ATTRACTIVE FOR SIEMENS
The two foreign markets that is feasible for Siemens Germany is China and India. This is because Siemens already has increasing presence in the Chinese and Indian Markets. It has been engaged in providing several high speed trains to China and had also worked in collaboration with Shanghai Metro Group since 1989. It has also engaged in the expansion of the metro in
Guangzhou since 1994. According to Siemens China is providing Siemens with a "strong base in a dynamic environment"
India has been one of the major countries where Siemens is catering to the electrical engineering and electronic market. The country is offering tremendous growth potential for infrastructure development for Siemens. Siemens India is a "key market for growth" for
Furthermore, according to the IMD World Competitiveness Scoreboard of 2007, China is rated as 15 and India as 27 showing that the two countries provide a competitive environment.1
CURRENT RAILWAY CONTRACTS:
Some of the current railway contracts undertaken by Siemens are the following y In India, Siemens has established about 18 factories. Siemens is providing world-class trains in India y In Russia, Siemens has signed a 30 year contract to provide its high speed Velaro trains to the country y Siemens has shipped an eight carriage Velaro high-speed train to China in December. The train can accommodate about 6oo passengers.2 y Siemens has received a EUR 140 million contract from America which is one of the biggest contracts to modernize its railway system and make it more efficient. The project will be initiated this year.3 y A consortium made up of Siemens and its Chinese partner, CSR Zhuzhou Electric Locomotive (ZELC), has been awarded the contract for metro projects in China. The orders are worth a total of EUR 431 million. Siemens is responsible for the traction technology and automatic train control systems.4
http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tstr20071206.htm http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tsra200712008.htm 4 http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tsmt200711010.htm
Siemens signed a contract with Porter book of UK
which is a rail leasing company to supply 37 units of Desiro electric multiple units in 2007.This contract is worth EUR 340million. Porter book would further lease these trains to the rail operator Govia5.
The SIEMENS consider the following as their major competitors in the market y y y y Alstom of France Bombardier of Spain Finmeccanica of Italy Invensys of United Kingdom
Mini bar in AVG train The Bullet train network was built first time in 1992 in Spain. The country is known for building the world·s fastest trains. The country uses modern technology in locomotives, signal system, passenger and freight coaches and the laying of rail tracks in order to bring an overall improvement in the railway network and operations through which Pakistan can benefit also. Spain has been one of the countries where rail network plays an important role and there is a demand for high speed trains. Currently the most popular high speed bullet train is the AVE train (Alta Velocidad Español) that is run on the Madrid-Cordova and Seville route. It can
allow seating of above 300 passengers and apart from having seats comparable to first class seats in an aeroplane, it also has a mini bar for the convenience of the customers.
Another high speed train is TALGO that is also air conditioned to facilitate the customers in
the hot summers of Spain. For cost conscious customers, government owned rail network OF Spanish State Railways or RENFE. A wide range of services is provided by the company including first and second class seatings and special discounts for people under 26 years of age and senior citizens. Currently Spain is also engaged in building a road link between Barcelona and the French Border which also includes the passage of a tunnel underneath the mountains.
Germany is also one of those countries that are famous for the provision of the world·s fastest trains. One of the popular trains is the DeutscheBahn Intercity Express ICE with speed ranging from 175mph to 280mph linking various cities of Germany together. I ntercity Express, Germany Germany is also building up its Trans rapid Maglev (magnetic levitation) train which can travel 342mph Iran has also partnered with Germany to build a Maglev line between Tehran and Mashad.
Siemens AG of Germany and RENFE also signed a contract to provide 16 high speed Velaro
high speed trains for the Madrid-Barcelona operation line. These trains have a design speed of about 350 km/hr.
One such company is Alstom that have produced trains with the travel speed of above 530 km/hr. On March, 2007 it has won two high speed rail contracts worth 350 million Euros with China which includes the manufacturing of 500 electric freight locomotives and building of an electrified line linking the two cities Shijiazhuang and Taiyuan. SNFC is the company that is running France railway networks .it is also operating TGV trains (Trains à grande vitesse) are very popular in France which not only provide dining service, but also have a nursery for children, sockets for computer plugging, vending machines installed across the train etc. currently the TGV trains are the World·s fastest conventional trains with speed capability of up to 574.8 km/hr.
Japan was the pioneer in building railway network for high speed travel. Railway lines in Japan are operated by Japan Railway Group companies. The famous Shinkansen trains are also operated by the JR group. The trains are able to withstand the earthquake and typhoon prone environment with travelling speed of 300 km/hr. Japan continues to refine its capabilities in the bullet train category and the country is also working side by side on the Maglev system as well claiming to achieve eventually a world record speed of 581 km/hr. The train known as the JR-Maglev is the world·s fastest non-conventional train. Russia is in talks with Japan to build bullet train lines running to the Black Sea resort of Sochi which won the bid to host the 2014 Winter Olympic Games.
The country that is becoming a major economic power already has also placed great emphasis on the rail networks as well. The Ministry of Railways reported to have received RMB 3 billion of foreign funds for the development and up gradation of China·s railway sector in 2006. Considering the population size and the demand in the country the government is encouraging further foreign investment in this important and significant sector. As mentioned earlier the contract that was signed with the French Company Alstom will allow the travelling time to be even more efficient than that compared to air travel because the network will link one city centre to the other. Lang Guoping, Deputy Head of the preparation tram with the Beijing-Shanghai passenger line company stated that 80 % manufacturing of these high speed trains will be done in China. The country has also established joint ventures with Siemens of Germany, Alstom of France, Kawasaki of Japan and Bombardier of Canada. China is also developing its own Maglev trains that can travel up to speeds of 500 km/hr. In 2003, it built a maglev link from Shanghai to its main airport which was made using German Technology.
RAILWAY TECHNOLOGY AND TYPES OF HIGH-SPEED TRAINS
The rail gauge is basically the distance that is present between the parallel railway lines. There are basically three types of rail gauge that is used
y y y Narrow Gauge (about 3 ft 6 inches width) Standard or International Gauge (4ft 8.5 inches) Wide gauge (above 4ft 8.5 inches width)
There is a shift from narrow to standard gauge because the Standard gauge has a greater over hauling capacity and is suitable for moving at much faster speeds than narrow gauge. At times dual gauge are used which have 3-4 parallel railway lines that allow trains having different widths to travel on the same path.
1. This type of locomotive derives its power from the following external sources 2. Overhead lines or Third Rail. Usually the electric trains have three rails, 2 of the rails are used for the wheels of the train with the third rail having overhead cables that carry current. The overhead wires can carry voltage of up to AC 25,000volts. In Japan and France the electricity to run electric trains use nuclear power source. Others use fossil fuels to generate the electricity.
3. Rechargeable energy storage system such as a battery can also be used
In various countries of the world electric trains are being used, indeed one of the World's fastest trains the TGV of France and the Shinkensen of Japan is also an electric train. The infrastructure to develop the rail track is extremely expensive and can only be possible through Government's financial support. The cost to electrify the train would be equal to the cost of building the track itself. The trains are having the following characteristics 4. The trains are almost noiseless as there is no engine or exhaust noise 5. Maintenance cost is also low. 6. In developed countries it is frequently used where there are frequent stops such as for commuter rail service, and in areas with an advanced network. 7. The trains will be benefit in those countries where there are depleting oil reserve 8. They are more environment friendly than diesel locomotives if being produced from renewable resources
The second option that can be considered is the introduction of diesel-electric trains. With such trains a diesel engine is basically used to provide the power to an electric generator that basically drives the vehicle, it can be suitable during those journeys where there is a problem of availability of an external power source. Although the technology has been brought about after that of electric trains, still many countries are using the trains and secondly it also avoids the extensive costs required for infrastructure development that is required for electric locomotives. USA for example had de-electrified certain networks and has increase usage for diesel trains because of their flexibility and low infrastructure costs. The train is also more fuel efficient than the electric locomotive if the external power source is taken into consideration that drives the electric trains.
The diesel electric technology apart from being used in trains is also used in buses, submarines, ships cars and trucks.
This type of train has revolutionized the railway industry. The train can reach record level speeds of above 581km/hr. This is because of the fact that it does not need wheels to move as it travels above ground level with the help of electro-magnetic induction thereby greatly reducing ground friction with only the presence of negligible air resistance. The train operates using three major components. y y
Large guidance magnets attached to the underside of the train
A powerful electric power source
A track lined with metal coils
Although the train can carry large number of passengers and does not cause pollution, the magnets used demand a large supply of electricity hence are very expensive to operate. The Shanghai Maglev train started operations in 2001-2002 which was built using the technology of Siemens.
HISTORY OF PAKISTAN RAILWAYS
The possibility of Karachi as a sea port was first noticed in the middle of 19th century. Sir Henry Edward Frere was appointed Commissioner of Sindh after its annexation with Bombay in 1847 and sought permission from Lord Dalhousie to begin a survey for a sea port. He also initiated the survey for a railway line in 1858. It was proposed that a railway line from Karachi City to Kotri, steam navigation up the Indus and Chenab rivers up to Multan and from there another railway to Lahore and beyond be constructed. It was on 13 May 1861, that the first railway line was opened for public traffic between Karachi City and Kotri, a distance of 105 miles (169 km). The line between Karachi City and Kiamar was opened on 16 June 1889. During 1897 the line from Keamari to Kotri was doubled. The railway line from Peshawar to Karachi closely follows Alexander·s line of march through the Hindu Kush mountains to the Arabian Se. Different sections on the existing main line from Peshawar to Lahore and Multan and branch lines were constructed in the last quarter of 19th century and early years of 20th century. The four sections, i.e., Scinde (Sindh) Railways, Indian Flotilla Company, Punjab Railway and Delhi Railways, working in a single company, were later on amalgamated into the Scinde,
Punjab & Delhi Railways Company and purchased by the Secretary of State for Indi in 1885,
and in January 1886, it was named North Western State Railways, which was later on renamed as North Western Railway. At the time of independence, 1,947 route miles (3,133 km) of North Western Railways were transferred to India, leaving 5,048 route miles (8,122 km) to Pakistan. In 1954, the railway line was extended to Mardan and Charsada, and in 1956 the Jacobabad-Kashmore 2 ft 6 in (762 mm) gauge line was converted into broad gauge. In 1961, the Pakistani portion of North Western Railways was renamed Pakistan Railways. The Kot Adu-Kashmore line was constructed between 1969 and 1973 providing an alternative route from Karachi up the country Pakistan Railways is the state-owned railway company of Pakistan. It is a large organization under the administration of the Pakistani Government's Ministry of Railways. Pakistan Railways provides an important mode of transportation in the farthest corners of the country and brings them closer for business, sightseeing, pilgrimage and education. It has been a great integrating force and forms the life line of the country by catering to its needs for large scale movement of people and freight Pakistan Railway comprises 8,775 route km, 781 stations and 42 train halts. It has a fleet of 546 diesel electric locomotives, 25,815 wagons and 2,099 passenger coaches. Maintenance is provided by three major locomotive workshops and thirtyfive smaller workshops.
RAIL STATISTICS OF PAKISTAN
total Length : 8,163 km
broad gauge: 7,718 km 1.676-m gauge (293 km electrified) narrow gauge: 445 km 1.000-m gauge (2006)
The total length of railway tracks in Pakistan is 5,072 miles (8,162 km). The busiest routes include:
y y y y y
Peshawar-Karachi Route Peshawar-Quetta Route Lahore-Sialkot Route Lahore-Faisalabad Route Faisalabad-Khanewal Route
Major Stations and Junctions The major stations and junctions between Peshawar and Karachi include: Peshawar,Darya Khan,Mianwali,Bhakkar,Kaloorkot Nowshehra Jn., Attock City, Rawalpindi, Jhelum, Lalamusa Jn., Gujrat, Wazirabad Jn., Gujranwala, Lahore, Lahore Cantt., Raiwind Jn., Okara, Sahiwal, Chichawatni, Mianchannu, Khanewal Jn., Multan Cantt., Lodhran Jn., Bahawalpur, Samasatta Jn., Khanpur, Rahim Yar Khan, Sadiqabad, Pannu Aqil Cantt., Rohri Jn., Khairpur, Bhiria Road, Nawabshah, Tandu Adam, Hyderabad Jn., Kotri Jn.,Jangshahi, Landhi Jn., Karachi Cantt. And Karachi City. The major stations and junctions between Peshawar and Quetta are:
Peshawar to Rohri Jn. (same as above), Sukkur, Shikarpur, Jacobabad Jn., Dera Murad Jamali, Sibi Jn., Ab-e-Gum, Mach Spezand Jn and Quetta
y y Improving Quality of Service Reducing Expenditure
o Cut down further on electric consumption o Reduced the work force by another 5000 employees through attrition and rationalization o Sui Gas connections will be handed over to Sui Northern Gas to avoid extra expenditure on bulk supply
o Purposed performance indicator
Passenger Year PKMs (Rs) 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 22.8 23.2 23.7 24.3 25.0 25.8 26.8 27.9 8.2 8.6 90. 9.5 10.0 10.7 11.7 12.9 4.9 5.5 6.3 7.3 8.4 9.6 11.1 12.7 Earning TKMs (Rs) 4.6 5.2 5.9 6.9 7.9 9.0 10.4 11.9 (Rs) 1.7 1.9 2.0 2.3 2.5 2.8 3.1 3.6 (Rs) 14.5 15.7 16.9 18.7 20.4 22.5 25.2 28.4 Freight Earning Other Earnings Overall Earnings
PAKISTAN RAILWAYS DEVELOPMENTAL PLANS 2005-108
The below mentioned plans are the midterm plans that the organization intends to complete in the time period of five years; it is significant to note that currently Pakistan Railways has not included the feasibility study for metro train in its mid tern plan. 1. Up gradation and improvement of track from Khanpur to Lalamusa 2. Dualization of Track from Khanewal to Raiwind and Shahdara to Lalamusa 3. Setting up of a railway yard and railway linkage from Gwadar port to container yard 4. Rail link from Gwadar Port to existing rail link at Ahmad wall on Quetta Taftan section 5. Up-gradation of Rohri ² Quetta ² Taftan section 6. Feasibility Study for provision of rail link from Dina to Mirpur AJK 7. Improvement and rehabilitation of old and obsolete signaling system on Karachi ² Peshawar section in phases 8. Electrification of Lahore ² Khanewal double line section with rehabilitation of existing single line Lahore ² Khanewal section 9. Procurement/ manufacturing and assembly of 100 passenger coaches 10. Other minor projects The estimated cost of completing the above mentioned projects is approximately Rs. 124 Billion.
