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This report is restricted to use within the Bank.

INTEIRNATIOWAL BANK FOR RECONSTRUCTION AND DVVETOPMENT

PROJECT REPORT ON THE REHABILITATION

of the

NORTHWESTERN AND EASTERN BENGAL RAILWAYS

K- "LX.A 9lA v

March 20, 1952

Loan Department

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PROJECT REPORT. ON THE REHABILITATION OF THE NORTHIESTERN AND EASTERNBENGAL RaIISAYS "PAK15TAN

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 whichhas been submitted by the Pakistan Government as a possible project inwhich the Bank might participate. 'The 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 bythe Government of Pakistan in the summer of 1950, supplementary materialsubmitted by the Pakistan Delegation to the Bank 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 1952.

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

TTI Railwyv Development Program

As a rulft of Par+itn Pakistan has two isolAated rai-waysystems,.each being parts of systems which now lie in' both Pakistanand India. Ahei+. Pthirds of the original Nthestern P!24a iesin West Pakistan while about 46% of the old Bengal-Assam Railway liesin Eas- Pkstn. The portion - ofJ hJe6 A

Pakistan has been renamed the Eastern Bengal Railway.

The portion of the Northwestern'Railway now in. Pakistan has a-rou-ite milenae o%f362IA9nt n track le e of 7, C itn g of% +- bkoAdmeter and narrow gauge tracks. The Eastern Bengal Railway has a routeYmilegnft_ _ bou 1 ,660 ' it aboKn 2s14+0 tac mile -lso mad up , ofhreseparate gauges.- Of the three gaugep, the NW is predominately broadgauge while t,he ER is principally meter gauge. 'This4 ditibto orailway facilities has resulted in a serious disproportion between trafficand exsistimag I&r-ansport facilitiesp par-icular- si-- 4h.tafi'pkt-in East Pakistan has been substantially altered in order,to utilize portswhicha- were not of greaU impo14 ae AU ior%;4 to.xPartitiV.on.* BoUh systemvs ;ha%vVsuffered badly from lack of maintenance during and following 'the war withrespect to bUL41 A40rc IZIU ling stoc. AvCKO the U iS- U. Par1i=ion,important maintenance facilities of the EBR were lost to the Indian Rail-ways and those remaining were badLy damage.' As a result of this situationsa rehabilitation program has been established for each of the two systems.,the objectives of which are to complete all maintnance work oil track andequipment which has been deferred;:to make the necessary additions and

replacements to locomotives and ro4.ling stock3, a to provide additionalshops and repair facilities for proper maintenance of the systems&

In the three years 1947-48 through 1949-5o the rehabilitationprorram involved some reconditioning of track butU only at a rate of about,half of that required for normal maintenance. Repairs to locomotives androlling stock were stepped up, but in spite of this effort, an increasingnumber of engines, and cars were lost from service* During this period noreplacements of locomotives and rolling stock were made and little 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 195)-12and 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 repair4 Also, the railways 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 railway 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 year in which budgeted, and therefore appropriates funds in only theamount that is expected to be actually expended during the fiscal year.Such ap>roriations amounted to Ra, 90 million in fiscal year 1950-51, toRs. 119 million in 1951452 and are expected to amount to Rs. 120 millionin 1902-0

The estimated breakdown between lotal currency and foreignexchange in the capital additions and replacements budgets of the rail-wavys for the thre vears endin7 19q2-q3 is as follows:

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

Locomotives 47,94 ?,371 45,123Boilers 7,428 372 1/ 7.,056Carriages 55,629 11,126 44,503Vagons 82,292 16,459 65,833Ferries 12,760 2,552 10,208Machinery 26,724 8,018 16,706Bridges 6,503 4,552 1,951New Lines 31,012 15,506 15,506Track Renewals 111,166 33,350 77,816Other Eng..Vorks 73,051 51,696 22,155

Total 2/ 454,859 146,002 308,857(136,58,000) ($3,801,000) (,92,h57,ooo)

The foreign exchange component of this program amounts toapproximately two-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 railways 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 respectively, In each year- theamounts allocated for maintenance and repairs amount to 29% of totaloperating expenses and this 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 equipment involved are definitely required for effici-ent operation and the quantities of locomotives, carriages and otheritems are not considered to be excessive in terms of the actu"1 need.This is also true of shop equipment and track repair materials hich,sbouldhave top priority in the nrogram.

