2.1.1 South Eastern Railway: Non-revision of siding charges
Non-revision of siding charges in respect of electric locomotives used for placement/ removal of wagons resulted in short-realisation of Rs.32.86 crore
A comment about the non-revision of siding charges in respect of electric locomotives used for placement and removal of wagons in case of 17 colliery sidings resulting in short recovery of Rs.24.67 crore was made in Para 2.1.1 of the Report of the Comptroller and Auditor General of India (Railways) for the period ended 31 March 2001.
Further scrutiny of records revealed that Railway Administration has initiated action to revise and recover the siding charges in respect of these sidings based on All India Engine Hour Cost (AIEHC) applicable for electric locos used for placement and removal of wagons. They, however, failed to revise the siding charges in respect of three more colliery sidings viz. Old Kusmunda, Rajnagar R.O. and New Rajnagar siding electrified and commissioned between November 1997 and April 1998. The siding charges were being recovered at the rates fixed for diesel locomotives.
The siding charges in respect of these 3 sidings based on AIEHC for electric locomotive as assessed by Audit works out to Rs.35.66 crore for the period January 1998 to December 2002.
The matter was brought to the notice of Railway Administration in April 2003 and Railway Board in September 2003. During discussion held on 9 October 2003, the Railway Administration stated that the siding charges at Electric Engine rate have since been levied with effect from 1 November 2002 in respect of old Old Kusumunda and from 1 August 2002 in respect of New Rajinder and Rajnagar R.O. siding. Consequently, the revised assessed loss works out to Rs.32.86 crore for the period January 1998 to October 2002. Reply from Railway Board has not been received (February 2004).
2.1.2 Northern and Western Railways: Loss due to delay in revision of haulage rates
Under delay in revision of haulage rates recoverable for traffic of CONCOR resulted in loss of revenue amounting to Rs. 14 crore
A comment on 'loss of revenue due to delay in revision of haulage charges recoverable for CONCOR traffic' was made in paragraph 3.1.9 of the Report of Comptroller and Auditor General of India - Union Government (Railways) for the year ended 31 March 1999. In the Action Taken Note (ATN), Railway Board stated that pricing policy being a complex and market sensitive issue, various relevant factors such as what the market can bear, CONCOR's competitiveness with road, rail freight hike, costing parameters, escalation factors etc., have to be taken into account. In order to take a well-balanced decision, they have to consult all concerned directorates of the Railway that causes the delay. Audit vetted ATN with the remarks that since the haulage charges are revised from a pre-determined date, related activities should be programmed in such a way that the revisions could be effected from the due date.
Audit scrutiny of records of Railway Board revealed that the process of revision of haulage rates for the year 2002-03 was started in January 2002. The proposal for revision of rates remained under consideration with Freight Marketing, Traffic Transportation, Commercial and Finance Directorates of the Railway Board till 16 July 2002 when the rates were finalised and put up for approval of the Member Traffic (MT). The MT did not agree with the rates concurred by Finance and forwarded his views to Finance Commissioner. The matter was further delayed for about 4 months and ultimately a notification for revising the rates provisionally was issued on 22 November 2002.
Since the Railway Board was unable to take a decision on the revision of rates before due date i.e. 1 April 2002, provisional rates should have been notified immediately instead of doing so after lapse of eight months from the due date. The delay in notifying the provisional rates resulted in loss of Rs.14.00 crore on two Railways alone (Rs.3.57 crore on Western Railway and Rs.10.43 crore on Northern Railway) during 1 April 2002 to 21 November 2002.
The matter was brought to the notice of Northern and Western Railway Administrations in April 2003 and May 2003 respectively. Northern Railway stated in September 2003 that reply for delay in revision could be given only by Railway Board. The matter was brought to the notice of Railway Board in October 2003. They stated in December 2003 that there was no increase in the Railway’s freight rates and also that when the matter of revision of haulage rates was under review, CONCOR had requested not to increase the rates for the year 2002-03. Moreover, certain technical factor like ‘marshalling and wagon turn round’ which affect the full distributed cost were involved. The reply is not tenable because even after delay of about eight months the haulage rates were fixed provisionally by adopting the pre-determined formula of recovering fully distributed cost plus profit margin.
2.1.3 Northern Railway: Non-recovery of haulage charges
Failure of the Railway Administration to recover haulage charges from CONCOR in respect of containers hauled empty along with loaded rakes resulted in a loss of Rs.1.38 crore for the period April 2000 to October 2002
Rates of haulage charges to be recovered from Container Corporation of India (CONCOR) for movement of container traffic both in loaded and empty directions are notified by the Railway Board every year.
A review by Audit of Train Summaries for the period from April 2000 to October 2002, prepared by CONCOR in respect of Kharia Khangarh and Gotan stations of Northern Railway revealed that out of 19098 TEUs (twenty feet equivalent units) received at these stations for loading, 15520 TEUs were loaded and the remaining 3578 TEUs were despatched empty to Tughlakabad along with the loaded units. A further scrutiny indicated that out of these empty TEUs, 1316 units were not loaded due to defects in the containers and 643 units were not loaded because these were positioned outside the platform. The reasons for not loading the remaining 1619 TEUs were not on record.
The haulage charges of Rs.1.38 crore in respect of 3578 TEUs hauled empty were not recovered from CONCOR.
The matter regarding non-recovery of haulage charges was brought to the notice of the Railway Administration and Railway Board in May 2003 and October 2003 respectively and their reply has not been received (February 2004).
