Sri Lanka Railways make heavy losses
April 15, 2009 (LBO) – Sri Lanka’s over-staffed and inefficient state-owned railway service made heavy losses in 2008 despite higher revenues after fare increases, the central bank said.
Sri Lanka Railways (SLR) made a loss of 4,553 million rupees in 2008, up six percent from a year ago. The total revenue of the SLR increased 22.4 percent to 3,671 million rupees, while spending increased by 12.7 percent to 8,225 million.
Despite the heavy losses and poor service, workers in the state transport sector remain a pampered lot, even getting subsidised travel on their own loss-making services, while constantly demand more pay and perks.
Government officials told reporters last May when the fare hikes were announced that the state railway had 17,000 employees who enjoyed discounted season tickets and paid only three cents a passenger kilometre.
The central bank report for 2008 also said passenger transportation and goods transportation by rail fell by 2.1 percent and 9.4 percent that year.
This was mainly due to cancellation of train operations between several areas due to security reasons and curtailment of unproductive train operations as well as increases in railway fares and freight charges.
At present, Sri Lanka Railways carries only around five percent and one percent of the passenger and goods in the country.
Railway fares were raised by an average rate of 70 percent in June 2008 after a lapse of three years mainly because of increased fuel prices.
However, fares were reduced by about nine percent in line with the reduction in diesel prices in December, 2008.
Still, despite the average railway fare increase of 42 percent in 2008, it was not enough to generate a profit.
“However, the fare revision in 2008 was not sufficient to mitigate the already weakened financial position of the SLR,” the central bank said.
Source: LBO
Tags: financial losses, heavy losses, revenue