The major emphasis of Pakistan Railways has been on the replacement of overage assets. Due to resource constraint, however, it is now engaged in modernizing certain areas as best as it can. These include the following:y To ensure more comfortable journey it has been decided to manufacture only lower class air-conditioned coaches in future. y y All second class coaches are being provided with cushioned seats. Reservation work has been computerized on modern lines at Lahore and Karachi stations; the system's two major reservation centers. Computerization of reservation offices of Peshawar, Rawalpindi, Faisalabad, Multan and Hyderabad is in progress and is likely to be commissioned shortly. The steps are now underway to link these stations with other major railway stations. y Closed circuit televisions have been introduced at Lahore, Karachi, Multan and Faisalabad railway stations. This entertainment is being extended to Sukkur, Rawalpindi and Peshawar stations in the next phase. Subak Kharam and Shalimar trains have also been provided with closed circuit televisions and this system is being provided in Subak Raftar also. y Public address system is being provided in Subak Raftar, Subak Kharam, and Tezgam and Khyber Mail trains. y Modernization of Karachi, Quetta, Hyderabad, Multan, Lahore, Faisalabad, Rawalpindi and Peshawar Railway stations, removal of hindrances on railway platforms and up gradation of approach roads are being carried out.
Private Sector is being encouraged to participate in the activities of the system.
As a first step, ticket selling and ticket checking on Lahore-Faisalabad and LahoreNarowal-Sialkot Sections have been privatized. y Feasibility study for a high-speed track is in hand.
GOVERNMENT REGULATION & POLICIES (INTERNATIONAL)10
Throughout the world, the rail industry historically has been one of the most extensively regulated of all sectors. Price, entry, exit, financial structure, accounting methods, vertical relations, and operating rules have all been subject to some form of government control. The public utility paradigm of government regulation has been applied on the assumption that the economic characteristics of the rail industry preclude competitive organization or the need for market responsiveness. In the past three decades, however, policymakers and economists have become increasingly critical of traditional regulation of the rail industry. It is generally accepted that in markets where rail carriers seek to meet demand, there is often effective competition and that government restrictions on the structure and conduct of firms in this industry impose considerable costs on society. Misguided regulatory policies have been blamed for the misallocation of freight traffic among competing modes of transport, excess capacity, excessive operating costs, and poor investment decisions. Regulatory controls have also shouldered much of the blame for the poor financial condition of railroads, the deterioration of rail plant, the suppression and delay of cost-reducing innovations, and the mediocre quality of rail service.
GOVERNMENT REGULATION & POLICIES (NATIONAL-PAKISTAN)
The government has decided to restructure Pakistan Railways (PR) into a public sector corporation in the process of developing a commercial approach and introducing professional
management and private investment. The restructuring will be part of a major reform exercise to revitalize Pakistan Railways to enable it to play its due role within the transport sector and in the economic and social development of the country, the sources said. Pakistan Railways Corporation will focus on core business of rail services, while the non-core business entities such as factories, schools, hospitals and marketing of land assets will be managed through subsidiary public limited companies which would function under the administrative control of the Ministry of Railways through a holding company. The manufacturing units of Pakistan Railways; the Carriage Factory, Islamabad; Locomotive Factory in Risalpur; and Concrete Sleeper factories each at Sukkur, Khanewal and Kohat will be transformed into separate companies under the company laws of the country. There are certain benefits relating to this reform exercise:
1. It would offload railway budget from the non- core activities 2. It would facilitate manufacturing units to have their autonomous entities for seeking business from the private enterprises 3. It would facilitate preparation corporate plans and feasibility for their future operations and implementation strategy. 4. The manufacturing units will follow a policy for developing indigenous capabilities of the new companies to design, manufacture coaches, locomotives and sleepers by developing research and development activity, design centre, human and capital formation 5. It would lessen dependence on foreign manufactures and develop potential to compete in
Pakistan Railways had recently launched the Bhambore Express to cater to the requirements of the working class running between Rawalpindi and Karachi via Sargodha, Faisalabad and Multan; it would take twenty-five hours to complete its journey in. the introduction of high-speed train would reduce the time to 8 hours approximately which would in turn make it easier for the citizens to travel on longer routes without hesitation.
Contingent liabilities are costs which the government will have to pay if a particular event occurs. These are obligations triggered by a discrete but uncertain event. Contingent government liabilities are associated with major hidden fiscal risks; a common example of a contingent liability is a government-guaranteed loan. At the time a guarantee is entered into there is no liability for the government, since this is contingent upon the borrower failing to repay the loan as contracted. However, in the event of default, the lender can invoke the guarantee and the government will be obliged to repay the amount of the loan still outstanding. At that point, the contingent liability will become an actual liability of the government, and a payment must be made.
EXPLICIT CONTINGENT LIABILITIES:
These are specific government obligations defined by a contract or a law. The government is legally mandated to settle such an obligation when it becomes due. For example
Guarantees for borrowing and obligations of provincial governments and public or private entities. Umbrella guarantees for various loans (SME loans, agriculture loans) Guarantees for trade & exchange rate risks
State insurance schemes.
Guarantees for private investments
IMPLICIT CONTINGENT LIABILITIES:
These represent a moral obligation or expected burden for the government not in the legal sense, but based on public expectations and political pressures. For example; Defaults of provincial governments and public or private entities on non-guaranteed debt and other obligations. Liability clean-up in entities being privatized Bank failures Disaster and relief financing. Failure on other non-guaranteed funds.
According to Table 1 and 2 in the appendix , During FY 2004-05, an amount of Rs.3.24 billion has been paid on account of debt servicing liability(Government guaranteed loans) and the implicit contingent liabilities added up to Rs. 3.95 billion for the same fiscal year which undoubtedly a huge amount. These figures are significant because of the fact that before permitting Pakistan railways to invest in a project as expensive as the introduction of bullet train, it is imperative to completely analyze the overall feasibility of the project so that in the near future the budget can be saved from the contingent liabilities.
CURRENT CHANGES IN POLICIES
Railways to improve privet partnership in freight investment
NLC (National Logistics
Council) in joint collaboration with a Dubai based group has offered Pakistan Railways to operate their own container coaches between Karachi and Lahore in cargo operations. PR currently has only a four per cent share of the total freight business activity; the scope is tremendous and opportunities for growth are unlimited as Pakistan is becoming a business hub between Europe, Central and Middle East in the coming years. The volume of business can be doubled in no time as there is great demand from the business community of Pakistan to increase the number of fast cargo wagons from Karachi downwards. As a matter of fact High capacity express container trains have been introduced, which operates daily between Karachi and Lahore.
Open Track Policy 12- This policy was initiated by Pakistan Railways to improve the efficiency and overall business opportunity of the organization. According to this policy the private parties can operate their own rolling stock while paying track access charges to Railways; this would basically bring in some extra money in addition to the fact that these foreign companies may be influenced to get their wagons manufactured at Carriage Factory Islamabad and Mughalpora Workshop Lahore. This would not only save the foreign exchange but also provide financial gains to Railways which is already involved in manufacturing of such wagons at international standards.
Pakistan Railways & Pakistan Post
Pakistan Railways and Pakistan Post signed an
agreement under which Pakistan Post will book railway tickets and seats in 16 cities of the country; with the passage of time this facility would be extended to the whole country.
Railway Ministry is trying to improve train food
Pakistan Railways has decided to contact
owners of renowned restaurants to serve food on major trains at subsidized rates and has sent a proposal in this regard to the Prime Minister·s secretariat for approval. Pakistan Railways Advisory and Consultancy Services (PRACS) is currently responsible for managing food services on almost all major trains. Railways authorities have warned PRACS several times that if they do not improve the standard of food and service PR would award the tender to restaurants or caterers. The ministry has now proposed that PRACS will handle the catering but would get the foodstuff from elsewhere in order to improve the overall quality of food.
Ministry allows Mobilink to install PCO s at railway stations
Pakistan Railways has allowed
Mobilink to operate and install PCO facility at railway stations across the country on urgent basis as they have realized that it is unjustified to deprive over 80 million passengers and their relatives who visit railway stations throughout the year, of this facility which makes them communicate on cheaper rates. Mobile PCOs would also be introduced in near future enabling rail passengers to be in contact with their families while travelling.
http://www.pak-times.com/2007/08/29/pakistan-railways-pakistan-post-sign-deal-for-railway-booking-in-16cities/ 14 www.dailytimes.com.pk/default.asp?page=2007%5C06%5C30%5Cstory_30-6-2007_pg7_19 - 38k 15 www.app.com.pk/en/index.php?option=com_content&task=view&id=23571&Itemid=2 - 35k
OVERALL INDUSTRY ANALYSIS
The rail supply industry has successfully adapted to changing market conditions arising from deregulation, market concentration and globalization. Today, the worldwide market for rail technology represents a business volume of EUR 103.3 billion. 70% of the overall market is accessible to suppliers; the rest is work conducted by rail companies or municipal public transport authorities themselves. Over the next ten years, the rail industry is expected to grow at a real growth rate of 2% per year. The most important growth markets will be Eastern Europe, CIS and Asia Pacific.), the continuing liberalization of the rail market as well as railway maintenance needs will create new opportunities for the supply industry. According to a study commissioned by UNIEF (Association of the European Railway Industries) 16the markets of 41 countries have been analyzed, the analysis represents approximately 1.5 million kilometers of tracks and 4.1 million units of rolling stock. The industry was strong in the past and is currently showing positive trends as well. According to an analysis conducted by Roland Berger Strategy Consultants on behalf of the Association of European Railway Industries (UNIFE), the total world market for the rail supply industry is estimated at EUR 103 billion, with an expected annual growth of between 1.5% and 2.0%1 over the next decade (see picture 1).
Picture 1: Market volume and growth, overall rail market [EUR bn]
There certainly exist excellent market prospects for mass transit and mainline systems as this particular industry is playing a major role in the world economy as mentioned above earlier. There are various reasons as to why the growth rate of 2% has been quoted, a few of them are mentioned below: y Growing rail traffic volume will play a role, as will heavy urbanization and economic
growth in emerging markets
Governments are showing increasing support for the development of railways
and public transport y Rail transportation plays an important part in the sustained development of their economies y y By2015 passenger traffic will have increasedby30% and freighttrafficby70%; 50% of the world's population today lives in urban areas. By 2020 this proportion will have increased to 60% (in Europe it is already 75%)Strong need for mass transit systems y For travel times of less than 4 hours, high speed trains are more frequently used than airlines y High-speed rail traffic in Europe has tripled in the last ten years
These figures definitely highlight the fact that a practical step has to be taken by all the countries to cater to this future need and that great business opportunities exist for the organizations involved in this Transport industry. Markets in Eastern Europe, CIS and Asia are showing the strongest growth. Within the next few years, these markets are expected to see annual growth exceeding 3%. This can be explained by the economic and population growth in these regions, where the rail infrastructure is outdated or underdeveloped. For example, China is the clear forerunner and is quickly developing its rail and subway network. In Western Europe and the NAFTA countries (US, Canada, Mexico), where the rail network and rolling stock are well developed and firmly established, markets remain important because
1%, Western Europe remains the rail supply industry's biggest market, accounting for 32%
of their sheer absolute volume. Despite low annual growth rates that hover between 0.5 and
(EUR 34 billion) of total business. The light rail segment sees the highest growth in the Western European market, with annual growth rates of 3%. The service, rolling stock and passenger car segments are also growing at above-average rates. The NAFTA region accounts for 22% (EUR 22 billion) of market volume. The development of particular segments in individual countries and regions will vary depending on factors such as national policy and procurement programs. A country·s economic growth also affects development. Not surprisingly, the markets with the fastest growth are to be found in developing industrial countries. Segments with higher-than-average growth rates are the mainline superstructure in Asia, locomotives in CIS and Eastern Europe, and metro rolling stock in Asia. Whilst rolling stock will grow strongly in Eastern Europe over the next decade, in Western Europe business will remain stable.
The existing installed base in the 41countries analyzed in detail comprises 4.1 million units of rolling stock and 1.5 million km of track ² twice to the moon and back. Upkeep ² maintaining and replacing existing systems at the end of their useful lifespan ² is, and will remain, a key factor driving the rail supply market. Services ² relating both the rolling stock and infrastructure ² account for almost half of the total market. Furthermore, around 70% of annual deliveries of rolling stock (for infrastructure even 80%) is as replacement rather than for fleet or network expansion.
Europe, NAFTA and the Asia/Pacific region are the key markets today (see picture 2). Yet this is a dynamic, ever-changing industry. Eastern Europe and the Commonwealth of Independent States (CIS) will gain importance in the coming years. Western Europe, although growing at
only 0.5% to 1% annually over the next decade, will remain the single most important rail market. NAFTA, with its impressive services market, is in second place. However, Asia is expected to show higher growth rates, thanks to rapid development in this region. Rail suppliers are companies that manufacture and service all the systems, sub- systems and components used in modern urban, conventional and high-speed systems, including rail infrastructure, rolling stock, and signal and telecommunication systems. While a handful of multinational suppliers dominate the headlines, the sector is shaped equally by the thousands of small and medium-sized suppliers and sub-suppliers.17
Picture 2: Market volume, overall rail market [EUR bn]
A Survey was conducted with a sample size of 60 students from various universities; the sample size included male and females within the age bracket of 19 to 25 years of age. The questionnaire has been attached in the Appendix for reference. When asked about the opinion of the students on what factors may act as a threat to the feasibility of bullet train in Pakistan, the below mentioned were the factors underlined by the students:
1. Infrastructure 2. Government Policies 3. Demand 4. Affordability
5. Terrorism From a total of 60 students 57% believed that infrastructure was a major threat whereas 5% said that the government policies would create hindrances. 10% believed that affordability with reference to the customer·s is going to be a major threat while 28% students believed that the current political situation with reference to terrorism would make the project unfeasible to take up in Pakistan. It is important to note that 0% out of the 60 students believed that there existed no demand for the train; all of them believed that there was a gap between the supply and demand of the travelling services provided to our population.
Why would the Bullet Train Project not be Feasible?
28% 57% 10% 0% 5% Infrastructure Government Policies Demand Affordability Terrorism
Another question was asked about whether Siemens should personally look after and supervise the bullet train project or should the government of Pakistan be given the responsibility. In answer to that 60% of the students voted for Siemens whereas 32% of them said that the government of Pakistan should be given the responsibility; it should also be noted that 8% of the students suggested that the project should be handed over to China.
Should Seimens Supervise the Bullet Train Project?
Yes No Why Not China? 8% 0% 32% 60%
To analyze the general understanding of the public towards the introduction of bullet train we asked them if according to them it was possible to take such an initiative. 5o% of the students agreed whereas 30% negated any chances of such a project being initiated in Pakistan; 20% were not sure about the possibility or impossibility of the project.
