fillF~~~ ~ ~~~~ Q1 L135

This renort is restricted to use within the Bank.

NTI'ERNATTONWAL B.ANK FOR RECONS1TRUCTTON AND DEVELTOPM:ENT

PROJECT REPORT ON THE REHABILITATION

of the

NORTHWESTERN AND EASTERN BENGAL RAILWAYS

1D ATtIQ'r A v

K LL U .J ..

March 20, 1952

Loan Department

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PROJE-CT REPORT. ON THE REUABILITATION OF TM, NORTH-JESTERN AND EASTERNBENIGAL RAIUIAYS - PAK1STAN

.I. Purpose and Scope of the.Report

-This report covers an analysis of a project involved in therehabilitation of the Northwestern and Eastern Bengal Railways wihichhas been submitted by the Pakistan Government as a possible project inwhich the Bank might participate. 'Tle technical and business aspectsof the project are considered, and recommendations concerning a possibleloan by the Bank are included. This report supersedes that of August 3,1951 on the same project.

The report is based on information submitted to the Bank bvthe Government of Pakistan in the summer of 1950, supplementary materialsubmitted bat the Pakistan Delegation-to the Baik in the summer of 1951and field observations and discussions conducted by a Bank Mission inthe fall of 1950 and by Mr. A. M. Saitzoff of the Engineering Staff inApril and-December 1951 and January 195,2.

The-project considered for Bank financing inVolves a parti-cipation in a rehabilitation program of the railways which haa beenunder way since Partition. While the Pak-istan Government has not preparedestimates of future traffic and the relation of equlnment and mainte.nance requirements neces4ary for a comprehensive appraisal of the raill-way rehabilitation nroaram. the information made available to thABank is considered to be adequate for reaching a decision regardinga nossible loan for this nrnient.

TTI Railwayn nevelom1ent Prnarnm

As a rpqlt Mf P'r+A+ttio PakIistan has iwo 41solated rap-nilwaywsystems,.each being parts of systems which now lie in' both PakistanAnd India. A .Tn+ tn..Athier of' tlhe orvgivnnal TT e%1+.iniv 14ces

in West Pakistan while about 46% of the old Bengal-Assam Railway liesa-. -t. ~* I- --... . SJd -~ J% t&'l JC&I ~..bsJ J ~J6.LJ &

Pakistan has been renamed the Eastern Bengal Railway.

The portion of the Northwestern Railway now in Pakistan has aruemi4leana o%f 5,362 anrd a m-rc. l .. eage ^ 7,,Chn^ cor4s§4n-, -P 'k-Ad

meter and narrow gauge tracks. The Eastern Bengal Railway has a routem"4'eage of, 'Io 1A660 wth11 abou 21-5 track .,4- alo0ad ,p of -- eseparate gauges.- Of the three gaugeq, the IM is predominately broad

railway facilities has resulted in a serious disproportion between trafficajjd& x UJ.116 CLAArQYWp L4 Wac4' Qt JW%.LA.L .J partic"5ar0z s,ce L. t.4.. jacd v L.V.L AI

in East Pakistan has been substantially altered in order,to utilize portswzhichaLwere r.ot ofO grea-9& J.-,.pIor'Dace pti* Oo a-A:CxA.Ut.%wor4* Dotu s-ystkuv, pXlvv

suffered badly from lack of maintenance during and following 'the wzar with_~~J U-AiU -__ -- I _ 1_ _ __-_s - A 4 LU LA- _ t*S rsclv;S vo w>ss14 p*-CWr assju 1-01 UVIV, OvOCKO A aV Ut,sw 40.11 01 ral-L'Iut'ln

important -maintenance facilities of the EBR were lost to the Indian Rai:L-ways and thosV remaingLU were badly damageu. as a result of this situation,a rehabilitation program has been established for each of the ttJo systems.,the objectives of wiach are to complete all ma=intwnance TworK on track aadequipment which has been deferred; to make the necessary additions and

2

repjacem nns to locomovLves and roJ.iIg sbUo., oU Lo proyide additionalshops and repair facilities for proper maintenanee of the systems.

In the three years 1,947-48 through 19.49-5o the rehabilitationproaram invoived some reconditioning of track but only at a rate of about,half of that required for normal maintenance. Repairs to locomotives anclrolling stock were stepped up, but in spite oI tnhis eifort, an increasingnumber of engines, and cars were lost from service* During this period noreplacements of locomotives and rolling stock were made and littile expan--sion of repair facilities was realized.

A substantial program of replacerqents and additions was autho-rized by the Government starting in the fiscal year 1950-5L and thisprogram has been.carried forward and expanded in the budgets for 1951-52and 1952-53. Details with respect to items involved are included in thebudgets and while these programs have been and are subject to revisionswith respect to individual items, the principal objectives remain the same,that is, to begin the conversion of the main line traction of both railwaysystems to diesel power, the acceleration of track and equipment maintenancenow in arrears. and the replacement of locomotives and rolling stock whichare out-dated and beyond repair. Also, the railwrays program includes thefirst phase of the development of the shore facilities of the Port ofChittagong which is owned and operated by the EBR. Since it is the inten-tion of the Pakistan Government to separate the accounts of the Port fromthose of the railway, this development is considered to be a separate projectand has not been included in the railwvay programs considered in this report.

