It was a long time coming. The unbundling of several state-owned enterprises, including Pakistan Railways (PR), PIA and Pakistan Steel Mills (PSM), as announced by Adviser to the Prime Minister on Institutional Reforms Dr Ishrat Husain, must have surprised nobody, as the state-owned institutions’ constant inefficiencies and failures had made it clear that some drastic but necessary changes were due.

While the restructuring of PIA and PSM had been announced before, the news about reforms within the PR is new. According to Dr Husain, the restructuring plan of PR had been approved by the federal cabinet and the organisation would be divided into five entities. Where one of the five companies will comprise a regulator, independent of PR and it will regulate safety measures and take action on accidents. The second company will look after ML-1, the third company will take care of the railways track and will be solely supervised by the government, while the fourth and fifth companies have been tasked to deal with freight and passenger issues respectively.

These are a set of reforms planned by the government to transform the state institutions which have had apparent failures, without completely overhauling them. This is the right step forward in reforming the railway system, as improved avenues of better performance and a more structured approach will lead to more efficient service in the long run.

Yet the government must remember that previous governments have announced plans of unbundling before as well, in 2010. Earlier, the government has considered complete privatisation too. Still, despite plans of unbundling, PR has seen financial and management crises. As PR becomes increasingly involved under CPEC, it is clear the inefficient management cannot continue. To make the reforms this time truly have impact, the government, first of all, needs to ensure there is complete transparency with every step, and that the five companies’ reports to the regulators are thorough and direct. Only then can these reforms of “unbundling” without complete privatisation be successful.