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Rs 3,200 cr: Rlys loss for operating on uneconomical routes

Making a critical observation of Railway finances, the country's top auditor CAG on Friday said the organisation suffered a loss of over Rs 3,200 crore for operating on uneconomical routes during 2005-10, while the accumulated loss of its key PSUs also went up significantly.

business Updated: Aug 05, 2011 21:21 IST

Making a critical observation of Railway finances, the country's top auditor CAG on Friday said the organisation suffered a loss of over Rs 3,200 crore for operating on uneconomical routes during 2005-10, while the accumulated loss of its key PSUs also went up significantly.

The CAG, in its report for 2010-11, said, "Railways sustained losses of Rs 3,228 crore in operation of uneconomic branch lines between 2005 and 2010 and the loss on operation of such lines increased to Rs 1,198 crore in 2009-10."

It also said that till March 31, 2010, Railways' three PSUs -- Konkan Railway Corporation Limited (KRCL), BWECL and PRCL -- suffered a cumulative loss of Rs 3,435.67 crore, out of which the loss suffered by KRCL alone was Rs 3,330.93 crore.

In an observation of uneconomical projects which connect the backward region of the country to the railway network, the CAG said Railways have already incurred an expenditure of Rs 8,549 crore on 50 incomplete lines and balance funds to the tune of 16,800 crore were required to complete these projects.

"Audit examination of the 50 ongoing work of new lines sanctioned for socio-economic development of backward region revealed that five projects sanctioned more than 20 years ago, nine sanctioned between 15-20 years and 36 sanctioned between 10 and 15 years were still lying incomplete as on March 31, 2010," the report said.

The auditing body also revealed that Railways suffered losses of revenue due from Container Corporation of India, as the haulage charges recovered from it for traffic handled were at "sub-optimal rates resulting in short recovery of operational costs".

Raising concerns over the unrealised earnings by Railways which touched Rs 1368.01 crore by the end of 2009-10 fiscal, it said the major portion of outstanding under traffic suspense was on account of un-recovered freight charges from power houses and state electricity boards.

The report said the slowdown of the economy and sixth pay commission "severely affected" Railways' finances during 2008-10.

During this period, gross traffic receipts, on an average increased annually by 10% as against average annual increase of 24% in total working expenses.

Expenditure on account of impact of the implementation of the pay commission accounted for 70% of the total revenue expenditure, it said.

The auditing body pressed for making quick decisions about inviable projects and increasing focus on more viable projects along with rationalising freight and passenger tariffs to improve its finances.

Pointing to some critical shortcomings in the tatkal scheme, it said, the system was "susceptible to abuses by unscrupulous booking clerks, touts etc" and railways need to comprehensive relook at the scheme.

Talking about anomalies in the scheme, it said that in 2009, cancellation charges were also not collected from 236 passengers who cancelled their tatkal tickets.