2.1.4 North Western and: Northeast Frontier Railways
Loss due to delay in revision of minimum weight condition
Failure to revise the Minimum Weight Condition of 'Mustard Oil' and ‘Bamboo’ consignments resulted in the loss of revenue amounting to Rs.4.29 crore
As per Indian Railway Conference Association, Goods Tariff, commodities are subjected to certain minimum chargeable weight per four wheeled wagon depending upon their loadabilities. Rule-164 (2) provides that when commodities for which minimum weight condition (MWC) is 180 quintals and below per four wheeled wagon, MWC of the same commodity when loaded in BCX/BCN/ BCNA (8-wheeler) wagons should be twice that prescribed for a four-wheeled Broad Gauge (BG) wagon. MWC for 'Mustard Oil' and ‘Bamboo cuts, chips and splints’ is 110 quintals per four-wheeled BG wagon and 220 quintals per 8-wheeled BCX/BCN/BCNA wagon.
In November 1984, Railway Board instructed the Zonal Railways that there should not be any undue delay in processing the case for upward revision of MWC if it comes to their notice that the commodity could be loaded to a weight much higher than the prescribed MWC. Pending revision of the weight condition, Zonal Railways were also required to instruct the loading stations to levy freight charges on the basis of actual weight arrived at by either weighment or computation.
Audit scrutiny of records of Bharatpur station (now in West Central Railway) revealed (November 2002) that there was regular booking of ‘mustard oil’ in tins loaded in BCN/BCNA wagons. It was noticed that against the prescribed MWC of 220 quintals, in 98 percent cases (447 out of 455), the eight wheeled wagons were loaded with weight ranging from 225 quintals to 383 quintals thereby establishing the fact that the MWC prescribed in the Goods Tariff was very much on the lower side. As the prescribed MWC was only 220 quintals, most of the consignors were loading the wagons only up to 220 quintals thereby not utilising them to the optimal capacity resulting in loss of revenue through wastage of space. Though the matter was brought to the notice of local Railway Administration in November 2002, North Western Railway (NWR) Administration took almost six months to revise tentatively the MWC of ‘mustard oil’ for six months to 160 quintals for 4 wheel BG wagon (320 quintals for eight wheel wagons) with effect from 15 June 2003.
Failure of Railway Administration to take early action to revise the MWC resulted in under utilisation of capacity of wagons and consequential loss of Rs.2.74 crore during April 2001 to March 2003 in respect of ‘mustard oil’ traffic booked from Bharatpur, Alwar and Kanakpura stations.
The matter was brought to the notice of Railway Administration in May 2003 and Railway Board in August 2003. WC Railway Administration stated (September 2003) that they had revised the MWC with effect from 1 September 2003 and requested Railway Board for notification. During discussion on the para (October 2003), NWR Administration stated that their Railway came into existence only from October 2002 and that MWC has been revised provisionally from 15 June 2003. The replies are not tenable because Railway Administrations are yet to conduct test weighments and recommend finally to Railway Board for revision of MWC so that further loss on other Railways can be avoided.
Scrutiny of records in audit revealed that paper mill sidings served by Jagiroad were in regular receipt of traffic of Bamboo cuts, chips and splints, booked on the basis of senders’ declared weight. Though a weighbridge is provided at Rangapani (RNI), an enroute station, the wagons of this traffic were never weighed and the destination station was accepting the weight on the basis of Railway Receipts (RRs). A reference to records maintained by Hindustan Paper Corporation (HPC) siding, however, revealed that the weight loaded per 8 wheel wagon (as received by the party) was ranging from 222 quintals to 279 quintals. This indicated that the loadability of commodity Bamboo cuts, chips and splints was much more than the prescribed MWC and required upward revision.
Examination of records of six other stations [Sorbhog (SBE), Pathshala (PBL), Basugaon (BSGN), Barpeta Road (BPRD), Gosalgaon Hat (GOGH) and Chaprakata (CPQ)] also revealed that weighment facility was not available with booking stations and senders’ declared weight was being accepted for charging freight.
In this connection, the following comments arise:
Had the MWC of commodity Bamboo cuts, chips and splints been revised to 240 quintals, Railway Administration could have avoided loss of Rs.1.55 crore during April 2000 to March 2003.
The matter was brought to the notice of Railway Administration in May 2003 and Railway Board in September 2003. Railway Administration stated (November 2003) that they had conducted extensive surveys and test-weighments of Bamboo-Chips, Cuts and Splints traffic during 1978 onwards upto 1988-89 to fix reasonable MWC for this commodity booked from this Railway.
The reply is not tenable. Audit findings suggest the need for conducting fresh surveys and test-weighments to refix the MWC and avoid recurring loss to Railways.
Reply from Railway Board has not been received (February 2004).
2.1.5 Eastern Railway: Non-declaration of trains as ‘superfast’
Non-inclusion of trains in the category of ‘superfast’ trains in spite of their fulfilling the prescribed criteria led to loss of revenue of Rs.1.57 crore
Railway Board instructed (September 1993) all Zonal Railways that the average speed of minimum 55 kmph on Broad Gauge (BG) and minimum 45 kmph on Metre Gauge (MG), separately in both directions, would be the criteria to categorise a train as ‘superfast’ for levy of supplementary charge on passenger tickets. The average speed is to be calculated by dividing the end to end distance by the total journey time taken. In September 1998 the Railway Board empowered the Zonal Railways to declare themselves the train as ‘superfast’ if it fulfilled the above criteria under intimation to Railway Board. Further, the Railways were directed to send a detailed proposal giving justification if they did not find it desirable to classify a train fulfilling the speed criteria as 'superfast' for consideration of Railway Board.
A review by Audit revealed that the average speed of four trains, viz. Santiniketan Express, Agnibina Express, Black Diamond Express and Coal Field Express which originate from Howrah station is more than 55 kmph in both directions.
No action has, however, been taken by Railway Administration to declare these trains as ‘superfast’ to enable them to levy supplementary charges on passenger tickets of these trains. Detailed justification for not classifying these trains (which fulfilled the speed criteria) as 'superfast' was also not sent for consideration of Railway Board.