Is the Introduction of Bullet Train Feasible in Pakistan?
Yes No 0% 50% 30% May be
To analyze the importance of different national routes on which the service could possibly be introduced; another question was asked. 47% of the students would prefer to go to Lahore, 29% would like to go to Karachi, and 4% to Peshawar, 4% to Quetta and 16% would like to travel to all these routes via the train service.
Percentage of People Travelling From Rawalpindi to Different National Routes
Lahore Karachi Peshawer 16% 4% 4% 29% 47% Quetta All the above mentioned cities
We first surveyed the sample size on the fact that how many of the total number of students actually travel by train and with what frequency. 45% of them travelled rarely, 29% travelled occasionally, 16% were frequent while 10% of the students did not ever travel by a train.
Percentage of People Travelling by Train
Rarely Ocassionally 10% 16% 45% Frequently Never
preferences of these students with reference to the mode of transport while travelling on
After analyzing the percentage of people travelling by train we set out to determine the
national routes. 52% of the students preferred travelling by airplane while 20% of them wanted to travel using their personal conveyance; 21% availed the services of bus whereas only 7% would prefer to travel by train.
Mode of Transport that is Prefered on National Routes
Airplane Car Bus Train
7% 21% 52% 20%
The same survey was conducted with a sample size of 50 individuals forming the different population; the individual survey were mix of male and females in the age bracket of 30 to 55 years with a pay scale ranging from Rs. 20,000 to Rs. 70,000 According to these figures it can be predominantly analyzed that 88% of the population in this segment preferred Siemens over the government of Pakistan when it came to the supervision of the entire project. There was no individual voting for china as the project supervisor.
Should Seimens Supervise the Bullet Train Project?
Yes No Why Not China?
12% 0% 0%
The introduction of bullet train is feasible according to 38% of the population of this particular sample, interestingly 38% of them are not sure as to whether it would be possible to do so or not; 24% believe that it is not in any case possible for such a project to be initiated in Pakistan.
Is the Introduction of Bullet Train Feasible in Pakistan?
Yes No 0% 38% 24% 38% May be
62% of the people would prefer to travel to Lahore by the train, whereas only 25% of them would like to travel to Karachi via the railway service. There were 13% who opted for the route of Peshawar while none of them wished to travel to Quetta or all the cities through this service.
Percentage of People Travelling From Rawalpindi to Different National Routes
Lahore Karachi Peshawer Quetta All the above mentioned cities
13% 0% 0% 25% 62%
This trend shows that 89% of this population rarely users the services of Pakistan Railways, with 5% people travelling occasionally, 4% frequently and 2% of the people have never travelled by the train.
Percentage of People Travelling by Train
Rarely Ocassionally 5% 4% 2% Frequently Never
The mode of transport normally preferred while travelling on national routes is the airplane with percentage of 72% whereas 28% of the population prefers to travel by their personal conveyance. 0% of the people from this sample size wish to take a bus or train.
Mode of Transport that is Prefered on National Routes
Airplane Car Bus Train 0% 0% 28%
CONSUMER BEHAVIOR TOWARD HIGH SPEED TRAIN
In order to find out the degree of brand loyalty the consumers generally have toward the existing services of Pakistan Railways, we carried out another survey in which we asked our prospective consumers about which mode of transport they would prefer travelling on for the national routes. 62% of the entire population size of the first sample would prefer using the train whereas 72% population from sample 2 would use the service of the high speed train if available.
SIEMENS GENERAL STATUS IN THE MARKET
A survey was also carried out to find level of awareness and willingness of people with reference to the fact that if Siemens would be a viable option for supervising and implementing the project. This survey also gave us a good feedback, we found out that Siemens is a brand well known to a majority of buyers and their services are rated as very good if compared to that of the Chinese manufacturers by the majority of our consumers; 8% of the population from sample 1 did not want the project to be handed over to China which is a clear signal to the fact that they understand that Siemens would be n appropriate option as they provide quality services. Hence these surveys gave us a go sign to carry on with the plan.
Frequency of Visit
Type of Customer
SEGMENTATION ACCORDING TO OCCASIONS
The customers are also grouped according to different occasions when they get the idea of visiting their relatives. For example, their sales of the high speed train service would increase in summers as people with children get the only time for recreation in summers because of the summer vacations of their children. Further, people from Rawalpindi & Islamabad often visit Lahore during the Eid holidays and other important occasions.
FREQUENCY OF VISITS OF CUSTOMERS
Customers are also segmented on the basis of the frequency of their visits i.e. the first time customers, regular customers and potential customers. The high speed train service would definitely have various set of customers ranging from the everyday commuters to the occasional customers; a high percentage of potential customers would be the corporate individuals.
As the rates of the resort are high as compared to the existing hotels in Murree, except for PC Bhurban, therefore only the higher income group can afford their services, Room rates range from Rs. 4000-6000 per night. Similarly food rates are also high and for the serving of food in the customer·s room, extra 15% is charged from them.
The management of the resort is looking for sophisticated and educated customers in order to maintain the top-quality standards of environment that the resort is providing. The Service would target people who want to enjoy their journey in a peaceful & time efficient atmosphere.
TYPE OF CUSTOMERS
The customers coming to the Hotel are mainly divided into two major groups i.e. corporate and non-corporate customers. Corporate customers are those who come as delegates for conferences or recreation. And would also include the population from different working segments of our society, Non-corporate customers include students, families and anyone who can afford the ticket.
PROPOSED LOGO AND NAME:
Proposed logo and name for bullet train in Pakistan is BURAQ EXPRESS, which means a fast running horse. This is due to the localized name and religious attachment Muslims have to BURAQ.
The transport industry plays a very important role for the economy. For businesses the sector is important so that goods can be moved from one place to another. For example, the raw materials can be transported from where they are produced to the factory site where they will be converted into finished products. Indeed, some businesses such as TCS and OCS are responsible to deliver cargo and other deliverables from one customer to another at the lowest possible time so that the deliverables can be reached faster. Then there are people who need to travel for different purposes, either for business or for personal reasons. For the railway industry, and particularly for the Lahore-Islamabad route, there are various competitors that are present in the market. It is very important to analyze these competitors and what they are doing to facilitate the customers in order to come up with a better and more appreciable service. Secondly, as a high-speed train project requires a huge financial investment in the development of the infrastructure as well as the cost getting the superior technology, Siemens needs to manage these prospects affectively.
According to a World Bank report,
The transportation sector accounts for about 10.5 percent of the country¶s GDP and 27.4 percent of Gross Fixed Capital Formation (GFCF) in FY06. It provides over 6 percent of employment in the country and receives 12 to 16 percent of the annual Federal Public Sector Development Program (PSDP). Government agencies dominate the sector.18
MAJOR LOCAL COMPETITORS
Now there are two kinds of competitors that are present in the market. One is the direct competitor and the other are indirect competitors. In the transport industry the following will be the direct competitors of Siemens for specifically the Pindi-Islamabad route.
Express and Non-express Trains At present the trains are being run by Pakistan Railways under the monitoring of the Ministry of Railways. Passenger traffic accounts for about 50% of the total railway traffic. There are currently two trains that have the speed such that they are able to cover the Pindi-Lahore route in less than 4 hours. These include the following trains
y y y
Subak Raftar express: which leaves Lahore at 7.45 am and reaches at 12.30 pm Islamabad non-stop: that leaves Lahore at 7 am and reaches at 11.05am. The Margalla Express: This leaves at 6 pm and reaches at 10 pm.
It is to be noted that all these fast trains are travelling only at one time from Lahore to Rawalpindi and in turn one time from Rawalpindi to Lahore. Apart from that there are various other trains that are being used for passengers to travel from Lahore to Rawalpindi route the journey varies to 5 to 8 hours.
LAHORE JN. Train Name Train Code Khyber Mail 1
RAWALPINDI Direction Arrival Departure Arrival Departure
Tezgam Awam Express
2:10:00 PM 8:00:00 AM
2:40:00 PM 8:30:00 AM
8:20:00 PM 2:25:00 PM 2:50:00 PM
Subak Express Night Coach
Jinnah Express Sir Syed Express Nishter Express Rawalpindi Express
47 49 51 111
UP UP UP UP UP
8:35:00 PM 8:35:00 PM 8:35:00 PM 5:15:00 PM 7:10:00 AM 7:50:00 AM
1:00:00 PM 11:00:00 PM
RAWALPINDI Train Name Train Code Margala Express 110
LAHORE JN. Direction Arrival Departure Arrival Departure
Khyber Mail Tezgam Awam Express
2 8 14
DN DN DN
1:50:00 AM 8:00:00 AM
8:00:00 AM 1:45:00 PM 7:00:00 PM
8:40:00 AM 2:15:00 PM 7:30:00 PM
Subak Express Subak Express Night Coach
Jinnah Express Sir Syed Express Nishter Express Rawalpindi Express Sialkot Express
48 50 52 112
DN DN DN DN
2:30:00 PM 2:30:00 PM 2:30:00 PM 1:00:00 PM
6:35:00 PM 6:35:00 PM 6:35:00 PM 5:05:00 PM
7:05:00 PM 7:05:00 PM 7:05:00 PM
DN DN 6:40:00 PM
1:10:00 AM 4:15:00 AM
The strength of travelling by the trains is the following. Frequent trips Currently there are about 16 trains that travel from the Rawalpindi to Lahore journey. This leads to greater travel options for the customers.
Lower costs Compared to other modes of travel for Quality conscious customers, the rail travel provides comparatively lesser costs for the customers. The parlor cars are having comfortable seats. Secondly, the Chinese trains are also providing the customers with better services than before, with free lunch boxes and drinks.
Miscellaneous Another advantage specially associated with this type of travel is the washroom facility available on the train. This aspect is very important for many people when choosing their travel. Especially for those mothers who have small babies to take care off and certain patients who suffer from health problems. Secondly, certain snack items and even meals can also be purchased in the train and some even offer to sell newspapers and local magazines. The view also plays a role for many people especially when they travel in the morning time as they are able to enjoy it. Trains are more efficient in fuel consumption in per passenger per kilometer travel than in fuel consumption Well established high speed rail systems in use today are more environmentally friendly than air or road travel. This is due the following factors y y y lower energy consumption per passenger kilometer reduced land usage for a given capacity compared to motorways displaced usage from more environmentally damaging modes of transport
Weaknesses The weakness that is associated with the system is lower quality compared to other services such as Daewoo and Air travel (although it is justified by the price) Secondly, most of the trains are taking longer time to reach to specific places about 5-6hours on average. The railway industry in Pakistan compared to China the locomotives are 1/8 times productive
percent of passenger traffic and 5 percent of freight.
and 1/3 time to that of India .The PR has a very low and stagnant market share, carrying less than 10
According to the statistics put forward by the World Bank, road travel was currently the most frequent mode of travel being used not only for passenger travel purposes but also to transport goods from one place to another. Currently road travel in Pakistan carries about 80% of the total traffic. Due to developments in the improvement of the infrastructure there has been an increase in transport and now it is catering to almost 90% of the total passenger traffic and 96% of the Freight traffic which means that the other modes of travel have very less market share.
National Highway Authority
Like Pakistan Railways managing the railway sector, the responsibility of building highways and motorways lies with NHA. The objectives of NHA is the development, management of operations, maintenance and planning of the particular networks. Over the past NHA has been engaged in the development of the following programs19: M-1: Islamabad to Peshawar M-2: Lahore to Islamabad (155 km access-controlled motorway with 6 lanes) (367 km access-controlled motorway with 6 lanes) was completed in November 1997. M-3: Pindi Bhattian to Faisalabad (53 km access-controlled motorway with 4 Lanes. M-4: Faisalabad to Multan M-5: Multan to Dera Ghazi Khan M-6: Dera Ghazi Khan to Ratodero M-7: Kakkar to Karachi via Dureji M-8: Gwadar to Ratodero M-9: Karachi to Hyderabad M-10: Karachi Northern Bypass (200 km access-controlled motorway with 4 lanes) (65 km with 4 lanes) (450 km with 4 lanes) (303 km with 2 lanes) (1072 km with 2 lanes) (136 km with 6 lanes) (56 km with 2 lanes)
SLM: Sialkot Lahore Motorway
(100 km with 6 lanes)
NHA is managing 3% of the total entire road network and about 75% of the country·s road traffic. As our focus is on the Rawalpindi- Lahore Motorway route, we would focus our attention to the Motor Way M2. Other projects being carried out by NHA is National Highway Improvement Programme (NHIP) and National Highway Development Sector Investment Programme (NHDSIP)
LAHORE TO ISLAMABAD MOTORWAY M2
The motorway was developed in 1996. The network has basically 6 lanes and provides exits to various other cities that come between Lahore and Islamabad. The motorway was developed by Daewoo at a cost of Rs 36.7 billion. The length of the motorway is about 335 km.20
The major passenger travel service is being offered by Daewoo which is availed by the middle and upper middle class. However other players are also present in the market such as buses of Niazi, New Khan and Skyways that are being used by the lower class segments. Apart from the fuel prices that the customers pay while travelling in their own cars, the customers have to pay toll taxes when they use the motor way (Given below)
Toll Rates for Motorways21
Vehicle Type Car, Jeep, Land Cruiser/Pajero, Suzuki Van/Pick up or Equivalent Details Rs. 15/Wagons (upto 12 Seats), Pick up all types modified to carry passengers (Toyota Hilux single/ double Cabin), Milk Trucks T-3000 and equivalent. Coasters, Mini Buses (upto 24 Seats), 13-24 seats Coaster Mini Bus built on T-3500 Mazda Chassis (upto 24 seats) and Mini Truck / Tanker built on T-3500 Mazda Busses greater than 25 seats Details Rs. 40/Rigid Trucks including 2 Axle, 3 Axle Trucks Details Rs. 50/Articulated Trucks/Vehicles Details Rs. 100/Details Rs. 25/Details Rs. 25/-
SAMMI DAEWOO BUS SERVIVE
The most popular transport service provider across the various destinations of Pakistan is undoubtedly provided by Daewoo. For the Lahore to Rawalpindi route there are currently travel 35 times daily, with average seating capacity of about 40 seats. The service is extremely popular for the Lahore ² Rawalpindi route mainly because of the security it offers along with the good service.
TIMINGS OF DEPARTURE
As the bus leaves on average after every half an hour it increases the convenience of the customers. Mostly the buses reach and depart at time but it depends on the traffic in the cities to which there have been instances when the journey takes about 5 hours than the scheduled time of 4.30 hours.
