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INTRODUCTION: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 – customers, shareholders, employees, suppliers and the
societies in which we operate – 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.
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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.
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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
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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 existing processes. It also requires us to embrace
change so we are in the right place when new opportunities open up.
Excellence also means attracting the best talent in the marketplace and
giving them the skills and opportunities they need to become high-achievers.
We are committed to living a high-performance culture.
Our principles:
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
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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.
Our principles:
We create innovations that give our customers a
unique competitive edge
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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
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CORPORATE STRATEGYSiemens 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 –
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
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
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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.
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SIEMENS RAIL INDUSTRY:
The core products for railway logistics by SIEMENS include the following:
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.
Light rails, which are also used for trams and intra city commutation.
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Turnkey systems, which are specific trains designed for underground
subway systems.
Trains, which include high speed valario and other bullet trains
Integrated services, which include software and hardware solutions for
railway logistics and supports.
Heavy rail, which are used for freight and cargo delivery.
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GLOBAL PRESENCE:Major facilities of SIEMENS are located worldwide, providing it a competitive 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.
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GLOBAL R&DSiemens 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
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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
innovation—from 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.
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Thus the company emphasizes on innovation and the reason for this
innovation is their goal, which is to become the world leader.
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CORPORATE RESPONSIBILITY
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
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GLOBAL SALES OF SIEMENS
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INVESTMENTSSIEMENS' MAJOR R&D INVESTMENTS
€3.4 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
USA9
BRAZIL9
19.3; 27%
22.8; 31%12.6; 17%
10.9; 15%
6.8; 9%
Sales (millions of Euro, percentage of total)
AMERICA EUROPE(exc Germany)GERMANY ASIA-PACIFICAFRICA,MIDDLE-EAST,CIS
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PRODUCTION FACILITIES PRESENT GLOBALLY
*The top manufacturing facilities are present in USA with about 21 facilities
GERMANY74
ASIA-PACIFIC51
AFRICA,MIDDLE-EAST,CIS
3
AMERICA 77*
EUROPE excludingGermany
59
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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
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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. India is a "key market for growth" for Siemens
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
In India, Siemens has established about 18 factories. Siemens is
providing world-class trains in India
1 http://www.imd.ch/research/publications/wcy/upload/scoreboard.pdf
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In Russia, Siemens has signed a 30 year contract to provide its
high speed Velaro trains to the country
Siemens has shipped an eight carriage Velaro high-speed train to
China in December. The train can accommodate about 6oo
passengers.2
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
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
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.
2http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tstr20071206.htm3 http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tsra200712008.htm4 http://w1.siemens.com/press/en/pr_cc/2007/12_dec/tsmt200711010.htm5 http://www.transportation.siemens.com/ts/en/pub/newsline/newsline/press_2007/2007/17_08_2007.htm
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COMPETITORS The SIEMENS consider the following as their major competitors in the market
Alstom of France
Bombardier of Spain
Finmeccanica of Italy
Invensys of United Kingdom
SPAIN
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.
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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. 6 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.
GERMANYGermany 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
6 http://today.msnbc.msn.com/id/21790275/
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speed ranging from 175mph to 280mph linking various cities of
Germany together.
Intercity 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.
FRANCEOne 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,
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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.
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JAPANJapan 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.
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CHINA7
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.
7 http://www.chinaeconomicreview.com/logistics/category/railways/page/6/
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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.
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RAILWAY TECHNOLOGY AND TYPES OF HIGH-SPEED TRAINS
RAILWAY GAUGEThe 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
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.
ELECTRIC TRAINS1. 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
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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
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DIESEL-ELECTRIC LOCOMOTIVESThe 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.
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MAGLEV TRAINThis 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.
A powerful electric power source
Large guidance magnets attached to the underside of the train
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
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very expensive to operate. The Shanghai Maglev train started
operations in 2001-2002 which was built using the technology of
Siemens.
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PAKISTAN RAILWAYS
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.