The Constituent Assembly authorized a capital additions andreplacements budget for the two railway systems of Rs. 97 million infiscal Year 1950-51. and Rs. 172 million in 1951-52 and.the StandingFinance Committee of the Assembly has approved a budget of Rs. 186 millionfor 1952-53. Table II at the end of the report summarizes by categoriesand years the railways' capital additions and replacements budgets forthese 3 years. The Government recognizes, however, that the railways maynot be able to undertake all of the program included in the budget duringthe vear in which budgeted, and therefore appropriates funds in only theamount that is expected to be actually expended during the fiscal year;Such apDropriations amounted to Rs' 90 million in fiscal year 1950-51, toRs. U19 million in 1951452 and are expected to amount to Rs. 120 millionin 1902-0i-

ThA estimated breakdown between lotal currency and foreignexchange in the capital additions and replacements budgets of the rail-wav=s for t+hl three vears endin7 1952-q3 is as follows!

item Total Local Currency Foreign Exchange-(In Rs. 1000)

Locomotives 47,h494 ?,371 45,123Boilers 7,428 372 1 7.,056Carriages 55,629 11,126 44 5(3Wlagons 82,292 16,459 65,833Ferries 12 ,760 2,552 10,208iMachinery 26,Z724 ,018 1M,706Bridges 6,503 4,552 1,951New Lines 31,012 15,506 15,506Track Renewals 111,166 33,350 77,816Other Eng.Ivorks 73,851 51,696 22,155

Total / 454X859 146,002 308,857(0136,458,000) ($43,501,000) (,92,457,ooo)

The foreign exchange component of this program amounts toapproximately twvo-thirds of the total estimated cost. This is high butdoes not appear to be out of line for a country which has practically noequipment manufacturing facilities.

Budget authorizations for current maintenance and repairs seemto be adequate In the railvways budget for the fiscal year 1950-51, atotal of about Rs. 352 million is allocated for operating expenses in-eluding depreciation and interest. Of this total. Rs. 101.5 million areallocated for maintenance and repairs. Comparable figures for 1951-52are Rs. 375 million and Rs. 109 million resDectivelv In each vear theamounts allocated for maintenance and repairs amount to 29% of totaloperating expenses and tlis is considered to be sufficient for the purposeand a necessary complement to the rehabilitation program.

The program as presently formulated appears to be conservativeand the types of eauipment involved are definitelv required for effici-ent operation and the quantities of locomotives, carriages and otheritems are not considered to be excessive in terms of the actu_l need.This is also true of shop equipment and track repair materials which shouldhave top priority in the nrogram.

The railvray rehabilitatinn program mustn he pcontiniedr forAnumber of years if deferred maintenance and necessary replacements areto be effected. Since the financing of the railviavy program issubectto annual appropriations, no detailed program beyond that for the fiscalyear 1952-53 hqq been formilated and no firnr-1a haxre Ih avort nii+hd,7 Itis, therefore, not possible to estimate the total investment which will

^, nsta at_ons v: lz~~~~~~~4 n ve nv vr.n cure. .ai.tr.c accor4

Does not include the development of the Port of Chittagong, creditsfor operation of shops ari. storept reductionp by Constituent Assemblyand credits for items taken from inventor es.

bu-e mn-adA e in the raJilVVY-ys orth t req- -eA to copete h rg'

Based on the average age of the equipment and the condition of the tracks,J.U seems >,tha an addio.lnvset at lat: equal- tou k0at, aLuthoizedj

in the two year period 1950-51 and 1951-52 must be invested in the nextfour years to br-ng replacements and repairs to a current basis.-

III.. Description of Equipment Proposed for Bank Financing

It has been agreed with the Pakistan Government that the pro-posed railwray loan should cover the foreign exchange requirements forfinancing the following equipment:

(1) Diesel Electric Locomotives

(a) NWR - 32 BG diesel electric locomotives for theKarachi-Lahore-Peshawar main line, 20 shuntinglocomotives for the Karachi port and Liarshallingyards, and o shunting locomotives for ilihnewal.The main line locomotives will be 1400 hp eachof which 23 'Kill be passenger locGmotivcs and 9freight locomotives. The shunting locomotivesTill be 660-750 hp each;

(b) EBR - Diesel equipment for the EDR is liiuAted,at this time, to the purchase of 5 MG 1400 hppassenger type diesel electric locomotives and13 HIG shunting locomotives of 350 hp. The mainline diesel electric locomotives for EBR willhave an unusual wheel arrangement because oflimitation of admissible axle loadst. The EBR.,therefore, plans to operate these locomotives ona test basis for 6-12 months before placingadditional orders,

(2) Replacement Boilers

Of the railways program for the purchase of 17 boilers for theNWR, it is proposed that 2 replacement boilers for BG locomotives befinanced by the Bank and of the program for the purchase of 99 boilersfor ERR it is proposed that the Bank finance 10 replacement boilers forMG locomotiveq.

