Lahore: Pakistan Business Express, the luxury train service between Lahore and Karachi, is in jeopardy as the two partners from public and private sectors are in a legal battle over occupancy ratio and both sides accuse each other of violating the agreement.
The luxury train became an instant success after its launch in February 2012. The train first of its kind — complete with flat screen TVs, WiFi and lavatories — was part of an effort to turn around the dire fortunes of Pakistan Railways.
Commonly known as Business Train, it was a joint venture of Pakistan Railways and MS Four Brothers on a public-private-partnership basis. Not only the business community but the general public also became fond of Pakistan’s most expensive and luxurious train that was all about quality service and strict observance of departure and arrival timing. The train would simultaneously leave stations in Lahore and Karachi at 3:30 pm daily and reach its destination in 18 hours, including technical stopovers at Khanewal in Punjab and Rohri in Sindh. Journeying time was later reduced to 15 hours.
The recent launch of an Islamabad-Karachi-bound Green Line Train by Pakistan Railways on the pattern of Pak-Business Express has added fuel to the fire putting more pressure on MS Four Brothers.
Now the situation is changing in terms of quality service. The train runs behind the schedule most of time. There are also instances when its engine failed that resulted in long delays.
Husnain Ahmad, the sales head of a leading pharmaceutical company, told NewsLens Pakistan that he had to frequently travel between Lahore and Karachi and he used to travel by air. He said he had to switch to Business Train, thanks to emergency landing by a state-owned airliner.
“In the beginning, I was thrilled and excited to travel by Business Train. My children simply loved it. My excitement is over now.” Being a frequent traveler, he can tell the difference in the quality of service. The train now runs behind the schedule. “Though the quality has suffered and my trust shaken, I still prefer Business Train to other railway services.”
Recently Federal Railways Minister Saad Rafique told journalists the management of Business Express owed Rs1.75 billion to the railways. Pakistan Railways want this deal to continue only if MS Four Brothers pay daily rentals as per the deal which is Rs 3.1 million at 88% occupancy ratio.
“We want our payment to be released as per the initial agreement and the outstanding amount which is mounting with each passing day,” Senior General Manager Railways Javed Anwar told NewsLens Pakistan.
The deal signed back in 2011 between two parties was meant to introduce an executive culture in railways network by providing a world class service to passengers equipped with modern facilities and technologies via a third party. This was also termed partial privatization of the state-owned corporation because of the poor financial health of the entity.
Initially, the train service was planned for businessmen who frequently travel between Lahore-Karachi but later an economy coach was also introduced to generate more revenue and accommodate middle-class travelers.
In the first month of its inauguration i.e. February 2012, the Four Brothers management realized that they had struck a wrong deal, especially in terms of occupancy ratio. Later, the management started pressing the railways to lower down its occupancy ratio to 55% and it stopped releasing full payment within a month of the inauguration. In reaction, the railways halted the operation a couple of times and asked the management to release payment before the train departure.
After a long struggle, the Four Brothers managed to bring down occupancy ratio to 65% that too through Economic Coordination Committee (ECC) in 2013. The daily rentals were revised to Rs 2.2 million for using the railways infrastructure. Since then the tussle is on.
“The ECC is not a relevant platform to solve such disputes and this is the reason we have decided to move the Supreme Court for a review decision,” Anwar said.
It was not the railways that came with a proposal to start this venture on a public-private-partnership basis, it was the Four Brothers who approached and stuck a deal at 88% occupancy, he said. Since they have managed to get stay orders from a court, we are bound to allow them to continue their operation, but we have simultaneously told them to deposit Rs 3.1 million daily instead of Rs 2.2 million, he said.
“We are ready to close our operation. The railways should give us a one-month notice followed by the initial investment we have made to develop a state-of-the-art infrastructure,” said Mian Shafqat Ali, Director Operations, Pak-Business Express, while talking to NewsLens Pakistan.
“We have already established ourselves as a brand and when it comes to joint ventures in the railways, Business Express is the name which strikes every body’s mind. This is the success of our model that the railways are now bound to follow by starting similar trains in competition,” Ali said.
The Four Brothers group has invested Rs 225 million in this project. In addition to this, money was also credited into the railways account to refurbish coaches and locomotives.
According to the contract, whoever wants to withdraw the deal has to give a month notice to the other party and will not be eligible to claim initial investment.
“We have won the case in the high court, which proves we are right, if the railways feel we are wrong, they should prove it in the court,” Ali said. He added that they have given more than Rs 2.5 billion to the railways in shape of daily rentals since its inauguration but the management is continuously teasing them by delaying the train, not providing with agreed locomotives and annual refurbishment of coaches, which is a part of the agreement.