Rafique-led Pakistan Railways faces another scam, train contracts awarded to ‘favourite parties’ in violation of rules


  • Commercial management of Khushhal Khan Khattak Express given to PRACS
  • Hazara and Fareed Expresses to M/s Jamil and Company
  • Bolan Mail to M/s Hakam Jiskani — in violation of rules

By Sarmad Ali

(Pakdestiny.com) After Rs10-billion illegalities, another scam worth millions of rupees has been unearthed in the Pakistan Railways.

This time Dawn has come up with details of this scandal in the Khawaja Saad Rafique-led Railways.
According to the report, the Railways has put the Public Procurement Rules 2004 on the back burner by amending articles of bid document while entering into an agreement for outsourcing the commercial management of three trains to the ‘favourite parties’ of the minister.

This gross violation has been committed apparently to benefit the ‘favourite parties’ of the minister and his front man.
In response to an advertisement appearing in national dailies in April this year, 10 private parties bought the bid documents for outsourcing the commercial management of Khushhal Khan Khattak (KKK) Express, Bolan Mail, Hazara Express and Fareed Express.

Hazara Express

Hazara Express

After bids’ evaluation, three parties were declared successful for operating the four express trains.
KKK Express has been outsourced to PRACS (Pakistan Railways Advisory and Consultancy Services), a subsidiary of the PR and both Hazara and Fareed expresses to M/s Jamil and Company, while Bolan Mail to M/s Hakam Jiskani. So far PR has signed outsourcing agreement with only PRACS, while the agreements with others are expected within a few days.

Khushal Khan Khattak Express

Khushal Khan Khattak Express

While entering into an agreement with PRACS on July 29 this year, the PR authorities amended four terms or clauses mentioned in the bid documents in violation of PPR 2004.
Sub-rule 3 of PPR 2004 rule 29 reads: “A bid once opened in accordance with the prescribed procedure shall be subject to only those rules, regulations and policies that are in force at the time of issue of notice for invitation of bids.”

Under the `Mode of billing and payment’ section 6.1 (b), the bid documents say: “The contractor will deposit with CCT (chief cashier and treasurer), Lahore, seven days round trip amount in advance, along with 10 per cent withholding tax on normal working days. In case of holiday or Sunday, the party will deposit seven days advance installment on previous working day. In case of any unexpected holiday announced by the federal government on the day when payment was to be deposited, the payment will be deposited on next working day.” However, agreement’s Sub-article 2 of article 6.1 merely says: “In case of any unexpected holiday announced by the federal government on the day when payment was to be deposited, the payment will be made on next working day.”

Bolan Mail

Bolan Mail

Sub-section 2.2 (e) of the bid documents section 4.5 says: “The party taking over the proposed business shall print and issue its own computerised tickets in advance and en route for all allied activities. However, it will be bound to send returns for the sale of tickets daily to FA&CAO (financial adviser and chief accounts officer)/Revenue, Lahore.

Pertaining to commercial commitment, Article 5 of the agreement has no mention that the successful bidder would send returns for the sale of tickets daily to the FA&CAO/Revenue, Lahore.
Sub-section 2.2 (g) of the bid documents section 4.5 says: “The party (successful bidder) may be allowed to charge extra for any additional service(s) that may be provided to passengers, including catering, in-house entertainment and installation of public address system etc. However, such an agreement shall bear approval of the client (the PR).”

Fareed Express

Fareed Express

Article 6.11(b) of the agreement allows that Party No 2 (the PRACS) “may fix/re-fix the fares which it will receive from its passengers on account of additional services…”
Sub-section 2.2 (q) of the bid documents section 4.5 says: “In case (of) cancellation of train or short composition, the contractor shall prefer (refer) its claim to CCM (chief commercial manager) duly verified by DTO (divisional transport officer)/ DME (divisional mechanical engineer concerned). The CCM office shall forward the same to the F&CAO/Revenue for payment. The party No 2 shall not be allowed to deduct any amount on this account at its own.

However, Article 5.14 of the agreement adds that “the amount claimed by party No 2 (PRACS) shall be reimbursed within 45 days from the date filing of the claim.”
This scandal is another example of the way Khawaja Saad Rafique is running the affairs of the railways. One scam follows another shows there is something serious wrong in the railways.

Although Prime Minister Nawaz Sharif has expressed his annoyance with Saad Rafique over different railways scams including Rs10billion illegalities and misappropriation of funds and closure of Lahore’s Royal Palm but but still there seems to be no improvement in its affairs. — Pak Destiny


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