(3) Carriagep

It is proposed that the Bank finance 1?3 BG carriages and 12MG carriages for replacement of overaged stock on the NAR s-stem and 62MG carriages on the EBR system.. The carriages for both rai.lwcy systemsare predominantly third class of modern pressed steel construction.

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( 4 ) -agonls

It is proposed that the Bank finance 272 BG low gondolas and50 BG high gondolas for the RJR and 872 IMG jute wagons for the EBR system.This is a part,oif the railways' 3-year program for wagon renewals whichis described fuI'ther in this report.

(5) Shop Equipment

It is proposed that the Bank finance special diesel shop equip-ment, including travelling overhead craneso for both the Karachi workshopon the NVIR system and the Pahartali shop on the EBR system. The Karachishop will service and repair both the shunting diesels operating in theyards and the main line diesels operating out of Karachi. The Pahartalishop near Chittagong will service and maintain the shunting dieselsoperating in the Chittagong yards and the 5 main line diesels now onorder and will ultimately service all main line diesels operating in thissystem.

(6) Sleepers

The railwvay program provides for the placing of 700,000sleepers annually on the two systems for normal maintenance. In addi-tion the program provides for the placement of 500,000 sleepers annuallyfor the next six years to make up arrears4 The railwrays currentlyr haveon hand well over 1,000,000 sleepers and expect to receive possibly asmany as 800.,000 during 1952 under Canada's contribution to the ColomboPlan. It is therefore proposed that the Bank finance only the 50,000special size wood sleepqrs for the WR and the 10,000 special size woodsleepers for the EBR-purchased in the U.S. They vill be used for replace-ment of sleepers on bridges, sidings and ashpits.

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IV. Estimated Cost of Equipment

The estimated cost of the items proposed for Bank financing isas follows:

Item Description Total Esti- Payments Balance .forNo. mated Cost to 5/1/51 Bank Firnncing

(in $521000)1 Diesel electric locomotives-,

including spare parts(a) 23 broad gauge main line 5,280 993 4,287(b) 9 broad gauge main line 2,OO - 2,200(cj 5 meter gauge mnain line 1,300 - 1,300(d) 28 broad gauge shunting 3,800 - 3,800(e) 13 meter gauge shunting 1,300 - 1,300

2 Replacement Boilers(al) 2 broad gauge 62 - 62(b) 10 meter gauge 207 207

3 Carriages(a) 123 light. Q01 hs+e i broad gauii -_6inf(b) 7h light steel meter gauge 2,600 - 2,600

4 Viagons

(b) 176 BG-.low gondolas 490 490Nc 50% BGt hI..; gor.dolas1 17n 170

102 BG open-end gondolas 340 340

5 Diesel Shop Equipment(aJ rara.lc Shop L4,) - LV42V

(b) Fahartalj Shop 450 _5-

6 Sleepers(a) 60,0U0 special size woouUen U5)f -

7 UnLspeci.L.e' 4 _485

TOTALS 28,193 993 27,230

The above cost estimates are based on contract prices or currentquotations where contracts not yet placed and include a 5 allovrance forescalations except that a 107 allowance has been included for the 23 BG MaLinline diesels ordered in October 1950, and, for the 9 additional BG main lirtediesels. The estimated cost includes only the portion of freight and 1asLrancewhich is payable:in dob,lars since freight and insurance in other currencies willbe met out of Pakistan's own resources. The ncost of the diesel locomotives in-cludes spare parts and special tools estimated to be required during the f.irstthree years of operation.

It is believed that the estimated cost for the above items prrptbsedfor Bank financing are reasonably accurate and are on a conservative basis.

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V. Schedule of Deliveries

The schedule of deliveries on items proposed for Bank financingand on which orders have been la.eed or are about to be placed is as foILows!

flplivervNo. Item Start Finish

1 Diesel electric locomotives(a) 23 BPr mnin line September 1911 Ily 1952(b) 9 BG main line _ June 1953(G ) 5 i. main line Jumne 1953 Jugne 1953(d) 28 BG shunting April 1953 December 1953te) 13~IT iir sn+Arn Avn-- 195< Aus+,i, 1953

2 Boilers12 Broad and meter gauge Delivered

3 Carriagest-) 12-ragagAp: 1953 Octobe 9e3

(b) 74 meter gauge April 1953 October 1953

4 Tyagons(a) VI7 w Jute wagors -- i 1953(b) 322 BG wagons - February 1953.

5 Diesel Shop Equipment(a) Karachi Shop u October i951y(b) Pahartali Shop - January 1953

6 Sleepers60,000 wJooden October APril 1953

VI. Niethods of Financing

It is planned that the financial requirements of the railway programl1li be provided from the following sources:-

1) Depreciation Reserves

The Pakistan Railwrays started operations after Partition with a nilbalance in their Depreciation Reserve Funds.- Since Partition the railwayshave been diverting annually from tpieir earnings into the Depreciation ReserveFund an amournt equivalent to 1/60 of the capLtalization df the railways at theend of the preceding operating year, or approxumately Rst2 million per year.The Government permt ted the railaTys to allocate an aIditional Ra.-20 m2Mion fram