An assessment in audit revealed that Eastern Railway Administration could have earned Rs.1.57 crore by levying supplementary charges on passenger tickets sold for reserved accommodation alone in respect of trains at Sl. Nos. 1 to 3 from April 2001 to March 2003 and in respect of train at Sl. No.4 from July 2001 to March 2003. In respect of trains at Sl. Nos. 1 to 3 the earnings could have been more for the earlier period also since they were running at the speed of more than 55 km per hour in both the directions even before April 2001. The Railway will continue to incur loss till corrective action is taken.
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and September 2003 respectively and their reply has not been received. (February 2004).
2.1.6 Southern Railway: Failure to adopt actual tare weight
Failure of the Railway Administration to follow the directives of Railway Board to take into account the variation in tareweight found on actual weighment and the tareweight stencilled on the wagons resulted in undercharges of Rs.1.34 crore
Iron and Steel consignments are normally transported in BOXN, BRN, BRH and BOX wagons. In terms of Rate Advice No.9 of 2001 of Southern Railway, the permissible carrying capacity of these wagons for iron and steel consignments is the marked carrying capacity (CC) plus 2 tonnes in respect of BOXN, BRN and BRH wagons and marked CC plus 3 tonnes in respect of BOX wagons.
CC of the wagons, together with the tareweight, is stencilled on the wagons. Rule 2.4.2 of Indian Railways Conference Rules Part III requires the Railways to correct the tareweight of wagons of other Railways at any station equipped with a weighbridge, when the difference between the actual and marked tareweight of the wagon is 0.2 tonnes or more. Since the marked CC is arrived at by deducting the tare weight from the gross load of a wagon, changes in tareweight of the wagons cause a corresponding change in the marked CC. This would also affect the freight to be charged on consignments having minimum weight condition as CC.
The Board permitted (August 1987) the steel plants to tareweigh empty wagons supplied to them for loading. The permission was extended from time to time and the last such extension conveyed (September 2002) was for the period upto August 2003.
Cases involving levy of freight charges without taking into account the lower tare weight noticed in weighments made by the steel plants were taken up in 1994 and 1998 with the Railway Administration. The Railway Administration had contended (March 1996/ January 2001) that:
In July 2001, the Railway Board directed the Railways to take into account the variation in tare weight while arriving at the payload of loaded wagons.
Railway Receipts (RRs) pertaining to iron and steel consignments received at six stations viz., VSPT, SAIT, BYPL, TPGY, CSAS and PLMD on Southern Railway during 2000-01 to 2002-2003 were reviewed. It was observed that though the RRs contained details of stencilled CC, stencilled tareweight and the actual tareweight the charges were levied on the basis of the marked tareweight only resulting in loss of Rs.1.34 crore during 2000-01 to 2002-03. The loss would be more if the position on other stations is taken into account.
The matter was brought to the notice of the Railway Administration in June 2003 and Railway Board in September 2003. Railway Administration, with the approval of the Railway Board accepted (December 2003) the audit contention that failure to utilise the actual tare weight particulars available in invoices had resulted in the non-recovery of charges amounting to Rs.1.34 crore. It was also stated that action was being taken to advise the stations on Southern Railway to assess the undercharges and arrange for realisation thereafter.
2.1.7 Central Railway: Loss due to delay in realisation of freight
Failure of the Railway Administration to observe the rules for booking of paid traffic and realisation of freight has resulted in loss of Rs.1.82 crore due to non-levy of 'To Pay" surcharge
As per provisions of para 1451 of the Indian Railway Commercial Manual, Volume-II, Railway Receipts (RRs) should be prepared as soon as freight and other charges have been collected and given to the sender when the loading is completed to the satisfaction of the Railways. There should not be any undue delay in the issue of RRs to the consignors and these must be made over to them on the very day on which the consignments have been booked and loaded. At large stations where it is not feasible to do so, the Divisional Commercial Superintendent may permit the issue of RRs not later than the day following the day of acceptance of loading of goods.
In October 1998, Railway Board had clarified that in cases, where the freight charges on traffic offered for booking on prepayment basis were not paid by the consignor in time, Railway Staff should issue 'To Pay' RRs and levy the applicable surcharge.
Audit scrutiny of records of Bharat Petroleum Siding, Trombay revealed (December 2002) that the consignments of POL traffic were accepted for booking on freight prepayment basis. The RRs were, however, not being issued on the same day as the freight was not paid. There was delay of 1 day to 19 days in issue of RRs and collection of freight. Despite delay in payment of freight by the consignors, the station staff was neither issuing 'To Pay' RRs nor levying surcharge as required in Board's orders of October 1998.
The failure of the Railway Administration to observe the rules for booking of paid traffic and realisation of freight has resulted in loss of Rs.1.82 crore due to non-levy of 'To Pay" surcharge for the period April 2000 to March 2003.
The matter was brought to the notice of Railway Administration in May 2003. In their reply given November 2003, they stated that the RRs were issued only after completion of loading and in some cases, due to non-supply of requisite number of wagons the loading was not treated as complete till the message regarding non-availability of remaining wagons was received from operating department and the rake was moved. The reply is not tenable because in the cases pointed out by Audit, despite the fact that loaded rakes had already been moved, the RRs were not issued due to non-payment of freight immediately on completion of loading.
The matter was brought to the notice of Railway Board in September 2003 and their reply has not been received (February 2004).
2.1.8 Northern Railway: Non-recovery of Military Traffic dues
Delay in revision of special contract rates in respect of military traffic and failure in raising arrear bills resulted in non-realisation of Rs.1.31 crore
As per Rule 102 of the Indian Railway Military Tariff No.6 Volume I, contract rates are special rates chargeable to the Ministry of Defence. These rates are fixed by Railway Board on yearly basis and are given effect from Ist day of April every year.
The revised special contract rate effective from Ist of April for the years 1999-2000, 2000-01 and 2001-02 were notified by Railway Board on 11 August 1999, 12 September 2000 and 6 September 2001 respectively. Copies of notifications of revised rates were duly endorsed to Traffic Accounts office.
