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Rail minister freezes all China deals
June 13, 2013
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ISLAMABAD: New Pakistan Railways (PR) Minister Saad Rafique has put all deals of new railway engines with China on a hold and a major US supplier pulled out of a $540 million deal of 150 locomotives to allow the new government to buy engines in a transparent manner without losing time.

These two major developments in the Railways came as Saad Rafique claimed on Geo TV on Wednesday that Railways was suffering losses of over Rs40 billion this year, it had to repay foreign loans of Rs35 billion and had taken overdraft of Rs40 billion from the State Bank of Pakistan.

Saad, who has just taken over as Railways Minister, said on  “Capital Talk” show of Hamid Mir that he had put all purchases of Chinese engines on hold as these engines were total trash and not a single engine with the PR currently was 100 per cent fit to run.

“We were given 69 engines by China (in 2001) but they were all “Number 2” quality and the PPP government ordered to purchase 50 more of the same engines. I have put all of this on hold and a probe has started on who is responsible,” the minister said.

The PTI leader Shah Mahmood Qureshi, who was also on the Hamid Mir show, supported the railways minister and demanded that those who had made money on these shady deals must be exposed and punished. The railways minister agreed.

But the real development came from the US engines supplier Electro-Motive Diesel, a US company which has been awarded a tender of 150 new engines by the Pakistan Peoples Party government in October 2012 at a cost of $540 million.

Another US company challenged the tender in the Lahore High Court (LHC) and a stay order was issued, which has been pending ever since. But as the new Nawaz Sharif government has taken over, the US company, which had been given the order, has written to the government that they were withdrawing from the deal.

This will end the case pending in the LHC and the new government can now go for a new tender so that Pakistan Railways does not lose further time in litigation and the matter could be easily settled.

The categorical statement by the railways minister that the Chinese engines were a total failure has come in direct contrast to the efforts of the PPP government to buy more such engines from the same supplier and many experts feel this was being done to take commissions and kickbacks.    

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