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earrnincr to,n nthe Dvpoe-atioJn Remsemremd *linrn 1915 ndr sxpcedt

make similar authorizations in subsequent years if demands on the Reserve'W[nA exceed 41a resour^esv Al-o +Iw. Gover.nment has ,been r.*,l* a----ia= -

tions annually from its general revenue to the Reserve Fund to cover the

resources of the Fund* To date$ however, the railvway program has notrequird V vzJ i,.VL thV L- U"A" d to 'Lvw on 4CJUhes e appropra i.Lons by the, Goverre

2)1 Increase i-n 10pital

The Central Goverrnment is the sole Orwner of tne railwaysu capitalwnhich was carried at Rs. 1,246,196,000 on March 31, 1951 and receivesinterest on this amount at tne rate of 32.25. Tne Government can inmreaseits holdings for the purpose of providing capital additions at any timeon approval of tne Constituent assembly. Tne Government increased itscapital holdings in the railways by Rs. 42 million in 1950-51 and expectsto further increase its holdings by about the same amount in each of thefiscal years 1951-52 and 1952-53.

The Government has not yet finally decided the way in which itwould apply the proposed Bank loan on this project but its present intentionis to use part to increase its capital holdings and part as an advanceto the Depreciation Reserve Fund. The railways would be required to paythe full rate of interest on any part of the proposed loan used as an advanceto the Depreciation Reserve Fund as well as to increase the Government'scapital holdings, The amount of the proposed loan to be allocated to anincrease in capital holdings and the amount to the Depreciation ReserveFund would be determined on the basis of the railwvays' formula for allocatlingcapital expenditure on the specific items covered by the proposed loan.

VII. Justification of the Project

The PakistQan Government and Bank representatives who visitedPakistan regard the rehabilitation of the railways as a program havingtop priority in the developmF-nt of the Pakistan economy and it is theintention of the government to carry this program forward even if external.financial assistance cannot be obtained. The needs of the railvways foraccelerated maintenance, replacem.ents and additions still exceed those whichhave been programmed to 1953. The program presently conceived appears to bebalanced and an effecti:ve approach to meet. the immediate needs of the railwaysin light of Pakistan's present development plans and resources. Thereforeparticipation by the Bank in the financing of a limited number of items seemsto be justified.

The NRa is at Dresent able to handle all traffic offered but thisis accomplished at high maintenance and operating costs which weill becomeincreasingly higher unless replacements are made. The sitb-ation on the RR-?is even worse and this railway had to refuse freight offered in 1950/51.The rehabilitation nrngram is desiRned to prevent a further deteriJeao+A^nof this situation and vo permit a return to efficient operation.

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Further justification covering the specific items proposed forBank financing follows:

1) Diesel Locomotives

At the present time the tvwo systems have about 1,250 steam loco-motives in service, 487 of vhich are due for replacement as a result ofage and poor mechanical condition, In spite of an accelerated maintenanceprogram over the past several years, the number of locomotives out ofservice permanently and for repairs has gradually increased and a numberof those maintained in service are required to operate at reduced steampressure and speed. The need for immediate replacements ana further inten-sification of the maintenance program seems to be fully established.

The Pakistan railvway systems formerly operated entirely on Indiancoal as fuel. This coal is low grade, high in ash, and its use presentedserious operating problems. During the trade deadlock with India vwhichIaqtpd from September, 1919 to February; 195l. the railways were forcedto import coal from the U.i., Poland and South Afri¢a at very high prices.To couinterant thil siti_ation, an intensive program of conversion to nilfiring has been carried forward on the XjR which has at present over 70%of all loco<motiv fird with oili After March 19Q1j Ti+.h reimpt+ion ofcoal imports from India, the need for conversion to oil burning on the EBRhas been considerably.-r reded in -inr of the su1b tahi-t 1 y lower cost_a of' Th,iacoal to this system. However, conversion to oil firing on steam locomotivres

of oil or coal, the railways have adopted a long term program of conversion todiesel povrer for the, follovniza resons:

f4 N 'n-; -1 'I on L4..A- 1 .. 'V J We_ _ Q

locomotives of the same povfer but due to less timelost6 - -w mi--44- --- 3 -rar.o oge s and4 higher speeAs,about 65% as many locomotives are required for agiven. service. In the case of the Fakistan r*ai1V'aySthis should result in a lower investment for replace-

ment _s arnounti g to aboulsus::4s ~ ~ ~ ~ ~ 1-- CY) 4-o W..C as s w w /

J..,O J _L %WUU JV. yv U4*il 9.5VLLU ' J% J v %J/q .

much fuel as an oil-burning steam locomotive.Thle fuiRd cos'Ls per locomaoOtivne mileu ato 1950)prices have been estimated3 at the equivalentof 36 cen'us for V n diesel locorLotiveS ln pda-senger operation at 60 miles per hour; 50 centsfor oll burning locomot-ves a' 50 nmles per hourand 85 cents for coal burning locomotivep at 50miles per hour, At current prices for Inuiancoal to the EBR, the cost of coal firing operationwould be reduced to about 60 cents as compared withthe 1950 estimate of 85 cents.

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(iii) Diesel locomotives offer other advantages such asuse of one type and model for freight and passengerservice,-which greatly simplifies maintenance andthe stocking of spare parts.. The dead load carriedas fuel is only about 20% of that required by steamlocomotives. Viiater requirements are small and thisis a particularly important condition on the NWRwhere water is scarce. expensive and of poor aualitv.

