The past, present and future of Pakistan railways, taking the perspective of creating the value for the

customers into consideration. Introduction:

The transportation system of any country is known to be its backbone for the economy and all. The domestic transportation system of Pakistan was not very good at the time of independence in 1947. The main means of transportation was railroads. The network was developed mostly in West Pakistan so that it can make a part of larger sub-continental economic and political setting. The only available port at that time was in Karachi so there was a need to connect it to the whole country through rail and roads networks. The transfers of goods are best to be sent through railways, as it was effective and can carry goods more than the roadways. So now the Pakistan Railways playing its important role in connecting whole the country with a much needed rail network. Pakistan railway doing its best to cater the future needs of its customers and to strengthen the economy of the country (Country-data, 2010). Pakistan Railway forms the link of the country by catering to its needs for large scale transportation of freight as well as passenger traffic. It not only contributes to its economic growth but also promotes national integration. Pakistan Railway tries to run the trains strictly in accordance to time table and maintain high standard of punctuality. The progressive freight transport organization operated by professional management and capable staff dedicated to give dependable, competitive and economical service of recognized standards to its customers (Pakrail, 2010). According to Bo Enquist and et. el. There is trend which has the focus on the creation of value and it also exchange the output between supplier and customer in the performance of different activities (Bo Enquist et. el, 2010).

Past of Pakistan Railways:

Pakistan railways provide a main means of transportation across the country and bring the people of the country closer for business, sightseeing, pilgrimage and education. Pakistan railway is an integrating force and built the link of the country by providing the services for large scale transportation of people and freight (Pakrail, 2010). The possibility of Karachi as a sea port was first acknowledged in the mid 19th century. Sir Henry Edward Frere was selected commissioner of Sind after its annexation with Bombay in 1847 with the approval from Lord Dalhousie to start survey of sea port. He also initiated the survey for Railway line in 1858. It was proposed that a railway line from Karachi city to Kotri. On 13th May 1861, first railway line was started for public traffic between Karachi city and Kotri, having a length of 105 miles. The line between Karachi city and Keamari was started on 16th June 1889 and the line from Keamari to Kotri was doubled. The railway line from Peshawar to Karachi was built on Alexanders line of march from the HinduKush to the sea. Many sections on existing main line from Peshawar to Lahore and Multan and branch lines were made in the last quarter of 19th century and early years of 20th century. The four sections i.e. Scinde railways, Indian Flotilla company Punjab railway and Delhi railways working in a single company were later on merged into Scinde, Punjab and Delhi railways company and was taken over by the Secretary of

State for India in 1885 and in January 1886 and it was named North Western State Railways which was later on renamed as North Western Railways (Pakrail, 2010). The structure of service dominant logic in value creation consists of five dimensions along value creation opportunities occur. The dimensions are engaging customer emotionally in the marketing activities, offering self service options to customers, involving customers in staging customer experiences, solving customer problems and getting customers involved in designing services (Bo Enquist et el, 2010). In 1947 when Pakistan came into being, it received the railroads network given by the British officials who developed it as per their needs. North Western Railways 1847 route mile was transferred to India leaving route miles 5,048 to Pakistan. So there was the need to redesign it according to the countrys own requirements. In 1954 the railway line was made to Mardan and Charsada section and in 1956 Jacabad-Kashmore 2-6 line was transformed into broad gauge. (Pakrail, 2010). In the 1970 and 1980s, road and air networks increased much faster than did the railroads. This trend continued from 1978 to 1992 and in this time the volume of freight and the number of passengers carried by rail increased very little, whereas the freight through road and number of air passengers grew more than double. In 1994 transportation policy shifted its aim back to the rail system with a long term goal of a rail to road freight traffic ratio of 33:67 by the year 2000, which could not be attained due to many affecting reasons to the goal. Anyhow the traffic pressure on the roads increased many times and government has to invest in the field of road transportation. The railroad system is government owned and covers 8,775 kilometers. In FY 1992 there were 753 locomotives and 34,851 freight wagons. There were a number of attempts made to privatize some routes of railways but the most profitable routes resulted in loss when given to the private sector. One of these examples are in 1992 when the most profitable route in between Lahore and Faisalabad was privatized but the private owner sustained losses and the line was renationalized in September 1993 (Country-data, 2010).

Present of Pakistan Railways:

Pakistan railway is a big organization but suffering huge losses for the past many years as the operational cost has greatly increased in respect to the profits. Anyhow Pakistan railway is dedicated to provide its customers maximum and beliefs in positive co-production. Positive co-production means that customers enhance the quality of services, whereas negative implies that activities reduce the cost and quality of services (Bo Enquist et el, 2010).

Passenger Traffic:
The passenger business unit is responsible for the creation, maintenance and delivery of passenger services and all related facilities to the traveling public, including the transportation of parcel traffic (Pakrail, 2010).