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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
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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 thirty-five 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)
MAJOR ROUTES
The total length of railway tracks in Pakistan is 5,072 miles (8,162 km). The
busiest routes include:
Peshawar-Karachi Route
Peshawar-Quetta Route
Lahore-Sialkot Route
Lahore-Faisalabad Route
Faisalabad-Khanewal Route
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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
MAJOR RESPONSIBILITIES 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
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o Sui Gas connections will be handed over to Sui Northern Gas
to avoid extra expenditure on bulk supply
Increasing Revenues
o Purposed performance indicator
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REVENUE RECEIPTS
Year
Passenger Freight Other
Earnings
(Rs)
Overall
Earnings
(Rs)
PKMsEarning
(Rs)TKMs
Earning
(Rs)
2003-04 22.8 8.2 4.9 4.6 1.7 14.5
2004-05 23.2 8.6 5.5 5.2 1.9 15.7
2005-06 23.7 90. 6.3 5.9 2.0 16.9
2006-07 24.3 9.5 7.3 6.9 2.3 18.7
2007-08 25.0 10.0 8.4 7.9 2.5 20.4
2008-09 25.8 10.7 9.6 9.0 2.8 22.5
2009-10 26.8 11.7 11.1 10.4 3.1 25.2
2010-11 27.9 12.9 12.7 11.9 3.6 28.4
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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 – Quetta – 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 – Peshawar section in phases
8. Electrification of Lahore – Khanewal double line section with
rehabilitation of existing single line Lahore – Khanewal section
9. Procurement/ manufacturing and assembly of 100 passenger coaches
10. Other minor projects
8 http://pakrail.com/Dir%20of%20Plan%20&%20PrivMRI17031.asp
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The estimated cost of completing the above mentioned projects is
approximately Rs. 124 Billion.
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MODERNIZATION ACTIVITIES9
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:-
To ensure more comfortable journey it has been decided to
manufacture only lower class air-conditioned coaches in future.
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.
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.
Public address system is being provided in Subak Raftar, Subak
Kharam, and Tezgam and Khyber Mail trains.
9 http://www.asiatradehub.com/pakistan/railways.asp
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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 Lahore-Narowal-Sialkot Sections have been
privatized.
Feasibility study for a high-speed track is in hand.
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GOVERNMENT POLICIES
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
10
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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:
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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
foreign markets.
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
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it easier for the citizens to travel on longer routes without
hesitation.
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CONTINGENT LIABILITIES
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
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• 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
• Guarantees for private investments
• State insurance schemes.
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
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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 11- 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
11 http://www.pak-times.com/2007/12/08/railways-to-involve-privet-partnership-in-freight-investment/
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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 13- 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.
12 http://www.pak-times.com/2007/12/08/railways-to-involve-privet-partnership-in-freight-investment/13 http://www.pak-times.com/2007/08/29/pakistan-railways-pakistan-post-sign-deal-for-railway-booking-in-16-cities/
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Railway Ministry is trying to improve train food 14- 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 15- 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.
14 www.dailytimes.com.pk/default.asp?page=2007%5C06%5C30%5Cstory_30-6-2007_pg7_19 - 38k15 www.app.com.pk/en/index.php?option=com_content&task=view&id=23571&Itemid=2 - 35k
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OVERALL INDUSTRY ANALYSISThe 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
16
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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]
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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:
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
Rail transportation plays an important part in the sustained
development of their economies
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
For travel times of less than 4 hours, high speed trains are more
frequently used than airlines
High-speed rail traffic in Europe has tripled in the last ten years
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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 of their sheer absolute volume. Despite
low annual growth rates that hover between 0.5 and 1%, Western Europe
remains the rail supply industry's biggest market, accounting for 32% (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.
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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 – twice to the
moon and back. Upkeep – maintaining and replacing existing systems at the
end of their useful lifespan – is, and will remain, a key factor driving the rail
supply market. Services – relating both the rolling stock and infrastructure –
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
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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]
17
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TREND ANALYSISA 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
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believed that there was a gap between the supply and demand of the
travelling services provided to our population.
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.
57%
5%
10%
28%
Why would the Bullet Train Project not be Feasible?
InfrastructureGovernment PoliciesDemandAffordabilityTerrorism
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60%32%
8%
Should Seimens Supervise the Bullet Train Project?
Yes No Why Not China?
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.
50%
30%
20%
Is the Introduction of Bullet Train Feasible in Pakistan?
Yes No 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
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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.