These revised rates at the Railway booking points were given effect from the dates of their issue. Bills on account of arrears representing difference between the rates chargeable from 1 April 1999 to 10 August 1999, 1 April 2000 to 11 September 2000 and 1 April 2001 to 5 September 2001 and the rates actually charged during these periods were to be preferred by Traffic Accounts Office.
A review by Audit (December 2001) of records in Traffic Accounts Office relating to Military Traffic booked to and from 14 stations/ sidings of Northern Railway revealed that bills on account of arrears for the above mentioned periods had not been preferred by the Traffic Accounts office against the Ministry of Defence.
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and September 2003 respectively.
The Railway Administration, with prior approval of Railway Board, stated (January 2004) that:
The reply is not tenable because:
2.2.1 North Eastern and: Northern Railways
Loss due to haulage of traffic by longer route
Rule 125 (1) of Goods Tariff Pt.I (Vol.I) provides that unless there are specific instructions in writing from the sender or his authorised agent to the contrary, goods would be despatched by the route operationally feasible and freight charged by the shortest route.
Deoria Sadar (Goods) is a station in Varanasi Division of North Eastern Railway. There is a regular flow of cement to this station from Keymore siding, Maihar cement siding, Hinota Ramvan, Turki Road etc. on Central Railway. The route from these originating stations to Deoria Sadar via Naini - Kanpur - Barabanki is longer by 387 to 422 kms. than the route from these stations via Naini - Varanasi - Bhatni. The line capacity utilisation of the longer route was upto 158 per cent against 85 per cent line capacity utilisation of the shorter route. The longer route was, therefore, more congested than the shorter route.
During audit of accounts (May 2001) of Deoria Sadar, it was noticed that while 100 per cent of cement traffic from these stations to Deoria Sadar was being booked and charged for by the shorter route via Naini - Varanasi - Bhatni, it was actually being carried over the longer route via Naini - Kanpur -Barabanki. This was resulting in considerable loss to Railways.
When the matter was taken up (April 2002), the North Eastern Railway Administration admitted (March 2003) that all the 332 cement rakes (100 per cent) were booked and charged via the shorter route but were actually carried by longer route. However, they argued that cement traffic was being carried by the longer route by Central and Northern Railways. A further query by Audit revealed (October 2003) that the cement traffic in question was being diverted after Naini to longer route via Kanpur - Barabanki by Northern Railway.
Thus, failure of Northern Railway to route through traffic by the booked shorter route and of North Eastern Railway to point out the serious irregularity resulted in avoidable extra cost of Rs.7.71 crore on extra haulage of cement traffic over longer route for the period April 2000 to March 2003. The loss will continue occurring till the irregularity is rectified.
The matter was brought to the notice of Railway Board in October 2003 and their reply has not been received (February 2004).
2.2.2 Eastern Railway: Notification of incorrect distances for charge
Adoption of incorrect chargeable distances in respect of five stations on Eastern Railway led to undercharge amounting to Rs.6.72 crore
Local Distance Table of Eastern Railway in force from 1 January 1995 contained distances for charging goods traffic in local booking only, between stations on Eastern Railway system, except for five stations viz. Sealdah, Chitpur, Cossipore Road, Ultadanga Junction and Kidderpore (KP) Dock, for which the distances between Howrah were to apply. Traffic booked to these five stations from any station beyond Bardhman of Eastern Railway is carried through the shortest route via Howrah-Bardhman chord upto Dankuni and from Dankuni to these stations through Dum Dum Junction (avoiding Howrah). The length of the portion between Dankuni and Howrah (not traversed) is 15 kms., while the distances actually traversed to reach these destinations from Dankuni to Sealdah/Chitpur/Cossipore Road/ Ultadanga Junction is 22 kms and Dankuni to KP Dock is 36 kms.
While the freight was charged for the shortest distance (i.e. for Howrah via Dankuni), in respect of traffic to these stations, the distances actually traversed to reach the five destinations were more than the distances charged. Thus, there was an undercharge for a distance of 7 kms. [22 (-) 15] each in respect of traffic booked to Sealdah, Chitpur, Cossipore Road and Ultadanga Junction and for a distance of 21 kms. [36 (-) 15] in respect of KP Dock.
Review of local traffic booked to the above five stations from different stations of Eastern Railway beyond Bardhman revealed that during January 1996 to December 2002, 71,81,699.83 MT of different consignments (Stone chips, Coal, Steel, Cement) were booked to these stations involving undercharge of Rs.6.72 crore due to incorrect chargeable distances.
When the matter was taken up in March 2001 and in May 2002, the Railway Administration issued (10 December 2002) an erratum revising the Local Distance Table in force from January 1995 and Junction Distance Table No.3 in force from 1 April 1990. The Railway Administration also instructed the station staff to add 7 kms/ 21 kms respectively to the distance to and from Howrah for distances to and from stations mentioned above with effect from 11 December 2002 thereby vindicating the audit point.
Had the erratum been issued soon after the matter was brought to the notice of Railway Administration in March 2001, undercharge of at least Rs.1.51 crore for the period April 2001 to 10 December 2002 could have been avoided.
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and July 2003 respectively and their reply has not been received. (February 2004).
2.2.3 Eastern Railway: Incorrect charging of distance and non- realisation of special detention charges
Failure of Railways to include longer route in the rationalisation scheme and realise special detention charges led to a loss of Rs.1.45 crore
(A) Railway Board directed (May 1999) Eastern Railway to restore Petrapole-Benapole Broad Gauge (BG) Railway line between Eastern Railway (India) and Bangladesh Railway. The Divisional Railway Manager, Sealdah informed (June 1999) the Chief Commercial Manager, Eastern Railway that all goods traffic towards Bangladesh via Petrapole would be moved through Ranaghat-Bongaon section instead of via shorter route of Dum Dum-Bongaon section in order to complete formalities of customs clearance at Ranaghat. He, therefore, requested to refer the matter to Railway Board for its inclusion under rationlisation scheme before issuing rate circular for Bangladesh traffic. Despite this, a circular was issued (December 1999) showing the chargeable distance via Bongaon-Petrapole-Benapole as per the shorter route (i.e.Dum Dum Junction-Barasat-Bongaon-Petrapole). The above section was reopened for movement of goods traffic from 4 July 2000. The traffic to Petrapole via Ranaghat involved an additional distance of 31 kms over the charged distance (Dum Dum Junction-Barasat-Bongaon-Petrapole).