The railway rehabilitation program must he continier foranumber of years if deferred maintenance and necessary replacements areto be effected. Since the financing of the railway progranm is subjectto annual appropriations, no detailed program beyond that for the fiscalyear 1902-3 has been formilated and no funds have been authorized It

is, therefore, not possible to estimate the total investment which will

lbe made w currenta n nDoes not include the development of the Port of Chittagong, creditsfor operation of shops ard4. storep reductiopp by Constituent Assemblyand credits for items taken from inventorles.

be made in -Wh-e railwVY-ays othtierequir-ed ocmpete h program.

Based on the average age of the equipment and the condition of the tracks,it seems tha an adi3i oal inv n at les e 4aL kou kjLtat aUVoied.LUin the two year period 1950-51 and 1951-52 must be-invested in the nextfour years to bring 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 railway 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 8 shunting locomotives for ihanewal.The main line locomotives will be 1400 hp eachof which 23 will be passenger locomotives and 9freight locomotives. The shunting locomotiveswill be 660-750 hp each;

(b) EBR - Diesel equipment for the EB3R is limited,at this time, to the purchase of 5 MG 1400 hppassenger type diesel electric locomotives and

13 MG 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 theMIR,,it is proposed that 2 replacement boilers for BG locomotives befinanced by the Bank and of the program for the purchase of 99 boilersfor EBR it is proposed that the Bank finance 10 replacement boilers forMG locomotives.

(3) Carriages

It is proposed that the Bank fir4ance 1?3 BG carriages and 12MG carriages for replacement of overaged stock on.the N.A, system and 62MG carriages on the EBR system.. The carriages for both railway systemsare predominantly third class of modern pressed steel construction.

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(M) nagons

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

(5) Shop Equipment

It is proposed that the Bank finance special diesel shop equip-ment, including travelling overhead cranes, for both the Karachi workshopon the NVR 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 railway 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 railways currently 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 W1R and the 10,000 special size woodsleepers for the EBR purchased in the U.S. They will 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 Bank Firncing

(in $52100031 Diesel electric locomotives,

including spare parts(a) 23 broad gauge main line 5,280 993 4,287(b) 9 broad gauge main line 2,00 - 2,200(c) 5 meter gauge main 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(a) 2 broad gauge 62 - 62(b) 10 meter gauge 207 207

3 Carriages(a) 123 light1- steel biroad gaue 630 - 6,300l

(b) 74 light steel meter gauge 2,600 - 2,600

4 Wagons

(b) 170 BG,low gondolas 490 490

(D) li-01 6u1vG' hig godoa 177( 102 BG open-end gondolas 30 -340

5 Diesel Shop Equipment

(b) Pahartalj Shop 450 -45

6 Sleepers(a) 6U,000 special size wooden U9 -6

7 Unspecified 685 - 685

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 10% allowance has been included for the 23 BG mainline diesels ordered in October 1950, and for the 9 additional BG main linediesels.- The estimated cost includes only the portion of freight and Insurancewhich is payable in dolars since freight and insurance in other currencies willbe met out of Pakistan's own resources. The cost of the diesel locomotives in-cludes spare parts and special tools estimated to be required during the firstthree years of operation.

