The Pakistan Railways (PR) is considering a proposal seeking termination of the contract with its oil supplier— the state-owned Pakistan State Oil (PSO)—and joining hands with any private sector oil marketing company (OMC) for better services in the future.
Keeping in sight recommendations of a 3rd party forensic audit, the Railways has also decided to modernize its all 14 fuel storage sites including their maintenance together with the OMC pledging for the supply of best services during this regard, Dawn has learned.
“We have various issues with our existing oil supply vendor (Pakistan State Oil). These include tax (at source) deductions, oil supply, price, etc. Therefore, we’ve decided to explore other options that would ease our huge passenger and goods train operation,” Farooq H. Sheikh, Pakistan Railways Adviser (Marketing), told Dawn on Thursday.
The Railways requires 1.5 million liters of oil worth Rs20 billion annually (for its passenger and rattler operation) which’s 30 percent of its total operational cost. Around 70 million passengers use railways for travel during a year and a number of other freight companies use railways for goods transportation, the department has 14 sites where the locomotives’ fuel tanks are filled. Three sites are situated in Karachi, Sukkur, and two each in Quetta, Multan, Lahore, Rawalpindi, and Peshawar.
Talks for supply, modernization of 14 fuel sites underway with Total Parco
The PR, consistent with Mr. Sheikh, got conducted a 3rd party evaluation/audit of the aforementioned sites and identified various loopholes/leakages causing around Rs1.5bn loss to its revenue. These included outlived fuel storage tanks, absence of recent fuel dispensers, improper calibration, fuel theft, wastage, and absence of a performance-based and technology-driven system.
“Actually under our new transformation policy, we decide to outsource our entire rattler operation and desire to require it on an edge of the time once we, once, were the market leader by having 73pc share within the freight business in Pakistan that has now squeezed to the only 8pc,” the official explained. “And since the fuel is our major operational cost, we would like to plug all leakages on a top priority basis,” he added.
The adviser said the Railways has been getting supplies from PSO for a long. However, with the changing scenario of best business practices, its services aren’t up to the mark. that’s why the PR administration had a really important meeting with the management of a serious private sector OMC (Total Parco).
During the meeting persisted Thursday, the PR authorities headed by CEO Nisar Memon briefed the visiting delegation about requirements associated with the sites. These included replacement of the outlived storage tanks, installation of fuel dispensers and tracking devices, oil prices, maintenance of the equipment, etc.
“If we discover they are (Total Parco) offer feasible in line with a transparent and accountable, customer-centric, performance-based and technology-driven system, we may plan to start getting oil supplies from them after completing necessary legal formalities,” he said.