Organizational Structure:
The passenger business unit is headed by the Additional General Manager (PBU), who is assisted by the following heads of departments (Principal Officers):

Chief Electrical Engineer/Passenger Chief Commercial Manager Deputy Chief Operating Superintendent/Coaches Chief Mechanical Engineer (Carriages) Divisional Superintendent Workshop/Moghalpura

Freight Traffic:
Vision Statement of Freight Business Unit: A progressive freight transport organization operated by professional management and competent staff committed to provide reliable, competitive, safe economical service of organized standards to its customers (Pakrail, 2010).

Organizational Set-up:
The freight business unit is managed by Additional General Manager, who is assisted by heads of the various freight departments through, Chief Commercial Manager, Chief Marketing Manager, (Marketing of Freight Service) Chief Traffic Manager (Dry Ports), Deputy Chief Mechanical Engineer/Wagons and Deputy Chief Operating Superintendent (Locomotives) (Pakrail, 2010).

Corporate Profile:
There are 200 freight stations on the system with 12,000 employees dedicated to provide service to the clients. The freight business unit serves two major sea ports of Kiamari and Bin Qasim. Major commodities handled by freight business unit on these ports include PTA (Chemical for Rayon Manufacturer), Petroleum Oil and Lubricant (POL), Wheat, Coal, Fertilizer, Rock Phosphate, Cement, Oil seed Containers, Sugar and goods for transit to Afghanistan (Pakrail, 2010).

Corporate Direction:
The freight business unit is a customer oriented department. The price strategy derived by this department is client friendly. This department makes all possible efforts to reduce cost of transportation and to increase the income through efficiency, innovation and modernization (Pakrail, 2010).

Pricing Policy:
The cost of transportation of goods by rail is less in terms of fuel in moving the same cargo by road. This is a main cause that Pakistan railway is in a position to come up with a competitive pricing policy that gives maximum advantage to its customers and the organization. Pakistan railway charges the price on differential basis according to the principle of What each type of traffic can bear. The fare structure is planned to fix an upper limit while taking into account the basic cost incurred in transport value of commodity, its load-ability, vulnerable to damage and pilferage along with various other factors.

Sometimes promotional fewer rates are quoted to provide incentive to move the commodities by rail or road and sometimes seasonal reduced rates are charged to attract the commodity. The containerization of cargo and newly developed dry ports were the steps that are further helping multimodal movement of commodities (Pakrail, 2010).

Cargo Express:
A cargo service was introduced in 1974 which is now running on daily basis for moving of general cargo from Karachi city to Badami Bagh Lahore and also on return way. This cargo express has been restructured with better capacity and high speed wagons with terminal services to increase the present load of 1000 tones to 1600 tones. Same kind of service has also been started between Faisalabad, Multan and Karachi and vice versa. These services are being run five times a week (Pakrail, 2010).

Manufacturing and Service Unit:

Headed by the General Manager Manufacturing & Services, this unit is composed of: 1. Concrete Sleeper Factories, ( CSF ) 2. Carriage Factory. Islamabad, ( CFI ) 3. Locomotive Factory, Risalpur. 4. Rehabilitation Project, Moghalpura Lahore. 5. Medical and Health Service. 6. Railway Construction Company ( RAILCOP ) 7. Pakistan Railway Advisory & Consultancy Services ( PRACS ) 8. Educational Facilities (Pakrail, 2010). The value creation framework consists of three main components; the customers value creating process concerned with co-creating and experiencing, the suppliers value creating process concerned with designing and co-creating a customer relationship experience and encounters where ongoing interactions are involved in creating these experiences (Bo Enquist et el, 2010). Prahalads framework is more related to activities embedded in value creation. It entails five dimensions: customer engagement, self service, customer experience, problem solving and co-designing, Customer engagement captures the situation when firms influence customers through advertising and promotions (Prahalad, 2004). Pakistan railway is also working on these lines to produce better services for its customers, whether these are passenger or freight services.

Concrete Sleeper Factories:

Pakistan railway owns five concrete sleeper manufacturing units, located at Sukkar, Khanewal, Kohat Cantt, Shahinabad and Kotri. The industrial unit at Sukkar was established in 1967, first in the sub continent, other four factories came up in 1979-80. 514 employees are working in these setups (Pakrail, 2010).

Pakistan Locomotive Factory, Risalpur:

The locomotive manufacturing unit was established at Risalpur in 1993 at a total cost of Rs. 2284 million including a foreign exchange component of Rs. 1469 million. It is state of the art unit operational with latest plant and machinery. The plant is situated on an area of 257 acres; out of which 100 acres are covered by the industrial unit while on the remaining 157 acres is the staff colony. The design production capacity of the factory is 25 diesel electric locomotives per annum on single shift basis. The technology for developing of locomotives has been acquired from Hitachi Ltd Japan, General Electric USA, Adtranz Germany and Dalian Locomotives and Rolling Stock Works, China. The plant has achieved the design capacity of 02 locomotives per month in the on going project of 69 diesel electric locomotives. The factory has so far made 97 new diesel electric engines of 2000-3000 hp for Pakistan Railways besides manufacturing of new engines 26 overage engines of 2000-2400 hp have also been renewed. On top of it different spare parts of engines are also being manufactured on regular basis for use by Pakistan Railways. The engines manufactured in this factory are successfully operating on the routes and their performance and dependability is satisfactory. The factory has saved foreign exchange of Rs. 1392 million on account of local manufacturing of these engines (Pakrail, 2010).