47%
29%
4%4%
16%
Percentage of People Travelling From Rawalpindi to Different National
Routes
Lahore KarachiPeshawer QuettaAll 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.
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45%
29%
16%
10%
Percentage of People Travelling by Train
Rarely Ocassionally Frequently Never
After analyzing the percentage of people travelling by train we set out to
determine the preferences of these students with reference to the mode of
transport while travelling on 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.
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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.
52%
20%
21%7%
Mode of Transport that is Prefered on National Routes
Airplane Car Bus Train
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88%
12%
Should Seimens Supervise the Bullet Train Project?
Yes No Why Not China?
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.
38%
24%
38%
Is the Introduction of Bullet Train Feasible in Pakistan?
Yes No 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
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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.
62%25%
13%
Percentage of People Travelling From Rawalpindi to Different National
Routes
Lahore KarachiPeshawer QuettaAll the above mentioned cities
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.
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89%
5%4% 2%
Percentage of People Travelling by Train
Rarely Ocassionally 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.
28%
72%
Mode of Transport that is Prefered on National Routes
Airplane Car Bus Train
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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 MARKETA 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.
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SEGMENTATION
SEGMENTATION ACCORDING TO OCCASIONSThe 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.
Segmentation
Frequency of Visit Income Level Social Class Type of
Customer Ocassions
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INCOME LEVEL 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.
SOCIAL CLASSThe 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 CUSTOMERSThe 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.
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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.
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TRANSPORT INDUSTRYThe 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
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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 COMPETITORSNow 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.
DIRECT COMPETITORS
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
18 http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/EXTSARREGTOPTRANSPORT/0,,contentMDK:20699058~menuPK:869060~pagePK:34004173~piPK:34003707~theSitePK:579598,00.html
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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. RAWALPINDI
Train Name Train
Code
Direct
ion
Arrival Departu
re
Arrival Depart
ure
Khyber Mail 1 UP 9:30:00
PM
10:10:00
PM
3:30:00
AM
3:55:00
AM
Tezgam 7 UP 2:10:00
PM
2:40:00
PM
8:20:00
PM
Awam
Express
13 UP 8:00:00
AM
8:30:00
AM
2:25:00
PM
2:50:00
PM
Margala 109 UP 6:00:00 10:00:00
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Express PM PM
Jaffar
Express
39 UP 12:35:00
PM
1:15:00
PM
7:15:00
PM
Subak Raftar
Express
101 UP 7:45:00
AM
12:30:00
PM
Night Coach 105 UP 12:30:00
AM
4:35:00
AM
Islamabad
Non-Stop
107 UP 7:00:00
AM
11:05:00
AM
Quetta
Express
23 UP 11:10:00
AM
11:55:00
AM
6:30:00
PM
6:50:00
PM
Subak Khram
Express
103 UP 4:30:00
PM
9:15:00
PM
Jinnah
Express
47 UP 3:20:00
PM
3:50:00
PM
8:35:00
PM
Sir Syed
Express
49 UP 3:20:00
PM
3:50:00
PM
8:35:00
PM
Nishter
Express
51 UP 3:20:00
PM
3:50:00
PM
8:35:00
PM
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Rawalpindi
Express
111 UP 1:00:00
PM
5:15:00
PM
Passenger 327 UP 11:00:00
PM
7:10:00
AM
7:50:00
AM
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RAWALPINDI LAHORE JN.
Train Name Train
Code
Direct
ion
Arrival Departu
re
Arrival Departu
re
Margala
Express
110 DN 7:00:00
AM
11:00:00
AM
Khyber Mail 2 DN 1:25:00
AM
1:50:00
AM
8:00:00
AM
8:40:00
AM
Tezgam 8 DN 8:00:00
AM
1:45:00
PM
2:15:00
PM
Awam
Express
14 DN 12:45:00
PM
1:10:00
PM
7:00:00
PM
7:30:00
PM
Jaffar
Express
40 DN 6:00:00
AM
10:50:00
AM
11:20:00
AM
Subak Raftar
Express
102 DN 4:30:00
PM
9:20:00
PM
Subak
Khram
Express
104 DN 7:30:00
AM
12:15:00
PM
Night Coach 106 DN 12:30:00
AM
4:35:00
AM
Lahore Non-
Stop
108 DN 6:00:00
PM
10:00:00
PM
Quetta
Express
24 DN 10:40:00
AM
11:00:00
AM
5:35:00
PM
6:15:00
PM
Jinnah
Express
48 DN 2:30:00
PM
6:35:00
PM
7:05:00
PM
Sir Syed
Express
50 DN 2:30:00
PM
6:35:00
PM
7:05:00
PM
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.