It is believed that the estimated cost for the above items prrpbsedfor Bank financing are reasonably accurate 4nd 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 placed or are About to be placed is as folLoTqs:

DlivervNo. Item Start Finish

1 Diesel electric locomotives(P) 23 Pr main line tambr 191Z1 tilir 1Qf9

(b) 9 BG main line - June 1953(c) S MP, main line June 1943 Jne 19C(d) 28 BG shunting April 1953 December 1953(e) 13~ IVT shunting APrl 1953 lAugust,4 1953

12 Broad and meter gauge Delivered

3 Carriages(a) 123 I-brAd gagnpel193Otbe 93(b) 74 meter gauge April 1953 October 1953

4 uagons(a) I 7 V M4rl jU-te wagons -Arl19(b) 322 BG wagons - February 1953

5 Diesel Shop Equipment(a) Karachi Shop October 1992(b) Pahartali Shop - January 1953

6 Sleepers60,000 wooden October April 1913

VI. Nethods of Financing

It is planned that the financial requirements of the railway programwill be provided from the folloing sources:-

1) Depreciation Reserves

The Pakistan Railways started operations after Partition with a nilbalano in their Depreciation Reserve Funds.. Since Partition the railwayshave been diverting annually from tleir earnings into the Depreciation ReserveFund an amount equivalent to 1/60 of the captalisation of the railways at theend of the preceding operating year, or approximately Esw20 million per year.The Government permitte the railways to allboate an additional Ra.20 mion fram

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earni ngs to c he ^ eprciation Rneser=ePivnd in 1919 ndr i. exnpedt

make similar authorizations in subsequent years if demands on the ReserveFund exceed 4ts rercess Al-o +th Government has Ibeen aak n a-rp r-* - a w .J u w %.sJ W ..,' ' A IU Ii.J Uu,uL 10 AO;A V.1aF±1 vkw JjU c

tions annually from its general revenue to the Reserve Fund to cover theamoun U W4hat Vh.6deedpog-reams chaageabiLe to the Fund is in exes ofLhe

resources of the Fund To date, however, the railway program has notre- re the±~ 1I- e-V e F -~U.A -6- .LOW I 0-JJ A---I 14 L~IU 1 1 .J~ UA4- JU ± JX±required -- % e Reserve FundAV A'& o drawv on 1:th-ese appropriautions bY the, GovernmenIIV,

2)1 Increase i-n c2pital

The Central Government is the sole owner of the railways' capitaL.which was carried at Rs, 1,246,196,000 on March 31, 1951 and receivesinterest on this amount at the rate of 3#257. The Government can increaseits holdings for the purpose of providing capital additions at any timeon approval of the Constituent Assembly. The 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 railways' formula for allocatingcapital expenditure on the specific items covered by the proposed loan.