The conversion to diesel power is being approached in a conserva.-tive manner. On the t-M, 23 main line diesel electric looomotives wereordered in October 1950 wiith deliverv of 2 in September 1951 for pilotoperation, 12 in February 1952 and the remaining 9 in July 152. The rail-ways are now nlanning to obtain an additional 23 main line diesels fordelivery to NWR of wihich 9 ll be delivered by June 1953 and also contemplateadding 20 shunting diesels to the 1l now in the Karachi .'ards to move porttraffic and placing 8 shunting diesels in the Khanewal yards during 1953. Thisi c-QThIil ted tor all olw sniffvr' iGieDt time im for -hep DMT +Eo t.railn a;nri HPvam _n _

ing and maintenance personnel, to install repair facilities and make track:~mnmrovare+tsi+H11 +v h the progsi a8+n of nnr diesel To+got-v T

detailed plans for this programmed rate of conversion have been carefully"avri ...nrl ir b-hnk.l enginr% Yr-an-lr in Pnakis c d ar corl~nsidr to

be technically sound and achievable by the railway system*

The program of conversion to diesel traction on the EER is evenmiore conser-vwat iv It cdtmpae ULthe pr-V..-ouremer1 .L of 5 U:,j ".esel eLectrimain line locomotives by April 1953 and 13 shunting d4esels for the Chittagong

for the main line will follow only after experience has been gained with theo caoot.ives now on oruero

The program of conversion to diesei traction is sound botn tecn-nically and from th, standpoint of investment and o,zerating costs. Therate at which the conversion from steam to diesel traction is scheduled isnow considered satisfactory for both railways.

No technical problems exist in the selection of locomotives forthe N,, since standardu uuzjtgs of the t ype norm1ally" operated on broad gaugetrack can be used. In the case Qf EBR, however, diesel locomotives of thepower required for operation on meter gauge track have niot aeretofore beenbuilt and operated. The plan of purchasing only 5 units for test operationduring a period oIf oso i2 months is soi4nd engineering practice consideringthe special design of the engines ordered. The savings involved, as well astechnical probiems, can be establishea -during this test perioa.

2) Replacement Doilers

To date the replacement of boilers has not been a critical problemon the NWR wfhere the availability of adequate repair facilities has permittedthe reconstruction of boilers in the shops operated by the system. In thecase of the EBR this has not been possible due to lack of suitable repair

facilities and an increasing number of locomotives are being taken out ofservice due to boiler failures. The situation is aggravated by one groupof 75 utility type locomotives obtained during the war, 30 of which are nowout of service due to lack of replacement boilers.

Reconditioning and replacements of boilers in stcQan locomotivesis essential maintenance and is generally required ahead of replacement ofheavy mechanical parts. It is obviously good practice to make boiler replace-ments on locomotives which are otherwise in reasonably good mechanical con-dition. It is felt, therefore, that this item is sound both technically andfrom an investment standpoint. The number of boilers to be purchased in thecurrent program appears to be on a very conservative basis in view of theindicated requirements,

3) Carriages

The Pakistan railwvay systems now have 3383 carriages in serviceof vihich 2513 are on the iNR. Viith few exceptions these carriages are allof wood body construction and are generally in bad condition due to heavyservice requirements during the war and in the nosttPartition neriod. Theircondition has been further aggravated because of almost complete lack ofmaintenance during and immediatelv following thA war. On the hasis of apeand condition 43% of these carriages should be replaced as soon as possible,

Both of the railway systems are repairing carriages of the woodbody trne b,t diin to shortage of' siiitabhe ood in Pakistan it. has not been

possible toimaintaip suitable repair schedules. VIith the obsolescence ofrwood hodTy passegner cars throughont the world, the entire prob'em of t=hebest type of passenger coaches for use in Pakistan has been studied in detailabroad hy a technical mission with the cor.eluiorn that thesl lstandardize on the light vreight pressed steel type of car novw in generaluse in Europe. This Qonclusion appears to be sond 'from atechical1 sanod-point, particularly in view of the contemplated conversion to diesel powersi n .c i + vwril 1 j re 1 ca ir le i eih+ vri +th I n-r- mni 1+eavsrce -ct!- and greater

safety of operation.

The present railvray program provides for the replacement of 1432n r-ri -q cTa es 5 r h2ve b div'n. een ordered and are ti bde ve.yr-e drl rll

1952. An additional 197, for which Bank financing has been requested, areto be o-rdenord nanan"+l r Inrl i A11T :-t- iOO Aiiw4 ,r 193 0 rM'Vbh

new carriages vill replace less than 1/4 of those regarded by the railwaysV. S .L4 . ..J ~j4~ ''Vl+4 % 44W~ -

4- r4- 44 V S.1 U V .4 I J VLJLJ-..

1.3% during the past 10 years. Replacement in the amount and type of car-r i Cages ar,d- on thlle s,clhedl 'e con+emprlated seemns tec,.l-T orIal'ly aon. arnA,d i8

regarded as necessary.

