ISLAMABAD: The bankrupt Pakistan Railways management has pulled off the mother of all deals with the NLC, while the army is working hard behind the scenes for an equally big deal with the United States.

In the first week of February, railways signed a deal with the military-run National Logistics Cell (NLC) under which the cell will repair 30 railway locomotives of which 15 will be returned to the railways to use. The other 15 will be used by the NLC to carry freight booked by the NLC.

What does the NLC get out of this deal? This was a question that proved hard to answer as the NLC and the ISPR never bothered to reply to any questions despite a weeklong wait.

However, Dawn has learnt that the military is gearing up to earn big bucks from the transport of US/Nato/Isaf supplies via Pakistan’s land routes in the near future and this is what is behind the NLC deal with the railways.

In fact, negotiations between the Pakistan military and the US started as far back as 2009 for a share of the transport pie that has earned many individuals and companies in this country millions since the start of the war in Afghanistan over a decade ago.

A source within a transport company that carries military supplies to Afghanistan confirmed that trial runs were carried out at the request of the American government in 2009 and 2010; from Karachi to Peshawar and from Karachi to Chaman to not just see if the rail routes worked but also how long the journey took. “The journey to Chaman took seven days which was an improvement on the trucks as the increasing number of FC checkpoints was causing delays,” the source said.

It now appears that while the US waits for the parliamentary review of bilateral relations that was ordered after the Salala incident, behind the scenes the two sides are negotiating the terms and conditions for transporting Nato and American supplies to Afghanistan.

An official in the Foreign Office confirmed that the Americans, Nato officials based in Afghanistan, the NLC and the Foreign Office were working out some plan to use the railway for supplies to Nato forces in Afghanistan.

The recent trip by the newly appointed ambassador to the US, Sherry Rehman, to Pakistan was part of these negotiations, the official said.

This, however, is not the only price that is being demanded. Fees to use the roads as well as a charge at the port may also be negotiated.

The bi-partisan and bi-cameral Parliamentary Committee on National Security has also demanded that a fee be imposed on Nato trucks using roads in Pakistan as well as charging them around Rs30 billion for the repair of roads.

There is a third fee that may also witness a hike once these negotiations are over, although it is not confirmed.

At the Karachi port, goods for Afghanistan are charged at the rate of Rs15,000 per piece, while goods that have arrived from Afghanistan and are on the way out are charged Rs20,000.This fee was imposed in 2010 before which the NLC charged Rs5,000 per item for goods on way to Afghanistan. One reason these negotiations have become so important is that the country is trying to thrash out a deal where none existed to begin with.

After the 9/11 attacks and the quick decision of the allied states to invade Afghanistan, Pakistan could not negotiate any terms, monetary or otherwise, for the movement of US and Nato supplies through it.

As a result, the US reserved the right to choose the companies for the transportation of its supplies.

For Nato/Isaf and British military supplies, the NLC could select or nominate companies.

As a result, Pakistan was used as a route without the state making any money from a business that was worth big bucks.

Over time, Pakistan’s land routes became an important part of the war effort.

According to one estimate, the American supplies constitute about 70 per cent of the goods transported through Pakistan.

US Transcom Commander Gen William Fraser testified this year that “in 2011 more than 35,000 containers were delivered” through Pakistan.

When US embassy’s spokesman Mark Stroh was asked about the deal between the NLC and the railways, he said: “We are aware of the agreement but since the ground shipping lines remain closed, the effects of the agreement with regard to our shipping remain to be seen.”

However, observers say there is a chance that the Pakistan Army will end up with some share of the pie as no other route is as economical as the one through Pakistan.

At the moment, the Americans and the allies are flying in supplies but this is expensive. In addition they are using the ‘Northern Distribution Network’, a variety of routes across Central Asia that originate in Europe.

According to a report by the US National Public Radio, these routes cost “two or three times as much as shipping them by sea and moving them up through Pakistan”.

And the impending elections in the US and its financial constraints may be important factors influencing its decision, especially as the planned drawdown in Afghanistan may mean an increase in the supplies leaving the country.

In this regard, the Salala incident simply provided an opportunity to the army to increase its leverage on the issue.

It now remains to be seen what the outcome is and what the army ends up with.

At a time of dwindling aid and assistance from the US, ‘Rawalpindi’ may just strike gold with the NLC and the war in Afghanistan.

The NLC-railways deal

•    The agreement was signed between Railways General Manager (Operations) Saeed Akhtar and NLC Director General Maj-Gen Junaid Rehmat at the finance ministry on Feb 8.

•    The NLC will finance the repair of 30 locomotives at railway workshops.

•    The repair will cost roughly Rs500 million which will be paid by the NLC initially and will be reimbursed by the railways within two years in the form of rebate to the NLC against normal freight charges

•    According to the railways GM, the repair will be completed in eight to 10 months.

•    Of the repaired locomotives, 15 will be used to carry freight booked by the NLC, while the rest will be utilised by the railways for passenger and freight train services.

•    The three-year agreement can be extended.

•    The finance ministry has also allowed the NLC to purchase coaches and locomotives from the railways and to import coaches from South Korea and the US.