Industry Dynamics :

The railways industry is not attractive to many of the investors. Government is not taking any interest to make some
improvements in this industry. The condition of this industry is getting worse day by day. When we talk about
Pakistan railways industy Pakistan Railway always comes into our mind with the view as the cheapest mode of
transportation but no now is willing to use this except the poor people or the organizations. But the current condition
is worse. Today almost all government corporations of Pakistan are in worst shape but Pakistan Railways is in really
bad condition and costing country huge loses every month. For more than a century the railroad was the dominant
form of land transportation in much of the world. It was, and still remains the economic backbone of a country.

It has a total of 220 passenger trains/locomotives and the department has decided to shut down 102 trains due to
financial loses. Today Pakistan Railways with Rs.334 billion liabilities is at the verge of bankruptcy because of
corruption, shortage of locomotives and losses incurred due to the running expenses. According to one report Rs 21
billion is spent on wages and pensions every month leaving the department less or nothing for maintenance of power
and rolling stocks.

Growth :
Instead of growth in this sectors only continuous losess can be seen in this industry. With the curent management
system and overall structure of railway industry we cant expect any growth from this industry. A major revival is
much needed before it goes bankcrupt. The government is not unaware of the current condition of PR. Their
ignorance extent can be known from their interest in this sector as the proposed budget says “budgetary expenditure
on railways was only Rs45.5bn compared to Rs155bn on the national highways”.Only 42% of the total tracks is
being currently used ad it is expected that this amount will fall. The remaining 58% is not bwing utlilzed and why
not its must be answered by the government.

COMPETITIVE FORCES:

Power OF Buyers:
The buyers of railway industry are scattered so their bargaining power is low. While the switching cost for the
buyers are high but they are switching because of the importance of transportation.

Power of suppliers:
The supplier of railways industry are not concentrated. They are few in numbers. The fuel supplier is PSO who has
currently stopped the supply due to deferred payment by railway industry. Due to this the trains were stopped.
According to PSO officials the railways has received over 3 million litres of diesel from March 16 to March 20. The
daily consumption of diesel is approximately 422,000 litres. So railway industry is much dependent on the selected
suppliers.
One more key supplier of this industry is the water board. Some days before they also stopped the supply to the
railway industry. Here the powers of suppliers are very high.

Power of rivals:

There are no rivals in this industry cause of monopoly of PR.

Power of new entrants:

There no threat of new entrants in this industry except it can go for privatization.

Power of Substitutes:
There is very high power of substitutes in this industry cause the substitutes are the airline industry and motorway
industry.

Competition:
As we know that the in railway industry PR has not any competitor because of their monopoly in this industry as it
is a government owned organization.

There are two main competitiors of PR

1. Motorways
2. Airline industry

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Road transport is the backbone of Pakistan's transport system. The 9,574 km long National Highway and Motorway
network - which is 3.65 percent of the total road network - carries 80 percent of Pakistan's total traffic. Over the past
ten years, road traffic – both passenger and freight - has grown significantly faster than the national economy.
Currently, it is accounting for 91 percent of national passenger traffic and 96 percent of freight.

Pakistan railway:
PR is facing losses due to mismanagement, poor maintenance and weak ticket checks that allow people to get away
with not paying for their tickets. There have also been political interventions in decision-making about which new
routes to open. Furthermore, PR is not allowed to charge a market-clearing price; fares have always been dictated by
the federal government. According to the National Disaster Management Authority, the heavy floods have caused a
loss of Rs.6.7 billion to the railway network as several hundred kilometers of lines were washed away. The railway
coaches were also the targets of angry mobs and arson attacks after Benazir Bhutto’s assassination resulting in huge
losses.