OTHER SERVICES FOR CUSTOMERS
The customers are offered snacks along with drinks. Furthermore, it has contracts with certain stop over points along the journey where passengers can use washrooms and get meals. Furthermore they also provide head phones and have LCDs where movies are played. Another service that they offer is for those who have to travel to Islamabad. The bus stops over and moves from the G7 sector of Islamabad and the charges are mere Rs 20.
The ticket price for the normal bus is about Rs480 for the Lahore Rawalpindi route while the recently started Royal Decker buses cost about Rs 75022. This is because of more comfortable seats and better service offered to the customers.
DRAWBACKS OF ROAD TRAVEL
Apart from the motorway which has a good infrastructure, the other networks are below standards. Trucks speed are slower when compared to those in Europe hence it means that they take longer hours to reach which inturn means that the goods take a very long time to travel from one place to another.
Secondly they are obsolete causing a lot of pollution.
This pollution also increases when people use their own cars when compared to using other modes of transport, with the increase in the number of cars travelling and lesser implementation of environmental standards there has been increased pollution. Furthermore, construction of roads due to rapid urbanization and growth in population has resulted in massive destruction of landscapes and trees.
Pakistan has currently about 36 operational airports across the country. PIA is the national carrier but other airlines are also present in the market. There are currently about more private airlines apart from PIA which are Air Blue, Shaheen Airways and Aero Asia. All the airlines are covering the Lahore to Islamabad route
SHAHEEN AIRWAYS AND AIRBLUE
These two airlines are present in the industry but none is offering their service from Lahore to Islamabad route. Hence, it is only PIA that is travelling on this route which in turn means limited option for the customers to reach on time. This is a very interesting fact that we came across with. For time conscious customers the airline industry is offering limited services and that too it is very expensive.
It is currently the only available airline that is catering to the Rawalpindi-Lahore route. It Travels on the Lahore Islamabad route about 5 times daily, the ticket price is about Rs 7500 but it is subject to change. The flight time is about 50 min.
There is still a major potential in Pakistan for the air travel industry and according to we sources the CAA should encourage commercialization and increase competition within the industry. The major drawback compared to other modes of transport is that air travel is extremely expensive. The tickets for the Islamabad Karachi route is similar to that of Karachi Dubai
Since road travel accounts for the maximum portion of traffic and hence even earnings, there is considerable need to develop further the infrastructure to develop the passenger traffic. Recent programs undertaken by authorities like NHA and NASPAC has resulted in tremendous improvement in the road travelling sector. The major threat that will be present for the bullet train is the competition from Daewoo. As mentioned earlier, there is increased customer reliance on the services of Daewoo in road travel. There are other buses two private and local that travel on the route and competition exists for those customers who are not price sensitive and like mentioned earlier this is not our target market. In air travel, competition exists from the only airline that travels in the Lahore-Islamabad route and that is PIA. As the price of the tickets are extremely high and the time also comparable to that will be provided by the Bullet train, it is going to be advantageous as well. Coming towards the direct competitors, the Pakistan Railways although providing frequent travel options throughout the day and improved services in the future can be a threat for the Bullet train service. Still it is incomparable in terms of the time that it takes to travel the distance.
When compared to air travel rail schedule fewer weather disruptions, and at times the time can also become comparable. This is because, for air travel you need to be at the airport at least an hour before the flight take off, apart from the time taken to travel. In car travel you can travel any time you want to and reach the exact destination. Rail travel has specific time and u need to take a taxi to travel from the station to the destination
Like a road is required for the car to run, proper infrastructure and planning is required for the train to run. This means that for rail travel a high amount of investment will be required and profitable returns may not be present in the short term
TIME REDUCTION THROUGH BULLET TRAIN
By reducing the time of travel it will benefit both the businesses and the passengers. For passengers, it will be possible to travel to places earliest and also at a cheaper cost than a plane. They can avail the facility to attend business meetings in other cities much more conveniently. For businesses, the freight can be delivered at a much lesser time therefore orders can be managed and cost effectiveness earned. It will in turn make the industry more competent.
Comparison of pollution caused by high-speed railways compared to road and air travel Research was carried out by that compared the emission of various pollutants in UK in 2001. The research focused on f main emissions namely PM10, HC, and NOx and SO2. It was noted that car transport has very much higher emissions of PM10, CO, HC, and NOx than either rail or air. Domestic aircraft and cars have similar emissions of SO2, though both lower than rail. Cars have similar CO2 emissions to domestic aircraft on longer flights, but lower CO2 emissions on shorter trips. Rail has significantly lower CO2 emissions than either mode. When compared with the air travel the Carbon Dioxide emission in aircrafts during landing and takeoff is the same regardless of the journey travel, hence it means more emissions in shorter journeys than longer ones. Domestic aircraft have emissions of 200-300 gCO2/passenger km compared to around 40 gCO2/passenger km for high-speed rail. On the other hand, SO2 emissions of high speed rail are greater when compared to the aircraft. Emissions of SO2 will be greater for aircrafts in shorter journeys than high-speed rail and vice-versa for longer journeys.23
SWOT ANALYSIS OF BULLET TRAIN
STRENGTHS Time Efficiency ² Our complete journey time would be approximately 1 hr 10 minutes
compared to the 5 hrs taken by any normal train.
Existing Expertise - New trains with Siemens technology rolled out in Mumbai and their
active participation in 3 key international airports being set up or modernized in India highlights the fact that Siemens has the expertise.
Consumer Preference ² According to the customer analysis conducted 88% of the first
sample wanted Siemens to supervise the project whereas 60% of the population of the second sample also voted n favor of the company; it should also be noted that 8% of the population insisted that China should not be an option considered by the government for such an extensive project. y Approximately 2.5million travel through train especially after the introduction of certain reforms by Pakistan Railways
Facilitating the Business Community by allowing the traders to send cargo in a
short span of time, this will increase the efficiency of the businesses and in turn be beneficial for the economy as a whole y y Can provide employment opportunities for the local population Travelling time is reduced
WEAKNESSES Overall cost ² The whole set up would be very expensive and with reference to Chinas
availability as an option, Pakistan could always give preference to the lowest bidder. The current challenge that Siemens had faced was because of the fact that China had recently taken Siemens market share of the Boosters.
No Existing Infrastructure ² The organization would definitely have to start from the
scratch when it comes to the infrastructure as no such project has been earlier undertaken and implemented apart from the LMTR which would reach into its completion stages by 2015 and the infrastructure developed by them would be different comparatively in addition to the fact that the service would be available only within the vicinity of Lahore
y y y y y High cost Establishment of a separate network to run the trains Expensive Unstable Political Scenario in the country Suicide attacks and killings leading to a threat to security
´They are getting bigger, better and faster than everµ Aaron Dalton Forbes Traveler, Nov 15th, 2007
y Political instability can actually render the project void; for example the bullet train project initiated during the Nawaz Sharif regime was cancelled as soon as he was taken over by another Prime minister. y The current Electricity/Gas crisis has made the life of the entire population miserable, various small and large businesses have been affected; therefore this energy crisis may threaten Siemens existing efficient work processes. y China could act as a major threat with reference to the bidding price as they would possible charge the lowest price in case the project reaches the bidding stage. y Delay in the project acceptability would bring about a substantial increase in the overall cost of the project; the current feasibility would no longer be applicable then and a new report will have to be worked upon from the scratch. For example in the 1990s in the Kalabag Dam project feasibility report, the costs calculated were doubled in the next 20 years when the project was being critically examined with reference to the implementation.
y Growing Needs of the economy of Pakistan in general and the growing transportation needs of the local population is an opportunity. The existing modes of transport are not accommodating the whole of population. y Time is an environmental factor that can be cashed upon as none of the existing services have been able to bring a balance in the time and the price of the services being provided. y First mover advantage is going to act as another significant opportunity as Siemens would be the first international brand to enter Pakistan with reference to the bullet train. y The news of privatization of Pakistan Railways has been spreading like fire; Siemens can take part in the biding process. y Due to the Open Track Policy being initiated by the government for Pakistan, Siemens can jump in for the partnership in providing these freight services in the country. y Investment to prevent the current energy crisis
COMPARISON OF TRAINS WITH OTHER MODES OF TRANSPORT
Trains are more efficient in fuel consumption in per passenger per kilometer travel than in fuel consumption Well established high speed rail systems in use today are more environmentally friendly than air or road travel. This is due the following factors
y y y Lower energy consumption per passenger kilometer reduced land usage for a given capacity compared to motorways displaced usage from more environmentally damaging modes of transport25
When compared to air travel rail schedule fewer weather disruptions, and at times the time can also become comparable. This is because, for air travel you need to be at the airport at least an hour before the flight take off, apart from the time taken to travel.
COMPARISON OF HIGH SPEED TRAINS VERSUS NORMAL TRAINS
Keeping the infrastructure costs aside high speed trains are more cost effective than normal trains because of two reasons: The staff is usually paid per hour therefore less pay would have to be given out to them. The revenue is based on the distance traveled, which would in turn increase the revenue to cost ratio because the customers will have to pay for the distance that they travel, and the reduced time would in turn mean lesser pay given out to the employees hence the revenue to cost ratio
will decrease in this regard. However, it should also be noted that the customers will be paying a higher fare hence expecting good service for which training of the staff would have to be undertaken to improve the interaction with the customers. This cost would also be in turn paid off, because revenues as the price of the ticket will be comparatively higher than when compared to normal trains out of the value that the customers get.
By reducing the time of travel it will benefit both the businesses and the passengers. For passengers, it will be possible to travel to places earliest and also at a cheaper cost than a plane. They can avail the facility to attend business meetings in other cities much more conveniently. For businesses, the freight can be delivered at a much lesser time therefore orders can be managed and cost effectiveness earned. It will in turn make the industry more competent.
In car travel you can travel any time you want to and reach the exact destination. Rail travel has specific time and u need to take a taxi to travel from the station to the destination Like a road is required for the car to run, proper infrastructure and planning is required for the train to run. This means that for rail travel a high amount of investment will be required and profitable returns may not be present in the short term.
EXISTING RAILWAY TRACK OF PAKISTAN
INVESTMENT POLICIES OF PAKISTAN:
Policies of host countries have an important influence on foreign investment decisions. Host countries can adopt policies of stimulating foreign investment or they can restrict foreign participation in their economies in various ways. Host country policies and policy pronouncements affect the perception of ´political riskµ by transnational corporations (TNCs) and thereby the amount of investment of these companies. In addition, host country policies can be instrumental in channeling investment flows toward sectors considered to be of particular importance to the country·s development. Pakistan was basically an agricultural economy upon its independence in 1947. Its industrial capacity was negligible for processing locally produced agricultural raw material. This made it imperative for succeeding governments to improve the country·s manufacturing capacity. In order to achieve this objective, however, changing types of industrial policies have been implemented in different times with a changing focus on either the private sector or the public sector. During the 1960s, government policies were aimed at encouraging the private sector while during the 1970s; the public sector was given the dominant role. In the 1980s and 1990s, the private sector was again assigned a leading role. Especially during the decade of the 1990s, Pakistan adopted liberal, market-oriented policies and declared the private sector the engine of economic growth. Moreover, Pakistan has also offered an attractive package of incentives to foreign investors. The private sector was the main vehicle for industrial investment during the 1950s and the
industries.5 It was also set that in the event of private capital not forthcoming for the
1960s and the involvement of the public sector was restricted to three out of 27 basic
development of any particular industry of national importance, the public sector might set up a limited number of standard units. By the late 1960s the economy was largely dominated by the private sector in important areas like banking, insurance, certain basic industries, and international trade in major commodities.6 The services sector was reserved for local investors. Foreign investment was not allowed in the field of banking, insurance, and commerce. On 1 January 1972, the GOP issued an Economic Reforms Order taking over the management of ten major categories of industries,7 commercial banks, development financial institutions, and insurance companies. In 1975 there was another round of nationalization of small-sized agro processing units. The sudden shift toward nationalization of private sector industrial units shattered private investors· confidence. At the same time there was also acceleration in the direct investment by the public sector in new industries ranging from the basic manufacture of steel to the production of garments and breads. The status of the public sector as a catalyst and gap filler in the 1950s and 1960s changed to that of repository of the ´commanding heightsµ of the economy (see Government of Pakistan 1984). All foreign investment was, however, exempted from the purview of the nationalization. After the dismal performance of the industrial sector following the 1972 nationalization, a change occurred in September 1978 in the government·s approach toward the role of the public and private sectors. The role of the public sector was restricted to consolidating existing enterprises, and further investment in this sector was strictly restricted. The role of the public sector was elaborated in the industrial policy statement enunciated in June 1984. The statement reiterated that the government would continue to pursue a pattern of a mixed
admitted that the public sector had established its managerial and entrepreneurial foundations
economy, with the private and public sector reinforcing each other. At the same time it
and was in a position to chart its future course to create a supportive relationship between the public and private sectors. Industries like steel, fertilizer, cement, petroleum refining and petrochemicals, and automotive equipment engineering were still in the realm of the public sector. The private sector was, however, permitted to participate in these fields as these were not an exclusive preserve of the public sector anymore. The industrial policy statement of 1984 not only accorded equal importance to the public and private sectors but also encouraged the private sector to come forward. However, the process of privatization was not initiated. Had this been initiated, Pakistan might have attracted a considerable amount of foreign direct investment in subsequent periods. The public sector retained its role in major industrial areas, which obviously discouraged the inflows of FDI. The procedure for obtaining permission to set up an industry was somewhat restrictive. The government sanction for some categories of investment was considered essential to ensure that the major projects of national significance or in need of government·s pricing policy and other support measures were established with government knowledge and involvement. The government·s sanction was required for setting up projects in the following categories:
(i) Industries specified for reasons of overcapacity; price regulation; and implementation of a
program of assembly-cum-manufacture, requiring indigenous manufacture of components or projects of major national importance or for religion, security, or socioeconomic objectives (ii) Projects involving foreign private investment (iii) Large projects costing PRs 300 million and above (iv) Projects requiring cash foreign exchange of more than PRs 50 million equivalents for plant
(v) Projects involving the import of secondhand machinery (vi) Projects in which more than 60% of the raw material was importable, provided the value of each import exceeded 20% of the total investment in fixed assets The industries included in the above categories required the clearance of the Central Investment Promotion Committee (CIPC) and the approval of the Federal Government. The above-mentioned restrictions and the need to obtain permission for setting up an industry in these areas where applicable to both local and foreign investors. In addition to this, all project proposals involving foreign investment required government approval and were required to be filed in the first instance with the Investment Promotion Bureau (IPB). Foreign private investment was encouraged in the form of joint equity participation with local investors and in the areas where advanced technology, managerial and technical skills, and marketing expertise were involved. Adequate legal framework for foreign investment was provided through the Foreign Private Investment (Promotion and Protection) Act 1976. This Act provided for security against expropriation and adequate compensation for acquisition. The Act also guaranteed the remittance of profit and capital, remittance of appreciation of capital investment, and relief from double taxation for countries with which Pakistan had agreement on avoidance of double taxation. Foreign investment was also encouraged in industrial projects involving advanced technology and heavy capital outlay like engineering, basic chemicals, petrochemicals, electronics, and other capital goods industries. In order to encourage foreign direct investment in export-oriented industries, an Export Processing Zone (EPZ) was set up in Karachi. Apart from foreign investors, overseas Pakistanis were also encouraged to invest in industrial projects in the EPZ on a nonrepatriable investment basis. The concessions and facilities offered by the EPZ included duty-free imports and exports