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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
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)
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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 and 1/3 time to that of India .The PR
has a very low and stagnant market share, carrying less than 10 percent of
passenger traffic and 5 percent of freight.
Road TransportAccording 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 AuthorityLike 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 (155 km access-controlled
motorway with 6 lanes)
M-2: Lahore to Islamabad (367 km access-controlled
19 http://en.wikipedia.org/wiki/Transport_in_Pakistan
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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 (200 km access-controlled
motorway with 4 lanes)
M-5: Multan to Dera Ghazi Khan (65 km with 4 lanes)
M-6: Dera Ghazi Khan to Ratodero (450 km with 4 lanes)
M-7: Kakkar to Karachi via Dureji (303 km with 2 lanes)
M-8: Gwadar to Ratodero (1072 km with 2 lanes)
M-9: Karachi to Hyderabad (136 km with 6 lanes)
M-10: Karachi Northern Bypass (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
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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)
20 http://www.nha.gov.pk/FAQs/FAQs.asp
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SAMMI DAEWOO BUS SERVIVEThe 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 – Rawalpindi route mainly
because of the security it offers along with the good service.
Toll Rates for Motorways
Vehicle Type
Car, Jeep, Land Cruiser/Pajero, Suzuki Van/Pick up
or Equivalent
Detail
s
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.
Detail
s
Rs.
25/-
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
Detail
s
Rs.
25/-
Busses greater than 25 seats Detail
s
Rs.
40/-
Rigid Trucks including 2 Axle, 3 Axle Trucks Detail
s
Rs.
50/-
Articulated Trucks/Vehicles Detail
s
Rs.
100/-
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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.
TICKET PRICE 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 75021. This is because
of more comfortable seats and better service offered to the customers.
21 http://sammi.com.pk/fares.asp
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DRAWBACKS OF ROAD TRAVELApart 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.
AIR TRAVELPakistan 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 AIRBLUEThese 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.
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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.
PIAIt 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.
DrawbacksThere 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
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OVERALL OVERVIEW
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.
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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 TRAINBy 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.
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ENVIRONMENTAL FACTORS
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 take-off 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.22
22http://images.google.com.pk/imgres?imgurl=http://www.cfit.gov.uk/docs/2001/racomp/racomp/images/02.gif&imgrefurl=http://www.cfit.gov.uk/docs/2001/racomp/racomp/03.htm&h=327&w=544&sz=10&hl=en&start=14&um=1&tbnid=-hef9O-cfj_1QM:&tbnh=80&tbnw=133&prev=/images%3Fq
%3Drail%2Btrack%2Bof%2Belectric%2Btrain%26svnum%3D10%26um%3D1%26hl%3Den%26sa%3DN
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SWOT ANALYSIS OF BULLET TRAIN23
STRENGTHSTime Efficiency – 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 – 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.
Approximately 2.5million travel through train especially after the
introduction of certain reforms by Pakistan Railways
23 http://dawn.com/2007/05/11/nat16.htmhttp://www.dawn.com/2007/02/11/nat8.htm
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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
Can provide employment opportunities for the local population
Travelling time is reduced
WEAKNESSESOverall cost – 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 – 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
High cost
Establishment of a separate network to run the trains
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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 ever” Aaron
Dalton Forbes Traveler, Nov 15th, 2007
THREATS 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.
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.
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.
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
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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.
OPPORTUNITIES 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.
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.
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.
The news of privatization of Pakistan Railways has been spreading like
fire; Siemens can take part in the biding process.
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.
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Investment to prevent the current energy crisis
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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
Lower energy consumption per passenger kilometer
reduced land usage for a given capacity compared to motorways
displaced usage from more environmentally damaging modes of transport24
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
COST EFFECTIVENESSKeeping the infrastructure costs aside high speed trains are more cost
effective than normal trains because of two reasons:
24 http://en.wikipedia.org/wiki/High-speed_rail
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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.