VII. Justification of the Project

The Pakistan 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 railways foraccelerated maintenance, replacements and additions still exceed those whichhave been programmed to 1953. The program presently conceived appears to bebalanced and an effective approach to mee. 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 NIR is at present able to handle all traffic offered but thisis accomplished at high maintenance and operating costs which will becomeincreasingly higher unless replacements are made- 'The ination nn the TRis even worse and this railway had to refuse freight offered in 1950/51.The rehabilitation program is designed to prevent a further deteriorationof this situation and to 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 two systems have about 1,20 steam loco-motives in service, 487 of which 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 railway 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 whichlasted from Sepntember_ 1919 to Februarn- 19l. the railways were forcedto import coal from the U. ., Poland and South Africa at very high prices.To counteract this sitmation, an intensive program of conversion to nilfiring has been carried forward on the NiR which has at present over 70%of all locomotives fired with oil. After March 19l, wi th resumption ofcoal imports from India, the need for conversion to oil burning on the EBR

~~~1 A .-n 1 V-, !, "' oll-t+~ 1 2h+ ~ r lnurn, e-^a+- r%-P -.-ninnhas been considerably reduc-ed in v-yinr of the subSta-tially loe csofndAncoal to this system. Howevers conversion to oil firing on steam locomotives

of oil or coal, the railways have adopted a long term program of conversion todiesel power fox bhe followinag mesons:

J.J U.U VJ. J_U%,U VLVVQ .. WQU C~ L%VUV "I/ JU.JV UZICOU DVC4

locomotives of the same power but due to less timelos-l for ma- enne longe--r runs and higher speeds,about 65% as many locomotives are required for agiven service. In the case ofL Vhe Pakistan railwYsthis should result in a lower investment for replace-ments amnounti ng to about15.

(ii) DN;il locmotve Cosueabutn to A0W ask A. J.L OWJ. J1_V'W.JUUJVJ.V . y v U4*w 9.J1.LLU 'J% 5.. _%J/q .

much fuel as an oil-burning steam locomotive.Ihe iel costs per locomotive milU aw 1990

prices have been estimate4 at the equivalentof 36 cents for twin diesel locomotives in pas-senger operation at 60 miles per hour; 50 centsfor oil burning locomotives a' 50 miles per hourand 85 cents for coal burning locomotives at 50miles per hour, At current prices for Indiancoal 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. Vater requirements are small and thisis a particularly important condition on the NWRwhere water is scarce. expensive and of poor quality.

The conversion to diesel power is being approached in a conserva-tive manner. On the NtYi, 23 main line diesel electric locomotives wereordered in October 1950 with delivery of 2 in September 1951 for pilotoperation, 12 in February 1952 and the remaining 9 in July 1992. The rail-ways are now planning to obtain an additional 23 main line diesels fordelivery to NWR of which 9 will 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. Thisis calm1culad ton qllow iiffi-ient tI.ime for the DN..R +to train a;nrd dOpval o pera-

ing and maintenance personnel, to install repair facilities and make trackumirmn i +he progre arliti+ n of nn riesel loco^otives Then

detailed plans for this progranmed rate of conversion have been carefully"eviewed by .. P-ankr engine a rcntly rin Pakrian ndrl are ons to

be technically sound and achievable by the railway system*

The program of conversion to diesel traction on the EBR is evenmore coniservative. ILt cVt4plte%terouremet:,1 of '? dieselj e..;LtriQmain line locomotives by April 1953 and 13 shunting diesels for the Chittagong

for the main line will follow only after experience has been gained with theS tives now on order.

The program of conversion to diesel traction is sound both tech-nically and from thp standpoint of investment and o.ierating 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 NV since standard esugns of the type normally operated on broad gaugetrack can be used. In the case of EBR, however, diesel locomotives of thepower required for operation on meter gauge track have not heretofore beenbuilt and operated. The plan of purchasing only 5 units for test operationduring a period -of 6 o 12 months is sound engineering practice consideringthe special design of the engines ordered.. The savings involved, as well astechnical problems, can be established during this test period.