Audit scrutiny of records revealed that failure of Railway Administration to get this longer route included in the rationalised scheme resulted in undercharging of freight leading to loss of revenue to the tune of Rs.0.73 crore during the period July 2000 to March 2003. The Railway will continue to incur loss till remedial measures are taken.
(B) Para 11 (b) of commercial circular issued (December 1972) for booking and receipt of traffic to and from Bangladesh, stipulated that a special detention charge should be levied on consignments detained by Customs Authorities beyond a specified period on account of the party’s fault to fulfil the customs formalities and recovered at the customs checking station itself.
Scrutiny of records revealed that Naihati was a nominated customs checking station. In February 1996, the Railway Administration informed all concerned about the decision of Commissioner of customs, West Bengal, to shift custom operations from Naihati to Ranaghat Railway station with effect from 1 March 1996. The Railway Administration, however, failed to make necessary arrangement for collecting the special detention charge at Ranaghat. The consignments were being released without realisation of special detention charges due from the parties at fault. As there was no goods office at Ranaghat, the particulars of special detention charges were being intimated to Naihati goods office from time to time by the office of Train Examiner, Ranaghat. These charges were being accounted for in the station balance sheet of Naihati goods office. It was noticed from the balance sheet of Naihati goods office that out of Rs.1.09 crore billed for as special detention charges upto January 2003, Rs.0.16 crore were realised and Rs.0.21 crore were waived leaving a balance of Rs.0.72 crore. There is little scope for realisation of the same from the paries as the consignments had long ago been released to Bangladesh.
Thus, Railway Administration’s failure to include longer route in the rationalised scheme and realise special detention charges at the customs checking station led to a loss of Rs.1.45 crore [Rs.0.73 crore (+) Rs.0.72 crore].
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and October 2003 respectively and their reply has not been received (February 2004).
2.2.4 Northern Railway: Non-observance of rating/ routing orders
Non-observance of rating and routing instructions of Railway Board resulted in undercharge of Rs.1.13 crore during April 2001 to February 2003
According to General Order No.1 of 2000 (effective from 1 December 2000) issued by Railway Board, food grains traffic from stations of Northern Railway to stations on Chheoki-Jabalpur section of Central Railway was to be booked, routed and charged via Chheoki while traffic to stations reached via New Katni-Bilaspur, Bilaspur-Rourkela, Bilaspur-Gondia and Bilaspur-Vizianagaram (excluding) sections of South Eastern Railway was to be booked, routed and charged via Chheoki-Katni. Similarly, traffic for stations of South Eastern Railway reached via Kharagpur-Waltair section and Cuttack was to be booked, routed and charged via Mughalsarai-Gomoh section and Barang-Kapilas Road bye-pass avoiding Cuttack respectively.
A review by Audit of outward traffic of 36 stations on Northern Railway, inspected from time to time, revealed that food grain traffic from these stations to various stations on Central and South Eastern Railways during April 2001 to February 2003 had not been booked and charged by the routes specified in the above mentioned General order.
Thus, failure of the station staff to observe rating and routing instructions issued by Railway Board resulted in short collection of revenue amounting to Rs.1.13 crore during April 2001 to February 2003.
The matter was brought to the notice of Railway Administration in May 2003.
The Railway Administration in their reply of September 2003 and during discussion held in October 2003 stated that:
The reply is not tenable because Railway Administration did not furnish to Audit details of undercharge stated to have been detected by Inspectors of Commercial Branch and of those advised to the concerned Railways for recovery. Railway Administration also did not spell out whether there was any system in place to monitor and ensure recovery of such undercharges advised to the concerned destination Railways.
The matter was brought to the notice of Railway Board in September 2003 and their reply has not been received (February 2004).
2.3.1 Northern Railway: Excessive detention to wagons in Terminal Goods stationFailure of the Railway Administration to avoid excessive detention to wagons beyond detention targets fixed on operational requirements resulted in loss of earning capacity of wagons to the tune of Rs.26.15 crore
One of the most important parameters for judging the efficiency of a yard or a terminal goods station is the effectiveness of control over detention to wagons at various levels of operations. Detention to wagons beyond reasonable operational requirements leads to delays in loading, unloading and despatch of wagons/ rakes and consequential adverse effect on productivity of wagons. With a view to minimising the detention to wagons, the detention targets, beyond which detention to wagons should not exceed, are fixed by Railways and approved by Railway Board.
The target fixed by General Manager, Northern Railway for average detention to “All Wagons” handled in the terminal Goods Station (TGS), Varanasi (BSB) was 16 hours per wagon (reckoned from the time of receipt of a wagon into the yard to the time of its despatch from the yard).
An audit scrutiny of records of Operating Branch about detention targets fixed and achieved in respect of terminal goods station Varanasi revealed that the percentage of wagons detained was very high. Out of 1,36,611 wagons handled during 1998-99 to 2002-03 (January 2003), 1,29,406 wagons (94.72 percent) were detained beyond the permissible hours. The average detention per wagon during this period of 5 years was 49.77, 45.92, 37.85, 33.11 and 32.03 hours respectively. Although, the average detention per wagon decreased from 49.77 hours (1998-99) to 32.03 hours (2002-03), the average detention in 2002-03 was still 100 percent more than the permissible average limit of 16 hours per wagon. These 1,29,406 wagons suffered a detention of 31,89,911 hours (1,32,912 days) in excess of permissible’ All wagon’ detention target.