TIME REDUCTIONBy 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.
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DISADVANTAGESIn 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.
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EXISTING RAILWAY TRACK OF PAKISTAN
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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 risk” 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
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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 1960s and the involvement of the public sector was restricted
to three out of 27 basic industries.5 It was also set that in the event of
private capital not forthcoming for the 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
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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 heights” 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 economy, with the private and public sector reinforcing
each other. At the same time it admitted that the public sector had
established its managerial and entrepreneurial foundations 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.
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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 and machinery
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(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
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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.
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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 facility” 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 applied to FDI
as to domestic investors. The requirement for government approval of
foreign investment was removed with the exception of a few industries such
as arms and ammunition, 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
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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
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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.
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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 duty-drawback is paid automatically within
three days to the firm, and the remaining 20% is paid within one week after
inquiry. The visa policy of Pakistan has been modified to make it 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
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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 product. The main objective of the new policy is to enhance
the level of foreign investment in the fields of industrial base expansion,
infrastructure and software development, electronics, engineering, agro-
food, value-added textile, tourism, and construction industries. Foreign
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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.
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Notwithstanding significant deregulation and various
incentives/concessions given to foreign investors, Pakistan still faces
serious problems as far as implementation of foreign investment 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.
FDI TREND: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
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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 picture of the trends in
portfolio investment witnessed during the post-liberalization period. If the
$862.2 million sale of Pakistan Telecommunications Corporation (PTC)
vouchers, which 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
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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.
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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.
CURRENT STANDING:
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.
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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 – 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 – GDP ratio has reached 38 percent –
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 – 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
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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
automobiles has jumped from 30,000 in 1999-00 to 200,000 cars this year. In
addition another 50,000 cars are being imported.
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
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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 – three large nationalized commercial banks of the country.
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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.
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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 – capital, consumer, raw
materials – 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 –
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
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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 – both domestic and foreign private
companies – have played a critical role in filling in electricity generation
requirements of Pakistan.
Telecommunication has witnessed a boom since the private sector
companies were allowed licenses to operate cellular phones. One million new
cellular phone connections are being 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 – local, long distance, international
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– 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
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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
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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.
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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 ever-increasing quest to enter these
markets is also working to the disadvantage of countries such as Pakistan.
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LABOR FORCE:The 'informal economy' refers to modes of production and enterprises that
range from small-scale 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
“Informal” 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 self-
employed15 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
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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
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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 home-based workers, but
the new labor policy failed to do that.
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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.
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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 growth”
is being pursued by both public and private sector. Furthermore,, “high tech”
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
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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 1995-2000, and in 2004, it
was 8.3 percent.
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PROJECT FEASIBILITYThe 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 Two-phase, 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
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was reviewed and updated as part of the World Bank funded “Lahore
traffic and transport studies” 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.
ISSUES:
Barriers to entrySome 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.
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
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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 Asia for investment opportunities
Political uncertainty The biggest barrier is that of political uncertainty and
instability 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
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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.
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.
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FINANCIAL ANALYSIS:
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 $1.5 billion
Cost of the trains $0.18 billion
Total Cost $1.68 billion
The operational cost of the project after its beginning would be
Cost of Train Drivers & staff
Type Salary Cost per
person / year
Total Employees Total Cost
Train Drivers $12000 6 $72, 000
Helpers on Duty $5000 6 $30, 000 = $
102,000
Finance Department / Salaries
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Type Salary Cost per
person / year
Total Employees Total Cost
Senior Manager
Finance
$50000 1 $50000
Asst manager
finance
$16000 3 $48000
Compliance officer $30000 1 $30000
Internal Auditor $20000 2 $40000 =
$168,000
Marketing Department
Type Salary Cost per
person / year
Total Employees Total Cost
Senior Manager
Marketing
$35000 1 $35000
Asst Marketing
Manager
$12000 3 $36000
Relationship
Manager
$10000 1 $10000
Manager Sales $10000 2 $20000 =
$110,000
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HR/Admin
Type Salary Cost per
person / year
Total Employees Total Cost
Country manager $100,000 1 $100,000
Company
Secretary
$14000 1 $14000
Senior Manager HR $30000 1 $30000
Asst Manager HR $10000 2 $20000 =
$164,000
Technical and Maintenance (T&M)
Type Salary Cost per
person / year
Total Employees Total Cost
Chief Engineer $80,000 1 $80,000
Manager
Operations
$40,000 4 $160,000
Asst Manager
Operations
$16000 6 $96,000
Maintenance
Officer
$5000 15 $75000 =
$411,000
TOTAL COST = $
955,000
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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.
