(Bloomberg) -- Just a pledge from China to help upgrade Pakistan’s train network has prompted authorities in the South Asian nation to overhaul its colonial-era rail infrastructure.
For software businessman Farrukh Malik, the change was palpable. As he clambered aboard the 22-hour express service from coastal Karachi to the northern capital, Islamabad, Malik, 40, said he’d been a passenger on the line since he was a child. “The introduction of trains like Green Line which has lesser stops and runs strictly as per schedule is a great difference,”’ he said as the train whistled to announce its 10 p.m. scheduled departure.
Beijing is set to upgrade a 1,163-miles track from Karachi to Peshawar near the Afghan border with an $8 billion loan to Pakistan. It’s part of Chinese President Xi Jinping’s Belt and Road trade initiative, which includes $60 billion of badly-needed works financed in Pakistan.
Though approval for the Chinese-funded upgrade has been delayed — amid wrangling over financing — Pakistan’s Interior Minister Ahsan Iqbal said in a statement on Wednesday that the first phase of the work would start this year.
In the past decade, the nation’s rail network had become a byword for corruption, delays and filth. Now the unprofitable state-owned Pakistan Railways has doubled its revenue to 40.1 billion rupees ($362 million) in the past five years and aims to do so again over the same time period, Parveen Agha, secretary of Pakistan Railways, said in an interview in Islamabad.
“This is one of the biggest opportunities for us,” Agha said. “This is the upgradation of the entire railway system.”
To help ease increasing congestion in Pakistan’s second-largest city, a $1.6 billion metro-line in Lahore — funded by Chinese banks — is scheduled to open before this year’s vote. In total, Islamabad says it has rehabilitated more than 300 locomotives, over 1,000 passenger coaches, nearly 5,000 freight wagons and 31 stations. Pakistan also purchased 75 high-powered locomotives last year in a $413.5 million deal with General Electric Co.
The drive is already attracting more passengers, up 25 percent to over 52 million people since 2013. Working through the carriages, 40-year-old Rana Iftikhar Ahmad has been selling snacks on trains for last 15 years and said his sales have grown as much as 50 percent in recent years. Five years ago a train from Karachi would take four days to get to Lahore, he said. That same route now takes just over half-a-day on the Green Line.
“Things were so backward, now we are reaching our destinations on time,” Ahmad said as the train rattled along the verdant Punjabi countryside. “Now more passengers are using the rail and so our sales have increased.”
The government is also eyeing increased freight trade. With national elections scheduled for July and with the economy facing headwinds due to widening external deficits, Pakistan wants to increase exports to China, Iran, Turkey, Afghanistan and even arch-rival India through rail links, according to plans seen by Bloomberg.
However, many of the routes are still dilapidated and regular travelers talk about avoiding rats and trying to stay comfortable in packed carriages with hard wooden benches. On the Karachi-bound Awam Express from Peshawar on April 1 the air-conditioning broke down in one of the coaches in the stifling heat.
Along with decades of under-investment, the rail company has also suffered from ingrained graft. The corporation sacked “a lot” of officials involved in procurement scams in recent years, Agha said, without providing details. She noted the organization is now staffed by “people of good repute.”
“Corruption could be a big challenge for this project,” said Muzzammil Aslam, the chief executive officer at brokerage firm EFG Hermes Pakistan Ltd. But if implemented “it will make transportation cheap and competitive.”
Security is also a concern. Since 2000 at least 96 people have been killed and 480 injured in 137 attacks on Pakistani trains, according to the South Asia Terrorism Portal. A bomb blast in October wounded five passengers in the restive southwestern province of Balochistan. To bolster safety, authorities have raised a special security force of 700 commandos and deployed extra police to the trains in the past four years.
Back on the Green Line, passengers say they enjoyed the ride as it pulled into its final stop on time at 8 p.m., despite an hour-long delay due to a fatality on the track.
“We have taken three to four trips so far and it looks better now,” said Asma Rafique, a 45-year-old housewife travelling onward to Peshawar. “With Chinese investment Pakistan Railways can be the best.”
©2018 Bloomberg L.P.