Thursday, September 06, 2012

CAG on Railways: Death by a Thousand Cuts



 Today is the last day of one of the most unproductive sessions of the Indian Parliament.

Over the last three weeks, the Indian Parliament has been paralyzed over the CAG Audit report findings. The opposition - mainly the BJP - has been stridently demanding the resignation of the Prime Minister, Dr. Manmohan Singh. Their focus has been on the CAG report on allocation of coal blocks. This, unfortunately, also served to divert public attention from other equally scathing CAG reports on the Delhi Airport (DIAL), Nuclear Energy (AERB), Power (UMPP under SPVs) and the Indian Railways.

The CAG report on railways (2010-11) appears, at first glance, one that is least glamorous but I found it particularly interesting.  It gives you a glimpse into the kind of routine mismanagement behind the losses being reported by IR every year. Here are some examples --

* Container Operations (p11): Haulage rates fixed by railways for CONCOR and other private players has been below their operational costs. For instance, the haulage rates fixed for 40-feet containers was only 27 tonnes as compared to 21.5 tonnes for 20-feet containers. Total revnue loss - Rs. 1,175 Crores  (p11)

* Manipulation of Computerised Reservation System (p34): Just as we suspected, the audit finds numerous instances of "Tatkal" tickets being issued before the stipulated start-time of 8AM. Also, at precisely 8AM on the day of the 'advance reservation period', not less than 363,700 passengers were booked on the system!

* Incomplte Lines (p77): Indian Railways committed resources of Rs. 8,549 crore on 50 incomplete new lines for an indefenite period with no certainty of the objectives being realised.

* Stoppage of work due to planning lapse (p 103): A new bridge was planned next to a protected national mornument, the Red Fort, without informing ASI. Loss - Rs. 33 Crores.

* Contract Mismanagement (p107): CAG notes that frequent extensions were granted to contractors, ignoring the target period for completion. Loss in anticipated savings - Rs.19.44 Cr

* Awarding contracts without site-surveys (p121): For doubling the track between Cheppad and Kayankulam in 2005, a new bridge was needed. Only after the award of contract did the authorities inspect the site of work and discover that the use of pre-set concrete slab and girder would result in a level difference of 1.6 meters!  The contracter then backed out and the project was stalled for six years!

* Excessive delay in maintenace of locomotives (p128): 99% of maintenance work on diesel locomotives has been delayed by North Western Railways. Loss - Rs. 92.89 Cr.

* Loss due to non-procurement of critical parts which were (p129): Rs.85 Cr.

This seems like a classic case of  'death by a thousand cuts'...
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