4) Wiagons

The Pakistan railways have about 39,700 wagons in service,about 24,SOO of which are on the NIMLR. Of t is total, it is claimedthat about 10,000 wagons are due for replacement as a result of ageand bad condition. Though an intensiye repair program is in progress

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on both- systems, replacemonts riust be started imediately if a serioussliorta.e is to 'ue avoided in 1954 and later years*

The rLuiber and type of waLons required btj the rail;,ays havechan-ed considerably since Pa,rtition due to a different traffic patternand dem6an. Increased exports of jute throu,lh Chittagongl have requireda large number and proportion of jute wagons on tihe EBR. Increasingnumbers of cattle wagons are recquired on ithe i'gJR system anel of tank andgeneral goods wagons on both syrstems.

'hile a detailed analysis of traffic patterns on the twosystemiis is not available t1he present pro-rarmi for the replacement ofwagons appears zppropriate. The present railway program provides forthe replacement of 4373 EG wa: ons and 122 I;G iwaL,ons on the 1Th.R systeraald for the replacement of 3138 iO, and 1000 EG wagons on the CBR system.These war-ons are scheduled for delivery in a fairly uniform rate clistri-buted over the hlree years of the progran. This program has been care-fully examined and is found acceptable on the basis of the dem:lands placedupon the railways.

5) Shop Equipment

In a distribution of shop facilities betwieen Inc'ia and Pakistanas a resiilt of Pnrtiti'on; the nnrtion nf tjip i'ITR in inki.san rrinJns

adecuately provided with shop facilities. The ER hoever, has suffereda severe Th'rtag;e nf these facilities due principanlly to til fact thatthe mnain shops of the old Eengal-Assam railway in KIanchurapara are now inTnd~i -n

T'hP -.ro-fTui.C;n on f _-rrlmnf+.r .qh^-r f . ;+;>Cfn .hn A;r+PnPT- r,ilT -- -r~i te.onacli -ortb.*"of existing and new equipmient including, diesel locomotives is a top pri-ority itr i;- tl.e rail,-ay r'a1b4+ 1+-T+ n proc It is ui.t vn+ r.nec=essasy thlat tihe new IKarachi daesel shop nolT under construction be equipptd

4vV sewice <.d reiai- disel l aomotSrCs ar,d thlat tLC> rLaLarLt 'iL.L GM e~~ ~~A- ~ ~ _ OJV64-6 ,V U.LV QSJ L4 VI 4uc. 4 61UjJ

equipped to service and repair cldesel locoraotives and otlher rollin stockin i YirlinCr " fVtl nr o'V'i IC fi)h ¶ ;n ErV~ +d-h A; n -hrs,- 4

Karachi lhas been ordered and tlhe items of equipment are reg,arded as appro-priate. neralsIhop etiv,e.<for 'Pabar+ a' J .ch-,a cosdered ob

urgently needed two years ago has not yet been ordered, neitlher have ordersbeen place%d Lo Viip 41esel 1;X!< qu-piVVt, h. r.Latte WUtas 1 been Qrou6,to thie atterntion of the Goverimient which has decided to talce iariediateproo oremIIen. ac'i..

6 ) b _eeerers

Tracl; maintenanrce shouic be retarded as aiother top priorityitem in the railway progran. ,ithout satisfactory roadbeds, the efficientuse of new and existing locom-otives ane' rolling stock cannot be reaiized.due to the limited speed at wrlhich trains can be operated. T'oor road-beds contribute to hi,h rmiaintcenance costs on rolling stocik ancd are ahazard to safe ol,eration.

- 13 -

Reports by Bank representatives resulting from field investi-gations indicate that the tracks on the NlTR are in fair condition butthat those on the EBR are in poor condition due to limited maintenanceduring and folloting the wvar when sleepers, rails and ballast could notbe obtained in adequate quantities. The program for sleeDer renewal in1951/52 will be fulfilled only by about 70% on the EBR and 45' 0 on theN.'ZR because of lack of fittings for the steel sleepers now on hand.

However, WriR has already rehabilitated almost the entire trackbetween Peshatwar and Karachi over vwhich diesels will operate and EBR willcomplete the rehabilitation of their portion of the track to be dieselized.by the end of 1952. On the basis of the sleepers now on hand and ordersplaced or about to be placed the railways should be assured of a sufficientsupply to meet their requirements over at least the next 18 months to twoyears.

VTTT.. Orranization of the Pakistan Railiwavs

The armniniqtrntin qnrl mTnncPmPn+. nf t.hp Pakistan rnil..rwvqis the responsibility of the Railway Division of the 11inistry of Com-munication-q. This division is headed by the ATirector Gneneral of Railw ayswith 4 sub-directors of Mechanical Engineering and Store, Traffic, CivilRngyi naori ndr A dm.ni ii a+.ir*-ni, Ir - n addtiorvr.n +to the vi Gnrl (W.,fn"4 '7n+4 ,

each railway system operates as conventional railway establishment with4+o ^rm rInvinff"n 'Tnvnnrn- rhlinr 'W"rr4mm"- A -+lnn -- r;r n^^

similar to the railways in the U.S.