of goods and tax exemptions. Overseas Pakistanis were exempted from disclosing the origin of the funds for investment and were allowed to bring secondhand machinery without any surveyor certificate. Despite these incentives, the highly regulated nature of Pakistan·s economy proved a deterrent to the inflows of FDI. Specifically, FDI was discouraged by:
(i) significant public ownership, strict industrial licensing, and price controls by the GOP;
(ii) the inefficient financial sector with mostly public ownership, directed credits, and segmented markets; and (iii) a noncompetitive and distorting trade regime with import licensing, bans, and high tariffs. Pakistan began to implement a more liberal foreign investment policy as part of its overall economic reform program toward the end of the 1980s. Accordingly, a new industrial policy package was introduced in 1989 based on the recognition of the primacy of the private sector. A number of policy and regulatory measures were taken to improve the business environment in general and attract FDI in particular. A Board of Investment (BOI), attached to the Prime Minister's Secretariat, was set up to help generate opportunities for FDI and provide investment services. A ´one-window facilityµ was established to overcome difficulties in setting up new industries. The basic rules on foreign investment as stated above were laid down in the Foreign Private Investment (Promotion and Protection) Act 1976. Originally, each foreign investment was subject to separate authorization, but this requirement was eliminated in May 1991. In general, no special registration was required for FDI, and the same rules and regulations were
investment was removed with the exception of a few industries such as arms and ammunition,
applied to FDI as to domestic investors. The requirement for government approval of foreign
security printing, currency and mint, high explosives, radioactive substances, and alcoholic beverages (in fact, these industries were also closed to domestic private investors). In all industrial sectors other than those indicated above, not only foreign equity participation of up to 100% was allowed but also, foreign investors can purchase equity in existing industrial companies on a repatriable basis. In nonindustrial sectors, foreign investment was excluded from agricultural land; forestry; irrigation; and real estate including land, housing, and commercial activities. All investors, whether domestic or foreign, were required to obtain a No Objection Certificate (NOC) from the relevant provincial government for location of their projects. Thus, the physical location of the investment was effectively controlled by the provincial governments, which was considered a major bottleneck in speedy industrialization. At present, an NOC is only required for foreign investment in areas that are in the negative list of the relevant provincial government. There are only a small number of areas that are on the negative list of the provincial governments. In the past, investors (domestic and foreign) were not free to negotiate the terms and conditions of payment of royalty and technical fees suited to the requirements of foreign collaborators for technology transfer. The government, therefore, streamlined the procedures and investors are now free to negotiate the terms of conditions suited to them as well as acceptable to multinationals wishing to transfer the requisite technology. One of the most important measures taken recently by the government affecting FDI has been the liberalization of the foreign exchange regime. Residents and nonresident Pakistanis and foreigners are now allowed to bring in, possess, and take out foreign currency, and to open accounts and hold certificates on foreign currency. Foreigners using foreign exchange have now access to the capital market. For example, no permission is required to issue shares of Pakistani companies to foreign investors, unless they belong to industries included in the Specified List. To further
liberalize the foreign exchange regime, the Pakistani rupee has been made convertible effective 1 July 1994. The ceiling earlier imposed on contracting foreign loans has been abolished. Permission of the Federal Government or the SBP would not be required regarding interest rate or payment period of foreign loans not guaranteed by the Government of Pakistan. Foreign currency account holders are now also allowed to obtain rupee loans collateralized against the foreign currency account balance. The government has also enacted an extensive set of investment incentives including credit facilities, fiscal incentives, and visa policy. Foreign-controlled manufacturing companies exporting 50% or more of their production can now borrow working capital without any limit. Other foreign-controlled manufacturing companies including those not exporting and selling in the domestic market can borrow rupee loans equal to their equity without prior permission of the SBP. Prior permission of SBP is also not required for raising domestic credit to meet fixed investment requirement. A number of fiscal incentives include a three-year tax holiday to all industries throughout Pakistan set up between 1 December 1990 and 30 June 1995. Investments in delineated rural areas, industrial zones, and less developed areas enjoy five and eight years tax holiday respectively, together with special custom duty and sales tax concessions. The import policy has also been liberalized considerably, and the maximum tariff rate has been reduced from 225% in 1986/1987 to 45% in 1996/1997. A large number of quantitative restrictions and nontariff barriers have been removed, and the negative and prohibited lists of imports have also been reduced (see BOI 1995b).11 Export incentives have also been broadened. The highly cumbersome duty-drawback system is being replaced with a scheme whereby 80% of the
paid within one week after inquiry. The visa policy of Pakistan has been modified to make it
duty-drawback is paid automatically within three days to the firm, and the remaining 20% is
attractive to foreign investors. Foreign investors with substantial investment are granted 3 years multiple entry visa. There is no restriction/requirement for work permit for foreign managerial and technical personnel for gainful employment/occupation in private firms in Pakistan. Special industrial zones (SIZs) have been set up to attract foreign investment in export-oriented industries. Apart from foreign investors, Pakistanis working abroad are also eligible to invest in SIZs. The government is responsible for providing the necessary infrastructure and utility services in the SIZs. Investment in SIZs is exempted from existing labor laws of the country. Hefty fiscal incentives are given to foreign investors in the SIZs, which include income tax holiday for a period of 10 years provided the plant commences commercial operation as of 30 June 1999; duty-free imports of plant and machinery not manufactured locally; and tax exemption on capital gains, to the extent of the foreign equity share, for a period of five years from the inception of the venture.
Foreign investment in Pakistan is protected through the Constitution (Article 24) as well as through specific laws. Section 8 of the Protection of Economic
Reforms Act 1992 provides legal cover to foreign investment in Pakistan. Beside these statutory protections, the Multilateral Investment Guarantee Agency (MIGA) provides a means of obtaining insurance cover against noncommercial risks. Pakistan is a top beneficiary of the MIGA investment cover. MIGA has provided Pakistan with 9.4% of its investment insurance facilities, the highest among other developing countries. In November 1997, the government issued the New Investment Policy which includes major policy initiatives. In the past, foreign investment was restricted to the manufacturing sector. Now foreign investment is allowed in sectors like agriculture and services, which constitute above three fourths of gross national
the fields of industrial base expansion, infrastructure and software development, electronics,
product. The main objective of the new policy is to enhance the level of foreign investment in
engineering, agro-food, value-added textile, tourism, and construction industries. Foreign investment on a repatriable basis is now also allowed in agriculture, services, infrastructure, and social sectors, subject to these conditions:
(i) The basis is joint venture (60:40);
(ii) foreign equity will be at least $1 million; (iii) Foreign companies registered in Pakistan will be allowed to invest; and (iv) For social sector and infrastructure projects, joint venture is waived (100% foreign equity may be allowed).
The manufacturing sector has also been prioritized into four categories:
(i) Value-added or export industries;
(ii) Hi-tech industries; (iii) Priority industries; and (iv) agro-based industries. The tariff on imported plant, machinery, and equipment (PME) that are not manufactured locally for categories (i), (ii), and agriculture is zero while that for categories (iii), (iv), and social services will be charged 10%. First year allowance of cost of PME would be available at 90% for (i) and (ii), at 75% for categories (iii) and (iv), and at 50% for other industries. Reinvestment allowance for expansion would be allowed at 50% of cost of PME.
investors, Pakistan still faces serious problems as far as implementation of foreign investment
Notwithstanding significant deregulation and various incentives/concessions given to foreign
policies are concerned. There is a strong perception among foreign investors that the pro-business policies and inducement used to attract prospective new investors are somehow weak given realities when they actually begin to set up and operate their business in Pakistan.
The success of FDI policies can be judged by the size of the inflows of capital. Pakistan has been making efforts to attract FDI and such efforts have been intensified with the advent of deregulation, privatization, and liberalization policies initiated at the end of the 1980s. The amount of foreign investment rose from a tiny $10.7 million in 1976/1977 to $1296 million in 1995/1996, thus growing at the annual compound growth rate of 25.7 percent. However, it declined to $950 million in 1996/1997. With the beginning of the overall liberalization program (1991/1992 onwards) the inflow of foreign investment grew at the compound growth rate of 15.2 percent. Investment inflows in 1995/1996 increased by 93.3% mainly due to the inflow of investment in power sector. Although significant by absolute terms, the increase appears trivial when compared to the relatively more buoyant economies of East and Southeast Asia. While FDI flows to all developing countries reached $150 billion in 1997, East and Southeast Asia received the bulk of this share. Total foreign investment consists of direct and portfolio investment. Prior to 1991/ 1992, portfolio investment has not only been low but also exhibited a fluctuating trend. However, with the beginning of liberalization policies in 1991/1992, portfolio investment crossed the $1.0 billion mark in 1994/1995. This impressive increase does not reflect the true
the $862.2 million sale of Pakistan Telecommunications Corporation (PTC) vouchers, which
picture of the trends in portfolio investment witnessed during the post-liberalization period. If
was a one-time phenomenon, was excluded, the portfolio investment not only declined to $227.8 million in 1994/1995 but followed an average trend of $215.4 million during 1991/ 1992 to 1995/1996 as against an average flows of only $9.0 million prior to reform (1984/ 1985 to 1990/1991). Foreign participation appears to be the major factor responsible for the increase in portfolio investment in the 1990s. The decline in international interest rates was also important in portfolio allocations toward Pakistani assets. With globalization, numerous international portfolio funds were created that were invested in emerging capital markets seeking for better returns. Pakistan was among the first countries in emerging markets to take measures to open up its stock markets to foreign investors. However, in relation to the total flows directed to developing countries, interest in Pakistan has been very modest. Portfolio inflows, because of their inherently volatile nature, have proved to be reversible more than other forms in developing countries. Their potential volatility is great in Pakistan as well since portfolio investment in Pakistan is directed mainly toward short-term and some medium-term public debt instruments and the stock exchanges.
GOVERNMENT S ECONOMIC POLICIES:
Pakistan·s track record in maintaining consistent economic policies has been poor. The abrupt changes in policies with a change in government as well as a change in policy within the tenure of a government have been quite common. Pressures to raise revenues (for fiscal consideration), and other conflicting objectives have generally led to inconsistencies in investment and industrialization policies, and an ad hoc and changing incentive system. Revenue measures are not in harmony with the industrial policies.
Pakistan·s GDP growth rate has consistently averaged 6 percent plus during the last four years reaching 8.4 percent in the last fiscal year, per capita incomes have shot up to almost US$850, the incidence of poverty has declined from 34 percent to 25 percent, unemployment rate has gone down to 6.2 percent and the size of the economy has doubled to $130 billion. Large scale manufacturing has grown in double digits and the cumulative private sector credit by banking system in last three years was more than $15 billion compared to less than $10 billion in the previous ten years. These facts, when revealed, come either as shock, surprise or disbelief to most observers. On the external front, Pakistan successfully entered international capital markets in early 2004 and has received enthusiastic response every year since then. Every single sovereign bond issue was oversubscribed several times and the pricing was better than that of investment grade countries. This was a country on the verge of default in May 1998 and had been put in selective default category by S&P and Moody·s. Today Pakistan·s international credit rating is Ba2 ² only three notches below investment grade. In 2006 Pakistan was able to raise more
than $1 billion in 30 year and 10 year sovereign bonds in the U.S. market at fine pricing and these bonds were heavily oversubscribed. Trade ² GDP ratio has reached 38 percent ² one of the highest in South Asia region. Exports have doubled in U.S. dollar terms in last four years attaining a level of $18 billion this year. FDI flows have been rising every year and amounted to more than $3 billion or 2.3 percent of GDP ² the highest in South Asia. Private capital flows in form of workers· remittances and other current transfers are touching $9 billion annually. External debt and liabilities as ratio of GDP has declined from almost 52 percent to 28 percent and as a percentage of foreign exchange earnings down to 125 percent from almost 300 percent six years ago. The myth that Pakistan is highly dependent upon official foreign assistance and particularly that from U.S. can be gauged from the fact that less than 9 percent of country·s foreign exchange income is derived from official aid. ODA per capita is only $8 or 1% of Gross National income. Forex reserves have risen from $1 billion in 1999-2000 to $13 billion in May 2006 representing about 6 months of imports. Of course, this exceptional economic performance in a short period of six and a half years has given rise to some new challenges. Inflation which was subdued at 4 percent or less in the first four years of economic recovery has accelerated to 8 percent this year. Current account which was surplus for the last three years has turned into a deficit of almost 4 percent of GDP due to oil price shock and almost 50 percent increase in imports of machinery and equipment. Income in-equalities have begun to surface as the upper income and middle income groups have benefited disproportionately from the consumer boom in autos, consumer electronics, real estate and stock market. Just to give you one indicator-the domestic production of
another 50,000 cars are being imported.
automobiles has jumped from 30,000 in 1999-00 to 200,000 cars this year. In addition
The privatization process was initiated in 1991 under the Nawaz Sharif Government, continued under the Benazir Government, and further intensified under the Musharraf Government. Thus, there is a wide political consensus and support for privatization because of an underlying philosophy that the Government should not be in the business of running businesses but regulating the markets and laying down policies. Pakistan·s record on privatization has been impressive and this has helped in stopping the hemorrhaging of public finances and easing the pressures on fiscal deficit. Pakistan·s proceeds from privatization of banks, telecom, steel and other public enterprises were about $3 billion in the last few years. Financial sector reforms in Pakistan were also initiated early in the 1990s when new banking licenses were granted to private domestic banks to set up their shops along with the nationalized commercial banks and foreign banks. Although these reforms were implemented with fits and start, they were accelerated in 1997 when the Nawaz Sharif Government brought in professional managers and boards of directors consisting of reputable persons from the private sector to manage and oversee the nationalized commercial banks. The Central Bank was granted autonomy and the control of the Ministry of Finance over banking institutions was diluted. Excess labor was shed off through voluntary golden hand shake schemes and unprofitable branches were closed down. Further reforms were undertaken since 1999 when net non-performing loans of the banking system were brought down to less than 3 percent of total advances and loans, minimum Capital requirements were raised to $100 million, the quality of new loans was improved, mergers and consolidation of financial institutions eliminated a number of weaker players and the range of products and services offered by the banks was widened. But the most crucial policy action taken by the Government, in my view, was the privatization of Habib Bank, United Bank, and Allied Bank ² three large nationalized commercial banks of the country. As a result of these reforms, the share of the private sector
ownership of the banking assets has risen to 80 percent. The banks are highly profitable and the average lending rates had declined to as low as 5 percent as automation, on-line banking and multiple channels of delivery improved the efficiency of services and a healthy competitive environment set in. Agriculture credit, SME financing, consumer loans and microcredit have become mainstream products of the banking industry and the borrower base of the banking system has multiplied from 1 million to 4 million households. The middle and lower middle class which had been completely shut off from access to banking services are now enjoying car loans, mortgages, credit cards, consumer durables. Small farmers are using bank credit for buying chemical fertilizers, certified seeds, insecticides and weedicides, small implements and hiring tractor services. Small and medium entrepreneurs are expanding their fabrication and manufacturing capacities and upgrading technology. Landless labor and poor women in the rural areas are receiving loans for poultry, small livestock, sewing machines, etc. The main beneficiaries of these reforms are the customers of financial services although it must be recognized that market determined deposit rates have also declined significantly. But as the lending rates are surging upwards, deposit rates are also going to depict an upward movement.