The matter of abnormal detention leading to loss of earning capacity of Rs.26.15 crore was taken up with the Divisional Railway, Lucknow (November 2002). The Divisional Railway, stating (December 2002) that the efforts would be made to minimise the detention attributed it to delay in arranging power & crew and poor condition of track between Varanasi station and the siding of Food Corporation of India (FCI).
The reply is not tenable because:
The matter was brought to the notice of Railway Administration in May 2003 and Railway Board in September 2003 but their reply has not been received (February 2004).
2.3.2 Western Railway: Heavy detention to Oil Tank Wagons at Railways’ fuelling installation
Failure of Railway Administration to take action to augment storage capacity of Nandurbar fuelling installation resulted in heavy detention to oil tank wagons and consequential loss of earning of Rs.11.74 crore
Considering the difficulties in piecemeal movement of tank wagons and abnormal detention, Railway Board directed all Zonal Railways (July 1994) to undertake a review of the existing diesel loco fuelling installations and draw up a time bound action plan for augmentation of the storage capacities of fuelling installations where the requirement of HSD oil was sizeable so that at least half a rake can be unloaded at a time. As per existing orders, a standard rake contains 70 four wheeled tank wagons.
Audit scrutiny of Nandurbar fuelling installation of Mumbai Division, Western Railway revealed (March 2002) that the daily requirement of HSD Oil at this installation was approximately 70 kilolitres (KL). The total storage capacity since April 1995 was 560 KL. A four wheeled tank wagon contains about 22 to 23 KL. Thus at a time 24 to 25 wagons can be unloaded provided there is no fuel in the storage tanks. Rakes consisting of 22 to 47 HSD oil tank wagons containing HSD oil ranging from 506 KL to 1081 KL were regularly received at this installation. Due to non-availability of sufficient storage capacity and also due to the fact that despatch of wagons to this installation was not prudently regulated, almost all the wagons were suffering detention. However, no action was taken to augment the storage capacity as desired by Board in 1994. During the period May 2000 to March 2003, 116 rakes suffered a total detention of 51164 days (excluding 5 hours free time) resulting in loss of earning capacity of Rs.11.74 crore.
Thus, the failure of Railway Administration to take action for augmentation of storage capacity at Nandurbar fuelling installation resulted in heavy detention to oil tank wagons and consequential loss of earning of Rs.11.74 crore.
The matter was taken up with the Railway Administration and Railway Board in May 2003 and September 2003 respectively. Railway Administration with the approval of Railway Board stated in January 2004 that the augmentation of storage capacity of HSD oil was not considered because of impending work of electrification of Udhna - Jalgaon section. Moreover, considering other economics of rake movement, full rakes of HSD oil tank wagons were supplied instead of restricting the rake size to 9 wagons to match the decanting capacity at Nandurbar. The reply is not based on facts. In fact the oil was not being supplied in full rakes and, therefore, the so called economical advantage of supplying full rakes was not being achieved. Moreover, the supply was not regulated as per requirement and most of the times, fresh supplies were received even when the wagons received previously were yet to be decanted.
2.3.3 Western Railway: Erroneous despatch of wagons to Workshop
The failure of the operating staff to follow the rules for handling the wagons in yards and erroneous despatch of fit wagons to Workshop resulted in avoidable detention and consequential loss of earning capacity amounting to Rs.8.71 crore
Wagons requiring heavy repair which can not be attended to in the sick line in a yard as also wagons due for Periodical Overhauling (POH)/ Routine Overhauling (ROH) are sent to Workshops earmarked for these activities. No wagons other than the wagons requiring repair/POH/ROH should be sent to workshop. In order to facilitate proper identification of wagons due for POH, next due date of POH is marked on each and every wagon. Carriage & Wagon Staff (CWS) and Train examination (TXR) staff are required to mark the wagons due for POH as also the wagons requiring repair for sending them to the nearest nominated workshop. The operating staff segregates such wagons from the rest and despatches them to the Workshop.
Audit scrutiny of records of Wagon Repair Workshop, Kota on Western Railway revealed (November 2002/ February 2003) that out of 20230 wagons received in the Workshop during 2000-01 to 2002-03 (January 2003), 4420 wagons (21.85 per cent) were neither due for POH/ROH nor required any repair. Hence these wagons were returned for traffic use after detention from 1 to 161 days in the Workshop. The despatch particulars in respect of 3593 wagons made available to Audit revealed that these wagons suffered avoidable detention of 19393 days and consequential loss of earning capacity of Rs.8.71 crore besides unnecessary to and fro haulage which could not be worked out for want of sufficient details.
The matter having been taken up with the Workshop authorities in January 2003, it was stated by them in March and May 2003 that operating staff was sending all the wagons, irrespective of whether the same were marked for POH/ROH or repair, to the Workshop to avoid shunting.
The matter was taken up with Railway Administration in May 2003 and with Railway Board in August 2003. Railway Administration with the approval of Railway Board stated (December 2003) that due to closure of marshalling yards, reformation of rakes after detaching wagons due for POH has become difficult. It was also stated that due to non-availability of loop lines at most of the stations, detachment of wagons due for POH from the rakes would involve use of main lines and result in detention to trains and loss of earnings. Railway Administration with the approval of Railway Board again stated in December 2003 that in a number of cases it is operationally disruptive to carry out shunting to form rakes of wagons due for POH and thus in the interest of efficient operations, rakes sent to Workshops also contain wagons not due for POH. The argument is not tenable because with an ostensible view to avoid detention to trains on mainline, for which adequate evidence has not been provided, Railway Administration in fact caused heavy detention to fit wagons at the workshop.