A number of British personnel still maintain their positionsVIS' 'S*I AJ .fU *...JV .J.S4 'J G44JC U 4¶U -..LStI. '.AU * U, ~ WWAJ.. 401 4 UU

Pakistani and foreign personnel are considered to be competent by BankrepresentE at-ives wV-Vhlo ha-ve b een Jln contact vr te.LV

Alt Vhe p.eser.t tdLLr t+ Ce14ntrUaL AUULLJ.&"0bio.L..Lu11 has a total of*212 employees. The NvWR has a total of about 93,400 employees while the

em-- about An onn . Bth ralway .- tes are a t -st-Af

with management and operating personnel who are considered to be competent.,Thr is ho'JUZe er, aL14 shrvg of L.J Ruev-s pesonr,el of the~ foU±ia ar.d

inspector classes.

It is the impression of Bank representatives that, in some respects,acco-u.istlng, piurchai IIUng, and r-tpUov.i1g proc-utue couQ Ub changed to advant,agewith the elimination of a considerable amount of red tape. This is particularlytrue of the procurement procedqres which require up to 6 months to clear apurchase order originating in one of the tVwo systems. In at least one case,

equipment urgently needed for the EBR worksnop a'nd requested morq tnan twoyears ago has not yet been ordered. This problem has been discussed with theGovermnent who are now taking speqial procurement action with regard to theEBR shop equipment.

- 14 -

IX. Recommendations

It is recommended that the Bank consider a loan to Pakistanfor railway rehabilitation in an amount of $279 =iilion to cover thespecific items listed on page 6. On the basis of the anticipated usefullife of the equipment to be purchased, a term not exceeding I' years isindicated.

In negotiating a loan on this project, the folloving should betaken into consideration:

1. That the Bank be satisfied as to the suita-bility of equipment for the repair shops andof the arrangement of these shops prior tostarting disbursements on this item,.

2.. That the Railyways make suitable arrangementsto replace sleepers at the rate of 700,000per year for normal maintenance and an addi-tional 50.0Q00G per year for the next 6 yearsto make up arrears.

E_ iayne Rembert

TABLE IGENERAL STATISTICAL DATA

(1949-1950)*West Pakistan East Pakistan TotalArea in square miles 310,000 54,000 364,000Population (1951 census) 33,568,000 42,119,000 75,687,000Density per square mile 108 780 208

Pakistan Railways North Western Railway Eastern Bengal Railway TotalTotal track mileage 7,540 2,550 10,090Passenger revenue miles 3,685,273,000 1,567,800,000 5,253,073,000Number of passengers carried 68,004,000 50,318,000 118,322,000Freight ton miles (revenue and non-revenue) 1,807,291,000 519,321,000 2,326,612,000Freight tons carried (revenue and non-revenue) (1) 7.491,000 3,341,000 (2) 10,832,000Average.length of trip per passenger, in miles 54 31Avera'ge length of haul per freight-ton, in miles B.G. 254 157

-M.G. 58 163Average number of engine-miles per day for froLght locomotives B.G. 76 87M.G. 85Average number of engine-miles per day for passenger locomotives B.G. 120 129M.G. - 130Average wagon turn-around time, in days B.G. 10.9 11.9M.G. 10.9 9.3Average load per wagon, in tons B.G. 12.9 10.3M.G. 5.77 6.19Number of locomotives owned 830 418 1,248Number of locomotives in service 700 30710Number of coaches in servicer (3) 2,5I3 803,Number of wagons in service (in terms of 4-wheelers) 214,742 (4) 14,.078 (5) 820Number -of emplToyees 9,3i 6 59.791_ 153.187Route mileages - Broad Gauge 4,561 498 5,059i4eter Gauge 319 1,102 1,421Narrow Gauge 482 I9 501

5,362 1,619 6,981Gross revenue (R9s.) (6) passenger 99,791,000 54,038t000 153,829,000freight 12U,680,000 56,354,000 181,034,000miscellaneous 8.550,000 10,587.000 19,137.000

Total A. 233,021,000 120,979,000 354,000,000Expenses including depreciation (Rps.) B. 185,616,000 94,868,000 280,484,000

Operating ratio (B divided by A) in 6 79.5 78 79

(Footnotes on next page)

* Traffic figures April 1949 through March 1950; average figures for the sane reriod; tons used are metric tons (1 ton - 22410 lbs.)(1) Includ.es tons transshipped to and from broad-gauge and meter-gauge lines (duplications).(a) Includee roughly about 1.5 million tons moved to and from Chittagong Port.(3) Includes upper and lowrer class passenger carriages, brake, postal, luggage and miscellaneous coaches, and dopartmental carriages.

Not included are carriages in depots, shops, alvaiting renairs and reported as missing after inventory.(4) For 1950.(5) Zor 1950-51. the number of wagons in service in 15,731 because a large number of M.G. wagons have been repaired and returned to service,(6) 1 U.S. Dollar equals 3.319 Pakistan Rupees.