Trade liberalization has been undertaken in Pakistan for the last 15 years and the
maximum tariff rate which was as high as 250-300 percent has been brought down to 25 percent while the average tariff rate is about 9 percent. Non-tariff barriers and para tariffs have been eliminated and the culture of providing selective concessions, exemptions and privileges to individual firms has given way to an across-the-board uniform rules and
regulations. Protection to domestic industry is no longer a policy objective as in the globalized world efficiency can improve only under a competitive environment. The breaking down of these artificial barriers has led to significant productivity gains and manufactured exports now account for 90 percent of the total exports. Imports of all kinds of goods ² capital, consumer, raw materials ² are freely allowed into the country at negligible import duty rates. Foreign investment regime in Pakistan is also highly open and liberal. There are no restrictions or ceilings or prior approvals required for foreign investors to set up their business in Pakistan for any sector of the economy ² agriculture, real estate, retail trade, manufacturing, services, banking, insurance and other financial services. As long as they bring in their initial foreign investment and register it with the Central Bank, the foreign investors are free to repatriate their profits, dividends, royalties, technical fees, debt servicing, etc. through their bankers without any prior approval. Foreign companies are allowed to raise funds from domestic sources, including bank loans, without any restrictions. They are treated equally with national firms in all respect and can bring in and out expatriate staff to run their businesses.
DEREGULATION of oil and gas, telecommunication and civil aviation sectors have also
brought about significant positive results. Oil and gas exploration activity has stepped up in recent years and constant discovery and production from new gas fields operated by private sector companies have added new capacity to meet the growing energy needs of the country. Independent power producers ² both domestic and foreign private companies ² have played a critical role in filling in electricity generation requirements of Pakistan.
licenses to operate cellular phones. One million new cellular phone connections are being
Telecommunication has witnessed a boom since the private sector companies were allowed
added every month and the number of phones has already reached about 27 million or a penetration rate of almost 20 percent. Long distance international and local loop monopoly of Pakistan Telecommunications Corporation has been broken and new licenses including for wireless local loop have been issued. The customers are reaping rich dividends as the prices of phone calls ² local, long distance, international ² are currently only a fraction of the previous rates. One of the advantages of privatization of the state monopoly, i.e., the PTCL would be felt in form of higher bandwidth penetration that has lagged behind other Asian countries. Since the government recently announced the policy of allowing the private operators to fly on international routes, there has been a big uptake in the aviation business. Domestic airfares have been cut by PIA which had almost a monopoly and seat load factor has reached an all time high. PIA and the private airlines are all scrambling for new planes to meet the pent up demand for air travel. The cornerstone of the governance agenda is the devolution plan which transfers powers and responsibilities, including those related to social services from the federal and provincial governments to local levels. This plan was put into effect in 2001. The main premise of the devolution plan is the belief that development effort at the local level should be driven by priorities set by elected local representatives, as opposed to bureaucrats sitting in provincial and federal capitals. Devolution of power will thus strengthen governance by increasing decentralization, transparency, accountability of administrative operations, and people·s participation in their local affairs. However, in the meanwhile the transition has created its own set of dislocations and disruptions in the delivery of services that need to be addressed.
Other essential ingredients for improving economic governance are the separation of policy and regulatory functions, which were earlier combined within the ministry. Regulatory agencies have been set up for economic activities such as banking, finance, aviation, telecommunications, power, oil, gas etc. The regulatory structures are now independent of the ministry and enjoy judicial powers. The Chairman and Board members enjoy security of tenure and cannot be arbitrarily removed. They are not answerable to any executive authority and hold public hearings and consultations with stakeholders.
THE NATIONAL ACCOUNTABILITY BUREAU (NAB) has been functioning quite
effectively for the last five years as the main anti-corruption agency. A large number of high government officials, politicians and businessmen have been sentenced to prison, subjected to heavy fines and disqualified from holding public office for twenty-one years on charges of corruption after conviction in the courts of law. Major loan and tax defaulters were also investigated, prosecuted and forced to repay their overdue loans and taxes. Civil service reforms aimed at improving recruitment, training, performance management, career progression, right sizing of ministries and attached departments, and improving compensation for government employees are part of the second generation reforms of the government for building strong institutions in the country. In order to depoliticize recruitment, promotions and career development, the independence and responsibilities of the Federal Public Service Commission (FPSC) have been enhanced and is now fully in charge of merit based recruitment and promotions. The Civil Service Act has been amended to reflect performance based career progression and would enable the government to retire civil servants who are inefficient and/or corrupt. The public sector educational training
infrastructure is also being restructured to strengthen skill based training of civil servants at all levels. The reforms in some of the most important federal institutions - the Central Board of Revenue (CBR), Securities and Exchange Commission (SECP), the State Bank of Pakistan (SBP) and Pakistan Railways - initiated some years ago - are already beginning to take some hold and making a difference as far as governance is concerned. Reforms in access to justice will deal with delays in the provision of justice, case management, automation, and court formation systems. In addition, human resources, management information systems and the infrastructure supporting judicial system are being revamped and upgraded. Small Causes Courts have been established to provide relief to the poor who have small claims. Despite these reforms, Pakistan is facing many difficult challenges and will continue to face new unforeseen challenges. There is no room for complacency. One fourth of the population still lives below the poverty line. Human Development Indicators remain low as almost half of the population is illiterate, infant and maternal mortality rates are high, access to quality education and health care particularly by the poor is limited, income and regional inequalities are widespread, infrastructure shortages and deficiencies persist, skill shortages are taking a toll in the economy·s productivity while at the same time, there is high unemployment and underemployment. Most worrying to me is that Pakistan·s image abroad is quite negative. Foreigners are reluctant to visit Pakistan as they perceive the country to be a dangerous place. The worldwide preoccupation with the large economies of China and India and the everincreasing quest to enter these markets is also working to the disadvantage of countries such as Pakistan.
The 'informal economy' refers to modes of production and enterprises that range from smallscale production units, home-based work in production chains, and self-run micro-enterprises to bare- minimum economic survival activities such as street vending, rag-picking and domestic work. These activities remain 'informal' because workers/operators cannot comply with the established rules and regulations of the formal sector that they find prohibitive and costly. By virtue of being part of the ´Informalµ economies, a vast majority of workers are excluded from legal and social protection and from the scope of labor laws. 13 Of the total labor force in Pakistan, 65.8 per cent are employed in the informal sector compared to 34.2 per cent in the formal sector14. Of these, 57 per cent are employees and unpaid family helpers, while 42.2 per cent are selfemployed15 in the informal sector. The majority of the employees in the informal sector are piece-rate, home based women workers who get extremely low wages and work under restrictive physical and social environs of their 16 poor habitats, or at small hazardous work units. Most of the workers are not aware of constitutional and international human and labor laws and covenants. The in formalization of economy presents perhaps the biggest challenge to sustainable development. On one hand, it is vibrant sector of the economy, labor-intensive and responsive to new needs and opportunities. On the other hand, it is largely un-documented, which distorts both official statistics and existing analyses of the economy's performance. More importantly, it escapes the government's regulatory network. Labor in the informal sector is not governed by the various labor laws or regulations on working conditions. This means that workers have no paid holidays, no job security, no medical cover, no pension or provident fund, no limit on the hours worked and no overtime pay.
STATE OF LABOR UNIONS:
The prevalent view in some quarters that trade unions are formed to undertake strikes is based on ignorance of law as well as facts. The positive role of trade unions in industrial relations has not been realized and reflected. Unions are meant to be democratic institutions working for the betterment of workers and indirectly for society as a whole. Trade unions are legal entities. The Constitution of Pakistan, ILO Conventions and UN Declarations all allow workers the right to form their associations and unions. It is clear that a number of important issues confront the trade union movement; foremost among these is the structure of economic activity in the country. The fact that the informal sector extends well beyond family has an impact on the national economy. There is a trend among employers to redirect as much work as possible to subcontractors and daily wage earners. This both limits the application of existing legal welfare provisions and makes it difficult to register unions, as non-permanent workers can simply be disowned by the employer. This leads to a dichotomy in the labor force. Within the existing formal sector, unions have a certain degree of collective bargaining power and have been able to protect the wages and conditions of workers. Permanent workers also have a large degree of job security. Many traditional labor problems exist outside the formal sector. The use of child labor is common in the informal sector 18(The actual total number of working children in Pakistan is probably 19 somewhere between 2 and 19 million), working conditions are virtually non-regulated and terms of employment are generally oppressive. Union activity on the whole is remote from the realities facing the overwhelming majority of the labor force. If unions are to serve their purpose of defending the interests of the working class as a whole, they need to find ways of addressing the needs of workers in the informal sector.
CURRENT LABOR POLICY:
According to the latest labor policy, unveiled in 2002, the right of association was not extended to agriculture and informal workers, which comprise about 90 per cent of the work force. One of the recommendations of Pakistan Tripartite Labor Conference (PTLC), last convened in 2001, was extension of the coverage of labor laws to informal sector and homebased workers, but the new labor policy failed to do that. The policy aims to regularize the contract system, following that, the number of workers employed on non-permanent basis will increase. The right to minimum wages, which is a core labor right, remains highly restricted. According to the minimum wage policy of 2001, the minimum wage is determined by the number of hours spent on a job. There is no way of ensuring that home based workers are getting minimum wages working the same number of hours.
IMPACT OF GLOBAL TRADE:
Global trade and investment patterns are having a dramatic impact on employment relations and work arrangements around the world. The current state of privatization, foreign investment and the development of Free Trade Zones unrestrained by labor laws do not add up to an environment conducive for workers. Workers retrenched by privatization move into the informal economy when public enterprises are closed or the public sector is downsized. More and more people are also joining the informal economy to supplement formal sector incomes with informal earnings in response to inflation or cutbacks in public services. Another repercussion of globalization is that capital-intensive growth or what some observers call ´jobless growthµ is being pursued by both public and private sector. Furthermore,, ´high techµ growth, tends to create more high-skill service sector jobs than lower-skill manufacturing jobs. In such contexts, those without the skills to compete for high-tech formal jobs find work or continue to work in the informal economy. There may be differences on the precise measurement of poverty but it is widely believed that the incidence of poverty in Pakistan has increased during the decade of 1990s. According to some studies, the caloric-based poverty has in fact doubled from 17.4% in 1987-88 to 32.6% in 1998-99 21. During the period of 1995 - 2000, economic growth rate declined from the historical level of 6 per cent to 4 per cent and with population growth rate of almost 2.5 per cent and more, the increase in per capita incomes was insignificant. The poor performance on economic growth was accompanied by rising income inequality and high open unemployment rates. Although the growth rate has improved in the past 5 years (6.4 percent in 2003-4 and 8.4 percent in 2004-5), overall unemployment has gone up. According to the Pakistan
Economic Survey of 2003-4, unemployment rate averaged at 5.7 per cent over 19952000, and in 2004, it was 8.3 percent.
The project feasibility would definitely depend upon the existing projects which are currently being taken up by the government of Pakistan. An example would be The LRMT is a Twophase, 97 kilometers long project. A Hong Kong based company called MVA Asia Consultancy was hired the government of Punjab as consultants to prepare the project feasibility. The study of MVA Asia Consultancy completed 5% of project design and proposed four Rail lines in the city to share the traffic burden. The proposed capacity of LRMT is going to be able to move 35000 passengers per hour in the city. Funding for the project will be provided by the Asian Development Bank (ADB). But in this regard our analysis and research indicated that this project would cost around US $1.7 billion. Financial analysis further ahead indicates the cost breakup. In March 2007, Punjab Government invited Dr E. Sreedharan who is the managing director of successfully operating Delhi Metro Rail. After studying the project details Dr Sreedharan has declared Green Line Project as a viable one. In 1991 during Nawaz Sharif·s term as prime minister, the feasibility of a light rail transit system was determined by Japanese development organization (JICA). It had proposed a 13 kilometer long system. The study was reviewed and updated as part of the World Bank funded ´Lahore traffic and transport studiesµ in 1993. The system·s cost was estimated at about US $400 million, but with better network coverage. In 1995 Japan proposed financing the original scheme with grants and loans of about US $495 million, but the project could not be implemented due to many reasons.
Hence keeping in mind previous projects undertaken by government of Pakistan on similar pattern can indicate the willingness and acceptability or our proposal.