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RECOMMENDATION:
GOVERNMENT INVOLVEMENT: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.
FUNDING/ INVESTMENT: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).
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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)
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APPENDIX:
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.
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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.
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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 and modernize the railway service. He said
home-delivery of tickets had been introduced in Rawalpindi, Islamabad,
Lahore, Faisalabad and Karachi.
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
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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&ContentID=5755
Spain invited to bid
for high speed train
in Pakistan
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ISLAMABAD: Pakistan will introduce a high-speed 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 a
revolutionary change in the culture of Pakistan Railways not by improving
train timings but also by passengers' dependency. Special attention is being
focused on freight service, being major source of earning for the railways, he
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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 divisions”.
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.
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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 – 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 -
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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 Islamabad.
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
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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
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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 – 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 reflected in the approved mid term
plan before the end of the financial year 2004-05. The schemes are indicated
hereafter:-
Pakistan Railways Developmental Plans 2005-10 (Mid
Term Plan)
Estimated Cost
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Rs. Billion
i) Up gradation and improvement of track from Khanpur
to Lalamusa
3.50
ii) Dualization of Track from Khanewal to Raiwind and
Shahdara to Lalamusa.
7.00
iii) Setting up of a railway yard and railway linkage from
Gwadar port to container yard.
2.50
iv) Rail link from Gwadar Port to existing rail link at
Ahmad wall on Quetta Taftan section.
12.00
v) Up-gradation of Rohri – Quetta – Taftan section 15.00
vi) Provision of Railway link on remaining portion of right
bank of Indus for connectivity upto Peshawar via
Kohat
6.00
vii) Rail link from Quetta – Bostan – Zhob to D.I. Khan for
provision of direct connectivity from Baluchistan to
NWFP.
6.00
viii) Upgradation of Mirpur Khas – Khokhrapar section
from meter gauge to broad gauge upto international
1.8
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boarder.
ix) Feasibility study for provision of rail link from
Rawalpindi to Muzaffarabad AJK
0.1
x) Feasibility Study for provision of rail link from Dina to
Mirpur AJK.
0.05
xi) Procurement/ manufacture and assembling of 100
locomotives (75 diesel and 25 electric).
16.0
xii) Procurement/ manufacturing and assembly of 1000
freight wagons.
4.8
xiii) Procurement/ manufacturing and assembly of 100
passenger coaches.
4.10
xiv) Electrification of Lahore – Khanewal double line
section with rehabilitation of existing single line
Lahore – Khanewal section (285 Kms). And extension
upto Samasatta (163 Kms).
5.60
xv) Provision of road over bridge at Chowrangi Chowk
Export Processing Zone Karachi. (50% of the cost is to
be borne by EPZ).
0.125
xvi) Improvement and rehabilitation of old and obsolete
signalling system on Karachi – Peshawar section in
15.00
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phases.
xvii) Other minor projects. 1.00
xviii) For completion of on going schemes. 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.
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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 passengers”. 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.
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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
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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
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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 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.
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.
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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.
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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.
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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
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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.
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Last updated: 2007-04-25
PAKISTAN TIMES
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
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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
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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
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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
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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 speed”
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
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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_8-11-2006_pg13_3
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
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Data from Year Book
PLANT & EQUIPMENT UNIT 2004-2005 2005-2006
Route - Kilometers Kms. 7,791 7,791
Track - Kilometers Kms 11,515 11,515
Locomotives No. 557 544
Coaching Vehicles No. 1,604 1,663
Other Coaching Vehicles No. 214 241
Freight Wagons No. 21,556 20,809
Railway Stations No. 626 626
OPERATIONS UNIT 2004-2005 2005-2006
Passenger, Mixed & other Coaching
Trains Run. No 82,576 86,077
Train Kilometers, Passenger Mixed Thousa 31,119 31,497
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and other Coaching. nd
Coaching Vehicle-kilometers Thousa
nd591,397 581,288
Freight Train Run No 18,243 16,244
Freight Train-KilometersThousa
nd6,640 6,567
Freight Wagon-Kilometres (Freight &
Mixed Trains)
Thousa
nd351,514 350,107
Other Coaching Freight Tonne-
Kilometres.