 Pakistan Railway has no Comport at all. People feel very difficulty while they are using Pakistan railway
service but they get very tied due to uncomfortable seats.
 It consume more time of their customers. The people cannot reach their destination on time. So it is the
wastage of time.
 Train is always overloaded with the bundle of people and Customer feel very difficult to take their seats.
With the rush of people, the customer’s dress gets dirty.
 There is no proper check of tickets in Trains. Most of the time the 2 persons claim of their seats because
they have same seat numbers.
 Train gets too much stops during the Journey. They have their stations at every 20 minutes. So people get
frustrated.
 The staff of Pakistan Railway is In-efficient that’s they give the tickets of same seat to the 2 customers.
 Pakistan Railway should launch some comfortable Trains because customers feel comfortable Journey
through comfortable buses and vehicle like Daewoo and Aero planes. So they capture the market of
Pakistan Railway.
 Its Shipment facility is not so good so people or businessmen prefer other substitute like buses, Aero
planes, etc
 No stations in big cities like Dera Ismail Khan Etc but buses and other transportation facilities are there.
 The earning of Pakistan Railway is always loses for the Government but on the other side buses, Aero
planes and other services are getting more and more profits.
 The expenditure of Pakistan Railway is very high as compare to revenue.
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After analyzing the current situation of PR there are many ways through which a revival can be made of PR. We
need proper implementation of the proposals.

Blue ocean creation:

We can create Blue Ocean by looking across the time.

1. As we know that PR is a government owned organization. But there is a lot of corruption in this
organization and to eradicate it, privatization is the only solution. Pakistan Railways should be partially
privatized. This is also the possible solution of problem because currently government of Pakistan has to
bear the huge losses monthly. Other benefits of privatization of Pakistan Railways include the increase in
service quality and expansion of Railways because government has nothing to invest in PR.
2. To reduce corruption employees should be give performance based remuneration.
3. To ensure the time efficiency proper online ticket system should be introduced instead of waiting in the line
for the purchase of tickets.
4. The duration of a train on station should be reduced to ensure arrival nd departure of customers in time.
Late departures should be discouraged so ensure the timely arrival and departure.
5. Over employment should be reduced. Reduced the work force by another 5000 employees through attrition
and rationalization.
6. We have to unbundle the railways infratsrture into rail tracks and management and services.
7. Pakistan Railways (PR) needs to take major steps to make freight services more competitive. The
productivity of PR’s freight services is about 1/8 of Chinese Railways, 1/3 of Indian Railways (IR), and
half of Thai Railways, a network of comparable size. In addition, PR continues to cross-subsidize
 passenger services from freight services, resulting in non-competitive freight rates over road transport. In
contrast, China rail is 2-3 times cheaper than road. As a result, the PR has a very low and stagnant market
share, carrying less than 10 percent of passenger traffic and 5 percent of freight.
8. Discounts for students, journalists and old age people will be given
9. Government should ask Chinese for help in order to make it profitable organization because China has
made wonderful progress in railway industry. As China did in several other sectors including coal and
nuclear power generation and manufacture of automobiles it has granted access to its enormous market by
insisting on the transfer of technology. It has managed to develop its railway industry to the point at which
it was able to out-compete the established systems in Europe and North America in winning the contract to
build a high speed line connecting Mecca with Medina.
10. Coal reserves should be utilized as Pakistan is rich in coal reserves. By doing so the sole dependence on oil
reserves would be avoided. Thar coal reserve of Sindh is about 850 Trillion Cubic feet which is more than
oil reserves of KSA and Iran put together i.e. 375 billion barrels.
11. The employees should be trained how to treat the customers.
12. Reduction in the number of train services on un-remunerative routes.
13. The technological factors are of great importance in any industry like Pakistan railway. At present, Pakistan
railway needs to encourage investment to utilize the modern technology and to promote the research and
development activities.
a) Electrical engines
b) New railway tracks
c) Setup of such system that improves the efficiency
d) Online ticketing
e) System that finds defaults in railway tracks
14. The waiting lounges of the railway should be redesigned and must provide comfort zone for the customers
 6

2 Railways
AirLine
1 Motorways

Raise
1. technology improvement
2. employees efficiency
Eliminate
3.time efficiency
1. aging railway tracks
4.comfort zone for customers
5. coal consumptions
6.performance based remuneration

Reduce
1. over employment Create
2. extra routs of rails 1. redefined enviromnt
3. oil consumption 2.inovative technology
4.corruption 3.new recriutment system