Risk Management in Railways Construction Investments: A Case Study of China-Pakistan Economic Corridor (CPEC) ML-1 Project

Abstract

Railway projects are incredibly costly due to their complex nature. This study performs risk analysis and management of Pakistan railways ML-1 project expansion and upgradation that will be undertaken at US$6.8 billion under the China-Pakistan Economic Corridor (CPEC). The risks were identified based on an extensive literature review and their relevance to the CPEC. We employed fuzzy set theory (integrated with the risk severity index) to obtain the most severe risks. The novelty of this study is the technique employed to analyse and rank the risk, also there are no previous studies conducted that emphasized the construction risk of railway projects in Pakistan. The study is useful for all stakeholders of the project, as it can plan for them to tackle these risks and implement ML-1 successfully.

The crisis of Pakistan railways: unveiling the nexus of competence and corruption

“…The 1973 reforms pioneered these issues and transformed PR from a commercial entity to a bureaucratic organization by handing it over to the Ministry of Pakistan Railways. As a result, PR has always been facing underinvestment and governance issues (Ali et al, 2024).…”

“…The rest of the damage was done when fake spare parts were replaced at the time of their replacement to add to their failure and get more financial gains. In short, a whole conspiracy was involved, from their purchase to operational maintenance (Ali et al, 2024).…”

“…An audit report reveals that the PR administration still needs to recover Rs 310.34 million on the head of maintenance and operational accounts from the Defense Department, WAPDA, and other government departments for the last several years. Corruption in all its forms, from the top of the hierarchy to the grassroots level, bad governance, poor management, weak internal structure, and negligence have cost Pakistan Railways tremendous loss (Ali et al, 2024).…”