2) Replacement Doilers

To date the replacement of boilers has not been a critical problemon the NR where 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

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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 stcan 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 railway systems now have 3383 Qarriages in serviceof which 2513 are on the NWR. With 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 postwPartition period. Theircondition has been further aggravated because of almost complete lack ofmaintenance during and imnediatelv following the war. On the hasis of ageand condition 43% of these carriages should be replaced as soon as possible,

Both of the railway systems are repairing carriages of the woodbody tmp hnt dne to shortage of suitable -wood in Pakistan it Ihas not- benpossible to'maintaip suitable repair schedules, VIith the obsolescence ofwonnd hodv passegner cars throihout the worlrl the Pntire prohle of Oh

best type of passenger coaches for use in Pakistan has been studied in detailabroad bya technical mission with the conclusion that the systems sholdstandardize on the light weight pressed steel type of car now in generaluse in Europe. This nonclusion appears o be sound froe m f a n -hnicl sanq dpoint, particularly in view of the contemplated conversion to diesel powerSinc i + will imesil in less wrmeght xi+h lowrer -ma1+nance cst and geat

safety of operation.

The present railway program provides for the replacement of 432carriages. 23 carriages hav en -rir and are to be delivered during

1952. An additional 197, for which Bank financing has been requested, areto'b e t-y-gnwn,rl int,.anv+l ir nnvrl AMi '(o-- iOO~r' Ma-'" ,-a',~ Ii lorl ~ rrl~,-to be ordemed pre-setly and deliverie- are expected duminge193. Thesenew carriages will replace less than 1/4 of those regarded by the railwaysas due fPor *rplaceen nd reresent a,, a" nal av-g rep ---- flcmet P-" o n

&. XA4 J'J .5 j4 V4 4+4 -4-' A-4-'4 S4.1 544U U V.1I . LLJ-.y

1.3% during the past 10 years. Replacement in the amount and type of car-riages and on t4he Qchedule contemplAated seems technIcally coun" andA is.Q

regarded as necessary.

4) Wagons

The Pakistan railways have about 39,700 wagons in service,about 2, r00 of which are on the NR. Of t is total, it is claimedthat about 10,000 wagons are due for replacement as a result of ageand bad condition. Though an intensive repair program is in progress

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on both systems, replacements must be started immediately if a seriousshorta-e is to be avoided in 1954 and later years,

The nuriber and type of wa.ons required b the raiLuays havechanted considerably since 1-artition due to a different traffic patternand demandft. Increased exports of jute throug,h Chittagong have requireda lar6e number and proportion of jute wagons -on the EBR. Increasingnumibers of cattle wagons are required on the iR system and of tank and,eneral goods wagons on both systems,

'1hile a detailed anålysis of traffic patterns on the twosystems is not available the present program for the replacement ofvagons appears appropriate. The present railuay programr provides forthe replacement of 4373 EG warons and 122 IIG wa,,ons on the HRl systemand for the replacement of 3188 LG and 1000 EG wagons on the EER system,These wagons are scheduled for delivery in a fairly uniform rate distri-buted over the three years of the progran. This program has been care-fully examined and is found acceptable on the basis of the deaands placedupon the railiays.

5) Shop Lquipment

In a distribution of shop facilities between Incia and Pakistanas a resiult of Partition, the porton nf the 1VR in Pakistan repainsadecuately provided with shop facilities. The EER however, has suffereda severe shortag of these faciitieq d.ue principally to tho fact thatthe main shops of the old Eengal-Assam railway in Kanelirapara are now inIndia,