Barriers to entry
Some of the aspects had been highlighted in the trade policy of Pakistan of 2006-2007. There were major barriers that have affected the investments in Pakistan and are continuing to do so. y
Pakistan position on Global Competitiveness scale According to the trade policy of 2006-
2007 Pakistan was at 95 on global competitiveness out of a total of 125. This index measures many aspects such as availability of skilled labor, productive workforce, superior research and development etc. in 2007 however; Pakistan is not seen in the World Competitiveness Scoreboard produced by IMD. India ranks 27th on that y
Increased opportunities in neighboring countries Since there is a lot of opportunity in the
Indian and Chinese markets considering the population size and various other factors, these two countries have been important attractions in opportunities y
Political uncertainty The biggest barrier is that of political uncertainty and instability
Asia for investment
that is providing a threat to not only the foreigners but also the local community in general. The riots that took place after Benazir's death has shattered the confidence of investors. Benazir Bhutto·s assassination has cast a huge shadow on the country·s attractiveness as an investment destination, says Syed Dilawar Abbas, President Organization of Pakistani Entrepreneurs of North America (OPEN), Silicon Valley Pakistan has incurred massive trade deficits as the increase in imports in luxury items
such as imported cars, and cell phones has resulted in increased imports but it was not matched up with the exports. Economists have been deeply worried as according to some, Pakistan did have a golden opportunity to incur global investment when money was flowing in the country in the form of for example foreign direct investment but this option was not cashed upon successfully. First the emergency riots took place and later Benazir's death that decreased the confidence of the business investors. According to the Jan 1, 2008 The News edition 359 branches of different banks had been ransacked, furthermore many industries were effected such as the Bake Parlor Factory and Steel Mills in Karachi, destruction of railways etc. it was a pity that even the local property was not saved. The economic managers of Pakistan compare its economic growth with China and India but they conveniently ignore the fact that these countries have cushioned their currencies against devaluation by amassing foreign exchange reserves equivalent to over a year of their import bill. The above factor hence leads to major security concerns where nothing is termed as safe. y
Lack of productive capacity because of lesser availability of technology and investment in
plant and machinery. Because of the tax treatment offered to other type of investments such as bonds and shares, there was a transfer from industrial to non-industrial sectors.
The cost of the project would mainly include cost of the track, cost of the trains and land acquisition cost. Since our company has already done projects very similar to this current project so the cost estimates for the initial feasibility were easy to make. The estimated cost and its breakup are given as; Cost of the track Cost of the trains Total Cost $1.5 billion $0.18 billion $1.68 billion
The operational cost of the project after its beginning would be Cost of Train Drivers & staff Type Salary Cost per person Total Employees / year Train Drivers Helpers on Duty $12000 $5000 6 6 $72, 000 $30, 000 = $ 102,000 Total Cost
Finance Department / Salaries Type Salary Cost per person Total Employees / year Senior Manager Finance Asst manager finance $50000 $16000 1 3 $50000 $48000 Total Cost
Compliance officer Internal Auditor
$30000 $40000 = $168,000
Marketing Department Type Salary Cost per person Total Employees / year Senior Marketing Asst Manager Relationship Manager Manager Sales $10000 $10000 1 2 $10000 $20000 = $110,000 Marketing $12000 3 $36000 Manager $35000 1 $35000 Total Cost
HR/Admin Type Salary Cost per person Total Employees / year Country manager Company Secretary Senior Manager HR Asst Manager HR $100,000 $14000 $30000 $10000 1 1 1 2 $100,000 $14000 $30000 $20000 = $164,000 Total Cost
Technical and Maintenance (T&M) Type Salary Cost per person Total Employees / year Chief Engineer Manager Operations Asst Operations Maintenance Officer $5000 15 $75000 = $411,000 TOTAL COST = $ 955,000 Electricity cost of trains: The government of Pakistan would provide us with a 25000KV dedicated line, which would cost us around $1.5million per year. $80,000 $40,000 1 4 6 $80,000 $160,000 $96,000 Total Cost
The project is being carried out by the Government of Punjab with funding from Asian Development Bank; we believe Punjab·s Provincial Assembly needs to pass some basic regulation for providing legal cover on who is going to implement this project so as to avoid future conflicts. Otherwise if the current government changes hands the project may die too. Provincial legislature should do law making to give this project to either a subsidiary dept of provincial government OR a private company or make law for a brand new "mass transit authority" for the city.
As to funding, 60% of the project cost is borne by the ABN Amro, CitiGroup and HSBC. It is a subsidized loan, with a 10year moratorium on payments. 15% of the cost would be borne by the federal government. And 15% by the government of Punjab (partly as cash and partly as land transferred to Buraq Express Project (BEP) for building its facilities). The rest is generated by the BEP through property development (and is in fact an indirect subsidy from the Government of Punjab, since it has provided high value land to BEP for use for property development)
Pakistan Railway to be Made Corporation
The government has decided to restructure Pakistan Railways (PR) into a public sector corporation in the process of developing a commercial approach and introducing professional management and private investment. The restructuring will be part of a major reform exercise to revitalize Pakistan Railways to enable it to play its due role within the transport sector and in the economic and social development of the country, the sources said. As per the decision, Pakistan Railways Corporation will focus on core business of rail services, while the non-core business entities such as factories, schools, hospitals and marketing of land assets will be managed through subsidiary public limited companies which would function under the administrative control of the Ministry of Railways through a holding company. The manufacturing units of Pakistan Railways The Carriage Factory, Islamabad; Locomotive Factory in Risalpur; and Concrete Sleeper factories each at Sukkur, Khanewal and Kohat , It Will be transformed into separate companies under the company laws of the country. The sleeper factory at Kotri will be leased out to a private sector company. It has also been planned to lease out more factories to the private sector; however, at least one factory will remain with Pakistan Railways which will be converted into a company to regulate price and ensure required supply of sleepers. Restructuring of Pakistan Railways was initiated during 1990s for which consultants were appointed for valuation of assets and liabilities of each of
the factories. However, the government initiated a fresh restructuring process and conducted a financial study through consultants which among other things valued the assets and liabilities of the Carriage Factory Islamabad, Locomotive Factory at Risalpur and concrete sleeper factories. The reforms exercise would facilitate the government to fulfill its objective to offload railway budget from the non- core activities, and would facilitate manufacturing units to have their autonomous entities for seeking business from the private enterprises; and prepare corporate plans and feasibility for their future operations and implementation strategy. All manufacturing units will follow a policy for developing indigenous capabilities of the new companies to design, manufacture coaches, locomotives and sleepers by developing research and development activity, design centre, human and capital formation to lessen dependence on foreign manufactures and develop potential to compete in foreign markets. Iftikhar A. Khan adds: National Assembly was informed on Friday that the government had a plan to launch Mass Transit Train service between the twin cities of Rawalpindi and Islamabad. In a written reply to a question during the question hour, Federal Minister for Railways Sheikh Rashid Ahmad said Expression of Interest (EOI) along with terms of references for conducting feasibility study of the project would be advertised by his ministry after receiving no objection certificates from the Punjab government and the Capital Development Authority (CDA). Answering another question, he said the railways ministry earned over Rs11 billion through the passenger trains during year 2005-2006.He said various steps had been taken to improve
Rawalpindi, Islamabad, Lahore, Faisalabad and Karachi.
and modernize the railway service. He said home-delivery of tickets had been introduced in
He said 25 reservation offices had been computerized and 19 others would shortly be automated. Air conditioned dining cars with sitting area has been introduced. New and refurbished coaches have been introduced on passenger trains. Additional coaches are attached with trains during summer and winter vacations. He said nine new inter-city and long-lead trains had been introduced during the year 2006-07 with better facilities. He said filtration plants to provide clean drinking water to passengers had been installed at major railway stations. Last updated: 2007-06-30 http://www.pakistan.gov.pk/ministries/ContentInfo.jsp?MinID=26&cPath=326_345&Conte ntID=5755
Spain invited to bid for high speed train in Pakistan
ISLAMABAD: introduce a Pakistan high-speed will train
between Rawalpindi and Lahore during one year that is estimated to run at a speed of 250 to 300 kilometers per hour, said Sheikh Rashid Ahmed, Minister for
Railways, while talking to the Spanish Ambassador Jose Maria Robles who called on him here on Monday. He invited Spanish firms to participate in the feasibility and later on the construction of the high-speed track, the first ever adventure in South Asia. The Pakistan Railways will start metro service in eight major cities of Pakistan having population over 2 million, he said, adding the feasibility studies in Karachi, Lahore and Rawalpindi and Islamabad have been initiated and are expected to be finalized within six-months. He said Spain which has a rich experience in metro-service is encouraged to join Pakistan Railways in an independent capacity or joint ventures in metro service, Pakistan Railway was keenly interested to avail the modern technology of Spain in terms of locomotives, signal system, passenger and freight coaches and the laying of rail tracks in order to bring an overall improvement in the railway network and operations, he said. The execution of work on doubling the rail track on Khanewal-Lahore 270 kilometers section has been started, which will be completed during one year, he said, adding the completion of the project will also bring
also by passengers' dependency. Special attention is being focused on freight service, being
a revolutionary change in the culture of Pakistan Railways not by improving train timings but
major source of earning for the railways, he said. Presently, 900 freight coaches are plying on tracks and we have fixed the target of increasing the number to 1,000, while freight trains will be increased to 14 from the present ten," he added. He asked Spain to cooperate in manufacturing of locomotives, passenger and freight coaches. http://www.thepost.com.pk/Arc_CorpNews.aspx?dtlid=63091&catid=8&date=10/10/2006 &fcatid=14
Ministry allows Mobilink to install PCOs at railway stations
ISLAMABAD, Dec 15 (APP): Caretaker Minister for Railways Mansoor Tariq here on Saturday said that Pakistan Railways has allowed Mobilink to operate and install PCO facility at railway stations across the country on urgent basis. The Minister said, ´We are taking this initiative on a number of complaints received from the rail passengers during the visits to various railway stations and divisionsµ. Mansoor Tariq said that taking serious note of the absence of this necessary facility at the railway stations, Mobilink has been allowed to install PCOs immediately. He said that it was unjustified to deprive over 80 million passengers and their relatives who visit railway stations throughout the year, of this facility which makes them communicate on cheaper rates. The mobile PCOs would also be introduced in near future enabling rail passengers to be in contact with their families while traveling, he said.
Mansoor Tariq said that the government has offered partnership to private sector, as it brings investment and create job opportunities. Pakistan Railways would also engage private sector to invest in all sectors of Railways including
DAWN NEWS ² Delegation from France
KARACHI, April 11: A high-powered trade delegation from France is arriving on Wednesday to enter into negotiations with various government departments and agencies for the development and investment in the areas of desalination, sewage treatment plants and mass transit system. During its two-day stay the 25-member trade delegation from French Business Confederation will first hold high-profile meetings in Islamabad and will reach Karachi on Thursday.
The delegation, headed by Vinci Construction Chairman Philippe Ratynski, will also meet City Nazim Naimatullah Khan because French company - Sogelberg Ingenerates - which made first ever feasibility report on Karachi's Mass Transit System is also included in the delegation.
Pakistan France Business Alliance President Shabir Ahmed briefing the newsmen at French Consulate's Trade Office said that the French delegation would hold meetings with Prime Minister Shaukat Aziz, ministers, World Bank and Asian Development Bank representatives in
He said during its visit to Karachi the delegation would hold meetings FPCCI members for finding out ways and means for enhancing trade between the two countries. He disclosed that the delegation members would also hold meetings with Karachi Port and Defense Housing Authority for desalination plants. Besides, the Karachi Water and Sewerage Board (KWSB) is also expected to hold a meeting with the French team in connection with sewage treatment plants and desalination plants, he added. The French trade mission comprises heavy machinery, aviation and pharmaceutical manufacturers, heavy construction, aviation, electronics, water technology and desalination, power, transport, marine, and telecommunication. http://www.dawn.com/2005/04/12/ebr7.htm
DIRECTORATE OF PLANNING AND PRIVATIZATION
MINISTRY OF RAILWAYS ISLAMABAD Pakistan Railways has already launched modernization with rehabilitation and improvement plan both for its infrastructure and rolling stock including prime mover since 2001-2002. The ongoing schemes worth over Rs. 30 billion are progressing satisfactorily and have brought in radical improvement in the overall efficiency and performance of the system. During the current financial year the Railway Revenue generation target has been increased from Rs. 14 billion to Rs. 18 billion and it is planned to achieve zero operational deficit during the current year by effective planning and financial management on latest technique. The performance during the mid review i.e. first six month shows the operational surplus of Rs. 927 million against the target for the period. Pakistan Railways plans to achieve a stage of net profit from the year 2007 and accordingly a number of targets have been set out by the Government for Pakistan for achievement by 2007 and onward up to 2010. This target include increase in the sectional speed on Karachi ² Lalamusa main line section to 140 KMPH, dualization in the missing link of track on the main line, introduction of modern and latest version signaling system, procurement of diesel and electric locomotives as well as high capacity/ high speed freight wagon and passenger coaches beside improvement and provision of connectivity to Iran, India, upcoming Gwadar Port to Afghanistan and onward up to Turkmenistan To achieve the above targets number of developmental schemes have been proposed in the mid term plan 2005-10 which have in principally been agreed/ approved and hopefully would be
schemes are indicated hereafter:-
reflected in the approved mid term plan before the end of the financial year 2004-05. The
Pakistan Railways Developmental Plans 2005-10 (Mid Term Plan)
Estimated Cost Rs. Billion i) Up gradation and improvement of track from Khanpur to 3.50 Lalamusa ii) Dualization of Track from Khanewal to Raiwind and Shahdara to 7.00 Lalamusa. iii) Setting up of a railway yard and railway linkage from Gwadar 2.50 port to container yard. iv) Rail link from Gwadar Port to existing rail link at Ahmad wall on 12.00 Quetta Taftan section. v) vi) Up-gradation of Rohri ² Quetta ² Taftan section 15.00
Provision of Railway link on remaining portion of right bank of 6.00 Indus for connectivity upto Peshawar via Kohat
Rail link from Quetta ² Bostan ² Zhob to D.I. Khan for provision 6.00 of direct connectivity from Baluchistan to NWFP.
viii) Upgradation of Mirpur Khas ² Khokhrapar section from meter 1.8 gauge to broad gauge upto international boarder. ix) Feasibility study for provision of rail link from Rawalpindi to 0.1 Muzaffarabad AJK x) Feasibility Study for provision of rail link from Dina to Mirpur 0.05 AJK.
Procurement/ manufacture and assembling of 100 locomotives 16.0 (75 diesel and 25 electric).
Procurement/ manufacturing and assembly of 1000 freight 4.8 wagons.
xiii) Procurement/ manufacturing and assembly of 100 passenger 4.10 coaches. xiv) Electrification of Lahore ² Khanewal double line section with 5.60 rehabilitation of existing single line Lahore ² Khanewal section (285 Kms). And extension upto Samasatta (163 Kms). xv) Provision of road over bridge at Chowrangi Chowk Export 0.125 Processing Zone Karachi. (50% of the cost is to be borne by EPZ). xvi) Improvement and rehabilitation of old and obsolete signalling 15.00 system on Karachi ² Peshawar section in phases. xvii) Other minor projects. xviii) For completion of on going schemes. 1.00 23.00
Railways Ministry trying to improve train food
By Hassan Ali LAHORE: Pakistan Railways has decided to contact owners of renowned restaurants to serve food on major trains at subsidized rates and has sent a proposal in this regard to the Prime Minister·s secretariat for approval, Daily Times learnt on Friday. Pakistan Railways (PR) sources said that the ministry of railways made this decision after receiving numerous complaints from passengers about the unhygienic and substandard quality of food served on trains.