2.3.4 Southern Railway: Detention to wagons received for POH at CW, PER
Abnormal detention to wagons at CW/PER, before being taken up for POH resulted in delay in their release for traffic use and caused loss of earning capacity of Rs.8.63 crore
One of the major activities of Carriages and Wagons Workshop/ Perambur (CW/ PER) is the POH of wagons. Wagons (Broad Gauge), terminating on Southern Railway and found due for POH are sent to CW/ PER.
In Paragraph No.7 (g) of Chapter V of Report No.10 of 1995 of the Comptroller and Auditor General of India, a comment was made on the detention to wagons in excess of three days before they are taken up for POH. In their Action Taken Note, the Ministry of Railways (Railway Board) had stated (August 1995) that steps had been initiated which should help in controlling the detention of rolling stock prior to POH.
Review in audit indicated that the claims made by the Railway Board had not fructified and abnormal detention to wagons before being taken up for POH at CW/ PER was continuing. This ultimately delayed their release for traffic use and caused loss of earning capacity. During the period 1999-2000 to 2002-2003, 627 wagons suffered abnormal detention of 37,921 wagon days (after allowing 3 days for waiting before being taken up for POH) at CW/ PER before POH, causing loss of earning capacity of Rs.8.63 crore.
When the matter was taken up with the Railway Administration (April 2003), they elaborated the infrastructural limitations in the workshop causing detention to wagons prior to their being taken up for POH. The matter was also taken up with Railway Board (September 2003). The Railway Administration, with the approval of Railway Board, replied (November 2003) that steps were taken to minimise detentions and that the shop’s ineffective percentage was below the Railway Board’s target. The complacency regarding achieving the Railway Board’s target does not belie the fact of abnormal detentions to wagons and the resultant loss of earning capacity.
2.3.5 South Central Railway: Abnormal detention of wagons and liberal waiver of demurrage chargesRoutine waiver of demurrage charges by Railway Administration resulted in customers not adhering to the time limits fixed for loading of wagons which in turn led to abnormal detention and loss of earning capacity of Rs.7.09 crore
As per rules, the normal free time allowed for loading the wagons in cement sidings is 9 hours (plus additional free time allowed for placement, removal etc.). Detention of wagons beyond this free time will attract levy of demurrage at the rates prescribed by Zonal Railways as a deterrent against detentions of Railway’s Rolling stock. The demurrage levied can be waived by officers at different levels as per powers delegated to them, duly taking into account the factors for its accrual.
M/s. India Cement Ltd. siding served by Kalamalla station is situated on Gooty-Nandalur section of Guntakal Division. In May 1996 a Joint Time and Motion Study was conducted by Railway Administration and the siding authorities to assess the infrastructural facilities available at Kalamalla siding and average time taken for loading activities. Railway Administration granted an additional free time of 5 hours for loading a 40 BCN rake and 4 hours for less than 40 BCN rake and other type of wagons.
Audit scrutiny of records at India Cement siding indicated that despite granting additional free time of 5/4 hours, during April 2000 to January 2003, out of 62,408 wagons, 61,323 wagons suffered detentions beyond the permissible free time. A total amount of Rs.1.46 crore was levied as demurrage charges out of which, an amount of Rs.0.99 crore (67.79 per cent) was waived.
When the matter was taken up with the Railway Administration in September 2001, the Railway Administration stated that demurrage charges were not a source of revenue and those charges were levied only as a deterrent for discouraging detentions to rolling stock. Further, the waivers were granted in exceptional circumstances as per rules in force after taking into account the reasons furnished by the cement company.
The arguments are not tenable. The deterrent effect of demurrage charges is completely lost due to liberal waivers. In fact, liberal and routine waiver on stereotyped reasons like voltage drops, non-availability of labour etc. encourage customers to view wagon detentions as a non-serious issue. The Public Accounts Committee (PAC) in its Hundred and forty eighth Report (1974-75) pointed out that large amount of accruals (21 to 27 per cent) and waiver of demurrage charges are indicative of serious malaise, which needs to be curbed more vigorously. The PAC also felt that the existing deterrents were not having the desired effect and hence there was need for more vigorous steps for curbing this evil which was as high as 67.79 per cent.
Similar scrutiny of records at Indian Cements Limited, Yerraguntla and Orient Paper & Industries Limited, Mandamari indicated that during April 2000 to January 2003, 39,821 wagons out of 40,120 suffered detentions beyond the permissible free time. A total amount of Rs.1.55 crore was levied as demurrage charges. Out of this, an amount of Rs.1.12 crore (72.26 per cent) was waived liberally by the Administration under the powers of officers at different levels.
Thus, routine waiver of demurrage charges resulted in customers not adhering to the time limits fixed for loading of wagons, which in turn led to abnormal detentions and loss of earning capacity of Rs.7.09 crore during April 2000 to January 2003. The demurrage waived alone amounted to Rs.2.11 crore.
When the matter was taken up (June 2003) with Railway Administration, it was contended (September 2003) that:
The above contentions are not tenable because
The matter was brought to the notice of Railway Board in October 2003 and their reply has not been received (February 2004).
2.3.6 Central Railway: Injudicious formation of POL rakes
Formation and booking of rakes consisting of tank wagon in excess of the unloading capacity of a station resulted in avoidable detention to wagons and consequential loss of earning capacity amounting to Rs.6.25 crore
Less detention of rolling stock improves its turn round and increases its earning capacity. Thus, it is imperative on any Railway system that the available stock is utilised in such a manner that detention is minimised.
Bhadli Station of Central Railway is open for booking of certain stream of traffic and also for receiving POL tank wagons in full rake loads. As per existing rules, parties are allowed the benefit of train load rates if they indent for 70 tank wagons and load all the wagons supplied subject to a minimum of 65.
