ABSTRACT

This study examines the privatization of Pakistan Railways, utilizing a mixed-method approach with an explanatory sequential design to explore the multifaceted factors influencing privatization decisions. Initially, a Probit model is employed to identify significant variables that impact the likelihood of privatization. The Probit model analysis reveals that higher operational expenses and interest on debt significantly increase the probability of privatization, suggesting that financial strain is a crucial driver. Additionally, DID analysis was carried out to evaluate the economic significance of creating subsidiaries in Pakistan Railways where results show a significant positive impact of subsidiary on the transportation of coal. Following the quantitative analysis, qualitative methods are employed, utilizing primary data through interviews with key stakeholders, including government officials, railway employees, and industry experts. This qualitative phase provides deeper insights into the practical and political challenges faced during the privatization process, particularly focusing on the freight company within Pakistan Railways. The qualitative analysis identifies key barriers to privatization, including political interference, inconsistent policies, and a lack of strategic direction. These issues hinder the success of privatization efforts, highlighting the urgent need for deregulation and coherent, long-term planning. Addressing these barriers is essential for unlocking the full potential of privatization and fostering sustainable growth in the railway sector.