The roi n of dquates+opifacilities for th minteneof existinr and new equipment includin, diesel locomotives is a top pri-o_rity

4+ie in t ail realitation program It i~V u ntlyuT m;cn^-

essary that the new Karachi diesel shop nou under construction be equippeduv lOervLie and%. repaIrJ;. disLVLocoäotivns andI thiat +he raiartaij iho -equipped to service and repair liesel locomotives and other rollin: stock

Karachii has been ordered and the items of equipment are regarded as appro-prat.Ueneral -hop eqJp-ent for Paatl hc a osdrdto be

urg.ently needed two years ago has not yet been ordered, neither have ordersbeen placed for the9 di SshOC; equipment. Tis mate has. bee l ro_h

to the attention of the C-overnment which has decided to take immodiateprocurement action

v) Sleeers

Tracx: maintenance should le regarded as a other top priority4tem in the railway program. ,itithout satisfactory roadbeds, the efficientuse of new and existing, locomotives anc rollin&g stock cannot be realizeddue to the 1imited speed at which trains can be operated. P'oor road-beds contribute to hi,h riaintenance costs on rollin, stocic and are ahazard to safe operation.

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Reports by Bank representatives resulting from field investi-gations indicate that the tracks on the NVR are in fair condition butthat those on the EBR are in poor condition due to limited maintenanceduring and following the war when sleepers, rails and ballast could notbe obtained in adequate quantities. The program for sleeper renewal in1951/52 will be fulfilled only by about 70% on the EBR and h$9 on theN,.*R because of lack of fittings for the steel sleepers now on hand.

However, NWR has already rehabilitated almost the entire trackbetween Peshawar and Karachi over which 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.. Orpanization of the Pakistan Railwavs

The admrTinisq+rqtion andl mTnagement of t.he Pakista.n railwaysQis the responsibility of the Railway Division of the Ministry of Com-mimications. This division is headed by the Director General of Railwayswith 4 sub-directors of Mechanical Engineering and Store, Traffic, CivilRngri neeri nd A dmi i nstaratio ITn tiror.ni +1 rCevntralI frgn4z'in+4^,

each railway system operates as conventional railway establishment withits~ own. General~ ~ fange ,~ Che Enginee and~-, otheri~., suevsr personnel

similar to the railways in the U.S.

A number of British personnel still maintain their positionsithe CenIa AdmniAraio Oran-t+ ado teNR.Bt the

Pakistani and foreign personnel are considered to be competent by Bankrepresentatives VVho ha-Ve been in contact wih 1, 4 Ue

Athe present 4-time teCnaldmisriohas a total ofL U 1A v.. v~it I.Ll 1;1UI L U L&" U.CJ.L u1 il - U 11 _UL± -1.

212 employees. The NWR has a total of about 93,400 employees while theEBR employs about A000 men Both r sytems are ad qutel sta

,v.v o Ww v V'WW r1. 414 -W 44 41 .;. - . j0 ~ ~ .UJ '4y 0U. ~with management and operating personnel who are considered to be competent.,

Thr is howeUIverJ, a shortag ofpervisory personnel of the~ foreman and

inspector classes.

It is the impression of Bank representatives that, in some respects,accoupi.1Ig, purchasing, and reporting proceue could be changed to advanagewith the elimination of a considerable amount of red tape. This is particularlytrue of the procurement procedures which require up to 6 months to clear apurchase order originating in one of the two systems. In at least one case,equipment urgently needed for the EBR workshop and requested more than twoyears ago has not yet been ordered. This problem has been discussed with theGovernent who are now taking special 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 $27. milion 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 1' years isindicated.

In negotiating a loan on this project, the following 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 Railways make suitable arrangementsto replace sleepers at the rate of 700,000per year for normal maintenance and an addi-tional 500,000 per year for the next 6 yearsto make up arrears.

E. 1ayne Rembert

February 6, 1952

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 31Average length of haul per freight-ton, in miles B.G, 254 157