Locomotive Rehabilitation Project Moghalpura, Lahore:

The diesel electric engine is the main source of power traction service. The costly unit can not be replaced every time. Repair of engine increases its useful life many times for further service with less amount of spending. Due to this fact Pakistan Railways set up a project in 1976 at Moghalpura workshops Lahore for the repair of aged diesel electric engines giving them a new 15 to 20 years useful life (Pakrail, 2010).

Railway Constructions Pakistan Limited (Railcop):

Railway constructions Pakistan Limited (Railcop) is a subsidiary of ministry of railways and was incorporated as a public limited company in 1980 under the companies act 1913, with an initial investment of Rs. 0.5 million. Due to development in construction activities the turnover of the company is Rs.775 million during the financial year 2007-08 (Pakrail, 2010).

Pakistan Railway Advisory and Consultancy Services Limited (PRACS):

Pakistan Railway Advisory and Consultancy Services (PRACS) is public limited company which was established in the year 1976 and registered under companys Act 1913 which was afterward changed to companies ordinance 1984 (Pakrail, 2010).

Future of Pakistan Railways:

The understanding of value creation is not only beneficial for highly competitive industries but public sector can also get benefit from it. Actually, the term value co-production as an equivalent to value creation started to some extent from public service sector (Bo Enquist et el, 2010). Pakistan railway is dedicated to provide its customers the best infrastructure and services which have value for its customers. For this purpose, Pakistan railway is doubling the track from Lokhran to Khanewal via Multan of about 121 kilometers costing around 3297 million rupees. This work is already completed and it will increase the line capacity. Doubling of track from Khanewal to Raiwind of 246KM was started in year 2005 and was supposed to be completed in four years time with a cost of 8326 million rupees. 490 V wireless telephones have been provided in ASM/TD offices across Pakistan. Pakistan railway has plans to change its old and obsolete system in three phases. In phase one it will be changed with Fiber optic cable transmission system from Peshawar to Karachi and Rohri to Quetta on main line during 2008-12 covering a distance of 2200 kilometers. 25 KV AC, single phase electric traction system was introduced in 1970 over 286 Kms Lahore-Khanewal main line section to modernize the system and also to save foreign exchange on the import of diesel engines. The profit from the system were consequent but now the system is down and requires repair and this is in the plans to set right it for the advantage of the customers. Pakistan railway is providing a second line from Khanewal to Raiwind to give double line all the way from Karachi to Lahore. Work is in progress of shifting of ET Mast infringing the placement in connection with doubling of track on Khanewal-Raiwind section. Electrification of the second line and repair of current electrified section also been planned. Ministry of Railways now intends to carry out fresh feasibility for electrification vs. dieselization for positive practicality of electrification on Khanewal-Karachi double line section through international/national consultants under transport assistance loan from Asian Development Bank. Financial proposal of the international consulting firms have been opened and evaluated and sent to the ADB for approval. Sixty three special trains in different times were managed from July 2007 to June 2008. Two thousand nine hundred extra coaches were attached by different trains to clear extra requirements of passengers during 2007-08 for customer satisfaction from the service. Computerized reservation system is in use for facilitation to its customers (Pakrail, 2010). Pakistan railway has the plans to introduce rail tourism; this will also take in the religious tourism for visitors. Steam safari is also offered for the individual who want to take the taste of historic steam engines of 18th century. Railway museum also gives a very nice history about the Pakistan railway till to date. Pakistan railway also planning to implement the radio frequency identification (RFID) based freight wagons tracking system on turn key basis; this will make the carrying and delivery of goods much faster than before (Pakrail, 2010).

Conclusion:
Pakistan railway is striving hard to achieve the goal to be profitable with maximum level of customer satisfaction. The task seems very hard but a short term strategy to devise new services with the interaction of customers and involvement of stakeholders in the service delivery modes can help to position the organization from where it can move towards the earning of profits position. In mid term strategy more and more electrification of rail routes can be good as it will reduce the oil expense on one side and is greener in nature to be a sustainable strategy for Pakistan railways. In long term strategy new

routes and new trains can be included to enhance the operational capacity of the organization. It should also be mixed with creation of value for its customers by actively involving them in designing the new services for them. Co-designing occurs when the customers participate actively in the innovation of a new service or product (Prahalad, 2004). New routes can also be introduced keeping the demand from the customers in mind. Customer involvement and coproduction of services are the need of the hour for the Pakistan railway to be successful in future.

References:

Bo Enquist, Mikael Johnson and Heiko Gebauer, Value creation in public transit services, 2010. Prahalad, C.K. and Ramaswamy, V. (2004), The Future of Competition: Co-creating value with customers, Harvard Business School Press, 1st edition. 2004. http://www.country-data.com/cgi-bin/query/r-9845.html [online accessed on 2011-01-01] http://www.esol-tech.com/pakrail/ [online accessed on 2011-01-02] http://www.esol-tech.com/pakrail/page.php?pid=20 [online accessed on 2011-01-03]