LAHORE: The first joint venture of the Pakistan Railways under the private-public partnership reached the inevitable conclusion with the PR authorities taking over control of the Business Express on Wednesday.

“We have taken over (the Business Express). From today, the railways will also be responsible for its commercial management and passenger facilitation,” said PR Chief Executive Officer Javed Anwar.

Railways neither have any intention to discontinue operation of the train nor any proposal to hand it over to some other private company. “We intend to operate it ourselves,” Mr Anwar told Dawn.

Lahore Divisional Superintendent Waqar Shahid said that the railways had already been looking after the operation of the train -- providing rolling stock including locomotive and passenger coaches along with crew and guards -- while it would also provide catering services to passengers from Thursday (today).

Mr Shahid advised the commuters to buy tickets, get parcel and other luggage booked from the railways staff already deputed at all the offices previously held by the company.

The private company operating the Business Express owed more than Rs2 billion (Rs2.2bn) to the Pakistan Railways, which had many a time sought clearance of all dues but to no avail.

Under the agreement, the private company had to pay Rs4 million daily to the railways but it had been paying Rs2.2 million per day. The company did not respond to Oct 21 notice of the railways administration to clear the dues and start paying Rs4 million daily.

“Under these circumstances, the PR was left with no option but to take over in order to safeguard the interest of our passengers. We will also look after the interest of passengers who have already bought tickets of Business Express,” he said.

The PR and M/s Four Brother International (Pvt) Ltd had on Aug 18, 2011, entered into an agreement relating to commercial management and passenger facilitation of Business Express between Punjab and Sindh capitals.

Subsequently, an addendum signed on Jan 9, 2012, amending certain clauses of the contract formed a formal part between the two parties. The then prime minister, Yousuf Raza Gilani, had on Feb 3, 2012, formally inaugurated the Business Express operation at a ceremony at the Lahore Railway Station.

According to the terms of the agreement and the addendum, M/s Four Brother were required to pay the PR a daily journey fare of Rs3.190 million or the minimum guaranteed money as well as invest an amount of Rs225.786 million as value addition to passenger services.

A schedule detailing the amount of Rs176.307 million investments made by the company was given to the PR. However, a committee of five deputy principal officers of the PR acknowledged that Rs67.226 million might be considered for investment subject to verification.

However, the company never met its financial commitments from day one. At the request of the company the matter was referred to the ECC on May 16, 2012, which decided that the new minimum guaranteed payment would be Rs2.2 million. The ECC decision was implemented with effect from Jan 1, 2013.

A moratorium of six months from the date of implementation of the ECC decision was also implemented, allowing for payment arrears by the company.

Furthermore, the company approached a civil court for appointment of an arbitrator so as to initiate a long-drawn-out litigation. The civil court accepted the arbitration plea of the company but the railways challenged it in the Lahore High Court.

The Railways had to approach the Supreme Court as the LHC upheld the decision of the civil court. The Supreme Court set aside the decision of the LHC.

Published in Dawn, October 29th, 2015

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