TABLE II

PAKISTAN RATIh,AYS REHABILIThTION PROGRA.MADDITIONS AND REPLACEMENTS

Budget Estimates - in Rs. 1000

TotalItems 1950/51 1951/52 1952/53 For Three Years

Locomotives EBR 5,375 11,137 5,437 21,949NWR 4,o86 10964 10.495 25,5L5

Boilers EBR - 4.1h4 1.829 5.973NWPR 350 475 630 1, 5

Carriages EBR 3,390 3,390 15,387 22,167N,UR 8,309 9.15L 15.999 3;4b,62

afagons EBR 10,287 27,21±3 8,215 16,7h1WIR 2,434 15,952 18,161 36,54'7

Ferries EBR 9,350 2,050 1,360 12,760

Machinery EBR 1,815 4,531 13,805 20,l5:l

Bridges ap2,092 1,016 711 3,82:LNWR 618 i,154 910 2,682'

New Lines EBR 5,050 3,306 2,652 11,008~ ~ ~'DD 2 AlA 1.N= n nfri on AM

TPr a ck R e n emrml BR 306 1l14934 6NVlR 19,529 30,255 34 ,884 84,668

Other Eng. Wiks. EBR 11,596 18,300 14,432 44,3?8

II OAnlm 8,4fo 1'v6r9 _107 129,52:,

%Jal W 'LQ;/ J.ff 'e1 QJ97 186%a1'f4.L1 'L4,84vu2

1/ Does not include the development of the Port of Chittagong, credits-for -- f- --or of sosanA sto4 s - euuctor by U- sibr 0_--A__Ass.and.& .%J. " CIJi.JJ. ' Jcrdt to.ULk iLtem VUtae fr.Louumw ibbLorey

and credits for items taken from inventories.

TABLE III

BUDGET ESTIMATES OF REVENUES AND EXPENSES FOR PIAKISTAN RAIL`AYSFOR THE FISCAL YZAR9 1950/51, and 1951752'

Sub Heads l~~~~~~FigMs in thousands of ruLpees).-Sub Heads

E. B. Railway N. Ii. Railway TO T A L

Revised Budget Revised Budget Revised ]BudgtEstimate Estimate Estimate Estimate Estimate ]3stimate

I, 0101=7C '14ORKINU1950-51 1951-52 1950-51 1951-52 195o-51 :L951-52I. OHDINAHCC L951-52N

EXPENSES, -

Administration-Railways 15,1425 14,734 20,911 21,081 36,336 35,815Do. Accounts 1,936 1,878 3,853 3,828 5,789 5,706

Repairs & Mlaintenance 35,102 45,465 66,356 63,384 101,458 1L08,849Operating Staff 22,627 20,548 31,631 31,247 54,258 51,795operation (Fuel) 23,310 15,938 52,835 49,668 76,145 65,606Operation (Other than Staff

and Fuel) 5,160 4,796 6,279 4,307 11,439 9,103Miscellaneous Expenses (-) 2,482 2,924 7,o46 8,866 4,564 11,790Amenities to Lovwer Class

Passengers and StaffWelfare WJorks - 1,500 4 1,500 - 3,000

Total I 101,078 107,783 188,911 183,881 289,989 291,66-4

II. IIISCELLANEOUS EXPENDITURE:

Payment to WJorked Lines - - 173 161 173 161Land - -

Surveys 12 16 142 183 154 199Pensionery Charges - - 105 26 105 26

Total II .12 16 420 370 432 386

III. Director General of Railways - - 662 792

IV. Financial Adviser Conmuni- - - 200 20Lcations

V. Government Inspector of Eail- - - - - 48 63ways

VI. Audit - - - - 114 454

Total - III to VI - - - - 1,024 1,513

VII. Appropriation to Depre- 6,124 13,333 14,235 26,667 20,359 140,000

ciation Fund

VIII.Interest Charges 12,678 13,706 27,884 28,073 _40,562 141,779

Total - Jorking Expenses 119892 1334,838 231,450 238,991 352,366 375,342

IX. Gross Earnings 108,292 121,100 270,000 270,000 372,180 3831,280

X. Suspense 100 14,137 3,600 5,OCO 3,700 _9,137

Total Traffic Receipts 108,392 13237 273,600 27510C0 375,880 ()o,il

XI. Misc; Receipts 69 - 1,020

XII. Gross Receipts 102,349 125,417 Z14,620d 275,000376,962 4CJ,~L

Surplus (17,543 - 91421 +43,170 +36 009 +24,603 +25,o75

Deficit (4

N. 'NORTHWESTERN AND EASTERN BENGALRAILWAY SYSTEMS - PAKISTAN .-

RAILWAYS /

BROAD GAUGE (5 6 DOUBLE TRACK 'I JAMMU 8 KASHMIR

BROAD G,AUGE A5G") SINGLE TRACK ' /

-METRE GAUGE -SINGLE TRACK I f

NARROW -AAL,4R) QMi,TE.U J

0 50 100 150 200

MILES

gYNu,. -KERWAL ' J ELU

NORTHWESTERN RAILWAY GWEST PAKISTAN

\ RNAR '/ % > EASTERN BENGAL RAILWAY< / \> , { / \ ~~~~~~~~~~~~~~~~~~~EA ST PAKIS TA N

I~~~~~~~~~~~~~~~~~~I

- D TTAGO .- GUN , C

HA X \ CALCUTTA | j

w } ,'. -- ~~~~~~ - 9 11