M.G. 58 163Average number of engine-miles per day for froYght 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 700 307 1Number of coaches in servicel (3) 2,513 870 9Number -of wagons in service (in terms of 4-wheelers) 24,-742 (4) 14,078 (5) 3 20Number of employees 9,,396 999791 153,18

Route mileages - Broad Gauge 4,561 498 5,059keter Gauge 19 1,102 1,421Narrow Gauge 82 01 _15,362 1,619 6,981

Gross revenue (Rps.) (6) passenger 99,791,000 54,038,000 153,829,000freight 124,680,000 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 79.5 78 79

(Footnotes on next page)

* Traffic figures April 1949 through March 1950; average figures for the same period; tons used are metric tons (1 ton - 2240 lbs.)(1) Includes tons transshipped to and from broad-gauge and meter-gauge lines (duplications).(2) Includes roughly about 1.5 million tons moved to and from Chittagong Port.(3) Includes upper and lower class passenger carriages, brake, postal, luggage and miscellaneous coaches, and departmental carriages.

Not included are carriages in depots, shops, awaiting repairs 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 RAIL AYS REHABILITKTION PROGRAMADDITIONS AND REPIACEMENTS

Budget Estimates - in-Rs. 1000

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

Locomotives EBR 5,375 11,137 5,37 21,949NWR h,o86 lo,96h lo,495 25,545

Boilers EBR - 4.lh 1,829 5.973WR 350 475 630 i,h5

Carriages EBR 3,390 3,390 15,387 22,167NUR 8.309 9,15h 15.999 33,h62

bagons EBR 10.287 27.2h3 8.215 h1.716NWR 2,434 15,952 18,161 36,547

Ferries EBR 9,350 2,050 1,360 12,76)

Machinery EBR 1,815 h,531 13,805 20,151almR 6)1o 3,C ,8 ,7

BdrPR 2,092 1,-n16 711 31NWR 618 i15h 910 2,682

New Lines EBR 5,050 3,306 2,652 11,008

TakRenevMAls 7BR 3,246 1131938 6,9NWR 19,529 30,255 34,884 84,668

Other Eng. Wks. EBR 11,596 18,300 lh,432 h,3?8A ~ -1-1 r, o -371. nnr rIn*INWR y,1 -_,63 9,27& $4 29,23

TaIs / 96,55e1i 172, 19n7 186,-111 LfL ,859

1/ Does not include the development of the Port of Chittagong, creditsfor operaor of shops and ro eduCtons by Consttuen Asand credits £,or items taken from inventories.

TABLE III

BUDGET ESTIMATES OF REVENUES AND EXPENSES FOR VAKISTAN RAILLAYSFOR THE FISCAL YEARS 1950/51, and-1951/52

(Figus in thousands of pees).Sub Heads

E. B. Railway N. I. Railway T 0 TAL

Revised Budget Revised Budget Revised BudgetEstimate Estimate Estimate Estimate Estimate Estimate1950-51 1951-52 1950-51 1951-52 1950-51 L951-52

I. ORDINARYX IORKINGEXPENSES, -

Administration-Railways 15,425 14,734 20,911 21,081 36,336 35,815Do. Accounts 1,936 1,878 3,853 3,828 5,789 5,706

Repairs & Uaintenance 35,102 45,465 66,356 63,384 101,458 108,849Operating 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 7,046 8,866 4,564 11,790Amenities to Lower Class

Passengers and StaffWelfare Works - 1,00 - 1,500 - 3,oco0

Total I 101,078 107,783 188,911 183,881 289,989 291,664

II. HISCELLANEOUS EXPENDITURE:

Payment to Worked Lines - - 173 161 173 161Land - - - - - -

Survey* 12 16 142 183 154 199Pensionery Charges . 105 26 105 26

Total II .12 16 420 370 32 386

III. Director General of Railways - - - - 662 792

IV. Financial Adviser Communi- - - - - 200 204cations

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

VI. Audit -- - - 11 1454

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

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

VIII.Interest Charges 12,678 13,706 27,884 28,073 40,562 41,779

Total - Jorking Expenses 119,892 13,4,838 231,450 238,991 352,366 375,342

IK. Gross Earnings 108,292 121,100 270,000 270,000 372,180 381,280

X. Suspense 100 14,137 3,600 5,000 3,700 19,137

Total Traffic Receipts 108,392 135,237 273,600 275,000 375,880 o,417

XI. Misc; Receipts 69 - 1,020 ,089 -

II, Gross Rece(ipts 102,349 125,417 214,620 275,000376,969 4Co,4l1

Surplus (+) - 17,543 - 9,1421 +43,170 +362009 +24,603 J25,075Deficit (4

NORTHWESTERN AND EASTERN BENGALRAILWAY SYSTEMS - PAKISTAN

RAILWAYS

ROAD GAUGE (5'6 DOUBLE TRACK JAMMU 8 KASHMIR

BROAD GAUGE SINGLE TRACK

- METRE GAUGE - SINGLE TRACK

NARRQW GAJUUI-&2 oMitTEu

MILES

NORTHWESTERN RAILWAY R'D

WEST PAK/STANAA D L DARG

'¾ EASTERN BENGAL RAILWAYWARSAKKI TAN

AH RAWAPIN

MNALES

MIANWAL\A

00TT HARNA CHTAG

KARACHIlCUKKART

PUNJABSTATE

* BELAkN

HYDERABA