Daily Times also learnt that the federal minister for railways, Sheikh Rashid Ahmed, has already contacted some well-known restaurants and has asked them to submit proposals along with subsidized price lists of food items. Pakistan Railways Advisory and Consultancy Services (PRACS) is currently responsible for managing food services on almost all major trains. Sources said Railways authorities are not satisfied and have warned PRACS several times that if they do not improve the standard of food and service PR would award the tender to restaurants or caterers. The ministry has now proposed that PRACS will handle the catering but would get the foodstuff from elsewhere. PR also wants to get rid of the dinning car, infamous for its unhygienic conditions and substandard food, and the authorities are said to be taking steps towards this end, sources said. Railways general manager (GM) operations told Daily Times that the ministry has submitted proposals for serving better quality food not just on trains but also at major railway stations.
Joint Director PRACS Mirza Masood said PRACS has been providing ´best foodstuff and
services to the passengersµ. He said he could not understand why the ministry has submitted such proposals as PRACS is a subsidiary of PR and has been operating according to the will of railways authorities. Saturday, June 30, 2007
Minutes of the meeting on RBMTS and NAMTA
A meeting was held at the Ministry of Railways (MOR) on 7.2.2007 to discuss the proposed National Mass Transit Authority (NAMTA) and development of Rail Based Mass Transit Systems (RBMTS) for major cities of the country. The meeting was chaired by Federal Minister for Railways· besides Secretary/Chairman Railways, representatives from all the four provincial Governments, CDA, Ministries of Communications, Finance, Planning & Development, Railways and City Nazims were present? (List of participants enclosed). .The Federal Minister for Railways introduced the participants to the proposed National Mass Transit Authority. He stated that the Prime Minister had approved the establishment of NAMTA and had also approved that feasibility studies be initiated forthwith even before the establishment of NAMTA. The Secretary Railways emphasized at the outset that the objective of NAMTA was to provide a forum for facilitating the provincial governments/city governments in developing rail based mass transit system for their cities and also to act as a Regulatory Authority for such systems. The Federal Government had no intention of intruding into the sphere of urban transport which was the jurisdiction of the Provinces. However, since the development of such highly technical and costly systems involved technical assistance as well as heavy ?financing facility from donors/creditors, the Federal Government/Pakistan Railways was in a suitable position to provide support in that respect. Moreover, as a watchdog NAMTA will see that proper standards/specifications and technology are adopted not only to ensure safety but also that the projects are sustainable The Secretary Railways emphasized at the outset that the objective of NAMTA was to provide a
mass transit system for their cities and also to act as a Regulatory Authority for such systems.
forum for facilitating the provincial governments/city governments in developing rail based
The Federal Government had no intention of intruding into the sphere of urban transport which was the jurisdiction of the Provinces. However, since the development of such highly technical and costly systems involved technical assistance as well as heavy financing facility from donors/creditors, the Federal Government/Pakistan Railways was in a suitable position to provide support in that respect. Moreover, as a watchdog NAMTA will see that proper standards/specifications and technology are adopted not only to ensure safety but also that the projects are sustainable. NAMTA will leave it to the discretion of Provincial/District Governments to conduct feasibility studies, plan, execute, operate and maintains such systems but where any Province/City requests it to be handled by NAMTA, it will do so.? In order to save time it would be advisable for city/provincial Governments to get feasibility studies initiated through NAMTA as has been requested by the NWFP, Sind and Baluchistan Governments. A presentation was made by Mr. Imtiaz Ahmad, Secretary Railway Board to highlight the urgent need of developing RBMTS for the eight major cities and presented?? Various models of Metro/suburban rail transport in Bangkok, Delhi, Singapore and Kualalampur based on BOT, Public-Private Partnership and State ownership. It was pointed out that experience showed that BOT projects were not very successful while the models of public private partnership or partial State management were feasible options. Copies of the proposed draft legislation which requires considerable amendments for the establishment of NAMTA were also circulated among the participants. After the presentation, open discussion was made on the draft legislation and the role of NAMTA. The meeting was informed that since the subject of urban transport was listed neither
in the Federal legislative list nor in the concurrent list of the Constitution of 1973, whereas the subject of Railways was listed in the Federal legislative list, the matter will be taken to the CCI and its concurrence will be obtained before the proposed legislation was sent to the Cabinet for approval and then to the Parliament for enactment. The CCI is the appropriate forum where the Provinces can register their opinion. However, before going to CCI, the bill will be redrafted in the light of suggestion/views of all the stake holders. The participants were therefore, requested to send their comments on the bill within two weeks and also confirm their willingness for conducting of feasibility studies by the MOR/NAMTA for RBMTS for their cities. Nazim Peshawar stated that there was a lot of congestion in the city of Peshawar and provision of Rail Based Mass Transit System is required for the city. He desired that the feasibility study for the provision of Mass Transit System for the city be carried out by NAMTA. Nazim Quetta explained that due to rapid urbanization in the city the vehicular traffic on the road had increased manifold during the recent years and posing problems for the smooth movement of traffic. He added that a meeting for the provision of Rail Based Mass Transit System was convened by the P&D Department of Government of Baluchistan on 16th January at Quetta. Member Technical CDA stated that Expression of Interest for the provision of Rail Based Mass Transit System in the twin cities of Rawalpindi-Islamabad had already been invited. He further stated that besides Rawalpindi, Islamabad also experienced traffic congestion. Hence there was need of introducing Rail Based Mass Transit System. He stated that CDA will have no objection if the project was taken over by NAMTA but Provincial Govt. may be consulted.
Chief Engineer, Traffic Engineering Bureau, Lahore desired that standards for the construction of Rail Based Mass Transit System should be laid down by NAMTA. Consultant KCR/NAMTA explained that the specifications for the construction of Rail system, safety parameters, etc, already exist in the codes and manuals of Pakistan Railways and they will be amended/modified to meet with any changes and requirements of Rail Based Mass Transit System. Secretary Transport Punjab informed that Feasibility Study for the provision of Rapid Mass Transit System in Lahore from Ferozepur Road (Hamza Town) to Shahdara had already been completed, identifying an estimated cost of US$ 2.5 Billion for the project.? Detail design is being carried out. He further stated that since Government of Punjab has already undertaken the provision of Rail Based Mass Transit System in Lahore, there was no need of NAMTA to get involved in construction or feasibility study which should be left to District/City/Provincial Government. NAMTA should only act as umbrella/Regulator.? This view was acceded to so far as Punjab was concerned. However, the Minister and Chairman Railways stated that MOR/NAMTA will follow the road map set for itself by the Punjab Government. Nevertheless it will still act as safety Regulator. Moreover, the Provincial viewpoint will be considered in CCI.The Chair observed that the bill for the establishment of NAMTA will be presented to CCI and at that forum of way provisions in the bill. It was explained that the bill was a proposed draft and all stake holders should give their viewpoints which will be accommodated. NAMTA had no interest in getting involved in issues concerning the Provinces. The Executive Director of IPDF (Infrastructure Projects Development Facility) of the Ministry of
Finance extended assistance of IPDF which was meant to arrange finances for mega projects,
besides funding feasibility studies and transaction advice. However, before financing structural support should be in place. The following decisions were taken in the meeting: 01) The Provinces will furnish their comments / observations on the bill of NAMTA with in 15 (fifteen) days. 02) The bill for NAMTA will be amended modified to accommodate the comments of provinces and will be furnished to CCI for consideration and approval. 03) NAMTA will conduct the feasibility studies funded by Federal Government /donor agencies in the major cities of country on the advice and consent of Provincial Government(s). The meeting ended with vote of thanks to the chair. Last updated: 2007-04-25
ISLAMABAD: Pakistan Railways would engage private partnership to invest in freight operations to extract more revenues and bring efficiency in freight logistics, said caretaker Minister for Railways Mansoor Tariq. Taking to a delegation of National Logistic Cell (NLC) and a Dubai based business group, he said that NLC in joint collaboration with the Dubai based group has offered Pakistan Railways to operate their own container coaches between Karachi and Lahore in cargo operations. The Minister urged the delegation to avail the Open Track Policy initiated by Pakistan Railways where the private parties can operate their own rolling stock while paying track access charges to Railways. He also pushed the delegation for getting these container wagons manufactured at Pakistan Carriage Factory, Islamabad and Mughalpora Workshop, Lahore. This would not only save the foreign exchange but also provide financial gains to Railways which is already involved in manufacturing of such wagons at international standards, the Minister said. He said that introduction of private partnership into the freight logistics, Pakistan Railways would be able to bring efficiency and promptness in such business activities. As the economy has grown tremendously over the last decade due to consistent and business friendly policies of the government, there is dire need to expand this network of freight handling, he added. He said that despite making holistic efforts by Pakistan Railways over the last few years, it could manage to handle only four percent of the total freight business activity. The scope is tremendous and opportunities for growth are unlimited as Pakistan is becoming a business hub between Europe, Central and Middle East in the coming years, he said. This volume of business can be doubled in no time as there is great demand from the business community of Pakistan to
increase the no of fast cargo wagons from Karachi downwards, he added.
The Minister said that a number of steps have recently been taken to improve the performance of freight segment in Pakistan Railways. High capacity express container trains have been introduced, which operates daily between Karachi and Lahore.-SANA Posted on December 8, 2007 in Pak Affairs
Bullet train plan gets under way
ISLAMABAD, Feb 10: The bullet train plan of Pakistan Railways kicked off on Saturday when a consortium of three countries was awarded contract to undertake feasibility study of the project, which would make Pakistan a rail-friendly country. By initiating the feasibility study, Pakistan has thus become the first country in South Asia to take the initiative of bullet train which is very much a pioneering train with a very high speed record.
Under the agreement signed in Islamabad, ¶MR Consult· will complete the feasibility study at a total cost of Rs23.97 million, and submit it to Pakistan Railways in October this year. Politically, the month of October will be crucial when preparations for general elections and the election of the president will be on top gear. The ¶MR Consult· is composed of Austria GEO Consult; Typsa of Spain and Myco and Survey (Pvt) Ltd of Pakistan. Federal Minister for Railways Sheikh Rashid Ahmad, who was present at the signing ceremony, said the bullet train would cover the distance between Rawalpindi and Lahore in only 75 minutes.
The major elements of the feasibility study would be to work out the shortest possible distance, fare regime and timeframe to recover the investment. When the dream would become a reality, people would have a fair choice of traveling between Rawalpindi and Lahore section by train or by air but this would depend on the fare.
The present distance of 288km between Rawalpindi and Lahore will be further reduced with the realignment of the track by removing 55 curves between Sohawa and Dina. But for the bullet train, it has been proposed to lay double track to be covered on both sides with wall in city limits and fences in unpopulated areas. The bullet train could be thought of as the world·s first high speed train. Services started in 1964 with speeds at 210km/h or 131mph, the fastest trains went at the time, and many countries, including the United States still have no trains running at this speed. At the time the concept of ´high speedµ was not really established as it is now. Indeed many say it was the success of the bullet train which led to Europe taking interest in making trains go fast. Since then the trains have been going faster and faster. February 11, 2007
Some of the facts n figures
Companies from eight countries have expressed interest in laying a bullet-train track from Lahore to Rawalpindi and 51 companies have shown interest in running private trains. (US, Sweden, France, Spain, China, Belgium and Germany)
http://www.dailytimes.com.pk/default.asp?page=2006%5C11%5C08%5Cstory_8-112006_pg13_3 y As many as 300 coaches will be imported, he said, and 700 will be manufactured in Pakistan. On his visit to Ukraine, he said that a Ukraine railway team would visit Pakistan to launch joint ventures with Pakistan Railways.
ISLAMABAD, Feb 10 - Under the agreement signed in Islamabad, ¶MR Consult·
will complete the feasibility study at a total cost of Rs23.97 million, and submit it to Pakistan Railways in October this year. Politically, the month of October will be crucial when preparations for general elections and the election of the president will be on top gear. The ¶MR Consult· is composed of Austria GEO Consult; Typsa of Spain and Myco and Survey (Pvt) Ltd of Pakistan.http://www.dawn.com/2007/02/11/nat8.htm
Data from Year Book
PLANT & EQUIPMENT Route - Kilometers Track - Kilometers Locomotives Coaching Vehicles UNIT Kms. Kms No. No. 2004-2005 7,791 11,515 557 1,604 2005-2006 7,791 11,515 544
Other Coaching Vehicles Freight Wagons Railway Stations
No. No. No.
214 21,556 626
241 20,809 626
OPERATIONS Passenger, Mixed & other Coaching Trains
No Run. Train Kilometers, Passenger Mixed and other
Thousand 31,119 Coaching. Coaching Vehicle-kilometers Freight Train Run Freight Train-Kilometers Freight Wagon-Kilometres (Freight & Mixed Thousand 351,514 Trains) Other Coaching Freight Tonne-Kilometres. Thousand 518,156 Thousand 591,397 No 18,243
581,288 16,244 6,567
Volume of Traffic Passengers Carried Passengers kilometers Tonnes of Freight Carried
2005-2006 81,428 25,621,228 60,27
Thousand 78,179 Thousand 24,237,796 Thousand 6410
Tonne - Kilometers Tonne - Kilometers Freight & Coaching
Thousand 5,531,697 Combined. Freight Wagons Loaded No 320,001
FUEL CONSUMPTION Furnace Oil H.S.D. Oil Electric Energy Coal
UNIT Tonnes Tonnes KWH Tonnes
2004-2005 2,985 154,650 11,924,746 105.88
2005-2006 3,047 145,309 11,736,977 43.650
EMPLOYMENT & WAGES Persons Employed Cost Of Employees Pension Payment
2005-2006 86,096 7,646,562 3,113,637
Thousand 6,346,243 Thousand 2,944,843
FINANCIAL RESULTS Gross Earnings Total Ordinary Working Expenses Operating Ratio
2005-2006 18,043,641 15,868,276 87.93
Thousand 17,827,467 Thousand 14,158,740 Percent 79.42
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money.cnn.com/2007/12/26/news/international/bc.apfn.as.fin.japan.china.bullet.ap www.ibtimes.com/articles/20071226/report-china-mulls-japan-bullet-train.htm www.upi.com/NewsTrack/Business/2005/11/14/siemens_gets_chinese_bullet_train_co ntract/1087/ www.atimes.com/atimes/China/FE13Ad01.html ieeexplore.ieee.org/iel5/6/27450/01222045.pdf