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Pakistan Railways (PR) plans to readvertise tenders for outsourcing 22 trains after receiving limited interest from private companies. The decision comes as previous outsourcing attempts faced obstacles, including financial constraints and operational issues.
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PR currently operates 49 passenger trains, with 12 already run by private parties under public-private partnerships. These include the Sir Syed Express, Karakoram Express, and Green Line.
The recent tender process attracted only three companies, offering below the benchmarked amount. PR found it unfeasible to proceed with these firms under Public Procurement Regulatory Authority rules, prompting the decision to reissue tenders.
Industry insiders cite tough conditions and high benchmarks as reasons for the lackluster response. A senior official from a private firm operating a train in Punjab stated, “Running a train has become an uphill and thankless job. The profit margin is shrinking due to increasing costs.”
PR’s outsourcing plan sets earnings benchmarks based on three-year average ticket sales, considering the highest-selling year. Contractors must provide services such as Wi-Fi, complaint resolution, quality catering, janitorial services, and infotainment.
Some potential bidders express concerns about the high benchmark and requirement to sell tickets through PR’s Rabta application. These factors have reportedly dampened interest from businesses hesitant to share passenger data or accept the proposed benchmarks.
Despite these challenges, PR Chief Executive Officer Amir Ali Baloch remains optimistic about the outsourcing plan. He stated, “We will readvertise to attract more firms,” adding that PR would prefer to continue operating trains if contractors fail to meet passenger expectations.
The railway authority maintains that the benchmark is not excessive and views the delay as an opportunity to ensure competitive bids. As the process continues, PR aims to balance private sector involvement with maintaining service quality for passengers.