Thousa
nd518,156 585,781
Volume of Traffic UNIT 2004-2005 2005-2006
Passengers CarriedThousa
nd78,179 81,428
Passengers kilometersThousa
nd24,237,796 25,621,228
Tonnes of Freight CarriedThousa
nd6410 60,27
Tonne - Kilometers Thousa 5,013,540 5,906,847
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nd
Tonne - Kilometers Freight &
Coaching Combined.
Thousa
nd5,531,697 591,688
Freight Wagons Loaded No 320,001 298,875
FUEL CONSUMPTION UNIT 2004-2005 2005-2006
Furnace Oil Tonnes 2,985 3,047
H.S.D. Oil Tonnes 154,650 145,309
Electric Energy KWH 11,924,746 11,736,977
Coal Tonnes 105.88 43.650
EMPLOYMENT & WAGES UNIT 2004-2005 2005-2006
Persons Employed No 86,807 86,096
Cost Of EmployeesThousa
nd6,346,243 7,646,562
Pension PaymentThousa
nd2,944,843 3,113,637
FINANCIAL RESULTS UNIT 2004-2005 2005-2006
Gross Earnings Thousa 17,827,467 18,043,641
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nd
Total Ordinary Working ExpensesThousa
nd14,158,740 15,868,276
Operating Ratio Percent 79.42 87.93
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SOURCES
PRIMARY SOURCE:
SYED USMAN WAZIR <syed.wazir@gmail.com>
Thu, Jan 10, 2008 at 8:12 AM
Reply-To: slash3r.syed@gmail.com
To: anumsk@gmail.com, anila.muhammed@gmail.com, mansoor.sadaf@gmail.com
Reply | Reply to all | Forward | Print | Delete | Show original
Dear Syed,
Thanks for showing interest in Siemens International. With regards to your email and project requisite, I am emailing you some useful links from our web database. You may find them useful for your analysis. Please also bear in mind that Siemens may or may not agree with your findings. for further queries you can email or call our investors relation helpdesk.
Hopefuly the links would be helpful,
sincerely,
Madeira Albert
International Investor Relations,
Siemens AG
http://w1.siemens.com/press/pool/de/homepage/the_company_2008.pdf
http://www.siemens.com/annualreport
http://w1.siemens.com/pool/en/investor_relations/downloadcenter/fmd_2003_ts_1073823.pdf
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http://w1.siemens.com/pool/en/investor_relations/downloadcenter/icn_fmd_2004_1148289.pdf
http://w1.siemens.com/pool/en/investor_relations/downloadcenter/the_company_2008.pdf
Telephone SupportWe would also be happy to answer your questions via telephone.
International (English)+49 (69) 797 6660Germany (German):+49 (800) 225 53 36
You can contact usduring the following times:Mo. - Th. 8:00 - 17:00 andFr. 8:00 - 16:00 (CET)
Kontakt
Siemens AGWittelsbacherplatz 2D-80333 MunichGermany
Central Office:+49 89 636-00Pressestelle:+49 89 636 33032 Investor Relations:+49 89 636 32474
© Siemens AG 2008
Mr. Farhan Saeed-AVP Siemens Pakistan-Lahore, Madeira Albert International Investor Relations, Siemens AG and Mr. Syed Humayaun Basharat-Electrical engg. Pakistan Railways
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INTERNET:o money.cnn.com/2007/12/26/news/international/bc.apfn.as.fin.japan.china.bullet.ap
o www.ibtimes.com/articles/20071226/report-china-mulls-japan- bullet - train .htm
o www.upi.com/NewsTrack/Business/2005/11/14/
siemens _gets_chinese_ bullet _ train _contract/1087/ o www.atimes.com/atimes/China/FE13Ad01.html
o ieeexplore.ieee.org/iel5/6/27450/01222045.pdf
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