Audit scrutiny of records of Bhadli station revealed that there is only one line on which goods of parties are handled. In order to handle POL traffic, Railway Administration has provided sumps to accommodate 65 tank wagons at a time. Rakes consisting of tank wagons ranging from 64 to 73 are being booked to this station as the same has been declared capable of handling full rake load of POL traffic. As the line accommodates only 65 tank wagons and there is no other line, the balance wagons are carried to Bhusaval station, which is at a distance of 15 kms. When the first lot of wagons is released after unloading by the parties the same is hauled to Bhusaval station yard where it is stabled till the balance wagons of the rake are placed for unloading and released by the parties. In the process 137 rakes (92.56 per cent) out of 148 suffered detention ranging from 2 hours to 426 hours beyond permissible free time of 10 hours. Total detention suffered by 137 rakes during April 2001 to March 2003 was for 35965 days thereby resulting in loss of earning capacity of Rs.6.25 crore. When the matter was taken up with the local Administration in March 2003, they stated in July 2003 that there is a proposal for remodeling of the Bhadli yard and the problem of detention will be over after the yard is remodelled.
Railway Administration took no action either to increase the unloading capacity of the line to accommodate a standard rake or to advise the booking Railways to form rakes of 65 wagons for traffic meant for Bhadli station. The Railways could have saved a lot of expenditure incurred on movement of locomotives for hauling the wagons to and fro Bhusaval yard and avoided detention to wagons if either of the steps were taken.
Thus, formation and booking of rakes consisting of tank wagon in excess of the unloading capacity of a station resulted in avoidable detention to wagons and consequential loss of earning capacity amounting to Rs.6.25 crore.
The matter was brought to the notice of Railway Administration in May 2003 and Railway Board in August 2003. Railway Administration with the approval of Railway Board stated in December 2003 that by loading full rake from starting point to destination, full advantage can be taken by the Railway of the operating resources such as hauling power, sectional capacity etc. The reply is not tenable because the fact remains that all the rakes suffered heavy detention at the unloading point nullifying the advantage gained at the loading point.
2.3.7 South Central Railway: Incorrect adoption of working hours at POL sidings
Non-adoption of appropriate working hours for POL sidings as per agreement resulted in unnecessary detention to rolling stock and loss of earnings to the tune of Rs.4.57 crore
In order to maximise the utilisation of tank wagons, the Railway Board, in consultation with the Oil Companies, decided (February 1998) to divide sidings into three categories, based on the number of rakes received per month. It was agreed that the unloading hours would depend upon the number of rakes being handled per month by the sidings. In case of sidings handling rakes upto 10 BTPN rakes/ 16 four wheeler rakes per month, the unloading hours were to be from sunrise to sunset (06 hours to 18 hours); in cases where 11 - 21 BTPN rakes/ 17 - 31 four wheeler rakes were being handled per month, the unloading hours were to be from 06 hours to 22 hours and in cases where 22 or more BTPN rakes/ 32 or more four wheeler rakes were being handled per month, the unloading hours were to be round the clock.
Zonal Railways were also directed to categorise the different sidings based on the average number of rakes received at each siding during the last six months. The details were to be advised to Board by 2 March 1998 so that a consolidated list could be given to the Oil Industry for implementation.
For sidings handling 11 rakes and above per month, the Oil Companies had agreed to provide the required infrastructure like lighting, fire fighting, manpower etc. by 15 December 1998.
This decision was circulated to all the Railways on 13 February 1998.
Review of the position at six POL sidings viz., Surareddipalem, Charlapalli, Sanathnagar, Warangal, Guntakal and Cuddapah revealed that though they were handling more than 10 rakes per month, the working hours followed by the siding were only 6 hours to 18 hours. The Railway Administration failed to advise the Board as required in their letter of February 1998 or take up with the Oil Companies to arrange for the infrastructure like lighting, fire fighting, manpower etc. As a result, the Railway Administration was unable to increase the working hours (06 hours to 22 hours). This resulted in avoidable detention to 1253 rakes for 30,362 wagon days during April 2000 to March 2003, causing loss of earnings of Rs.4.57 crore.
The matter was brought to the notice of Railway Board in August 2003. South Central Railway, with the approval of Railway Board, stated (October 2003) that:
These arguments are not tenable because:
2.3.8 Western Railway: Detention to wagons moving via Break-of- gauge point
Railway Administration’s failure to enforce the conditions stipulated for movement of traffic through Break-of-gauge point resulted in detention to wagons and consequential loss of earning capacity of Rs.3.48 crore
The Break-of-gauge transhipment point at Ratlam station, Western Railway was closed in 1993. On receipt of proposals from various parties for special arrangements for movement of traffic from stations on one gauge to destinations on another gauge through a dump at the Break-of-gauge point, the Board delegated powers to Zonal Railways (July 1994) for introducing such special arrangement with the approval of Associated Finance. As per conditions laid down by Board, the parties were to load their consignments from the originating Metre Gauge (MG) stations and unload them in the dump at the Break-of-gauge point. The reloading into Broad Gauge (BG) wagons at Break-of-gauge point was to be done from the dump. As per orders of the Board, such special arrangement would not confer any right on the party to claim relaxation in levy of demurrage/ detention charges as per normal rules. Accordingly Western Railway Administration permitted various cement companies to move their traffic via Break-of-gauge dump.
Audit scrutiny of records of Ratlam transhipment point carried out in April 2002 revealed that cement traffic booked by three MG stations of Western Railway viz. Ranapratap Nagar, Nimbahera and Jawad Road was being shifted directly from MG wagons to BG wagons instead of unloading the wagons and storing the contents in dumps for reloading. As a minimum of 3 MG rakes were required to complete loading of one BG rake and there was considerable time gap between the arrival of the first rake and the last rake of MG wagons, most of the BG wagon rakes suffered detention. Audit scrutiny revealed that out of 245 rakes of BG wagons received at Ratlam during April 2000 to March 2003, 147 rakes suffered detention ranging from 1 hour to 226 hours beyond the permissible free time of 9 hours. Demurrage/ detention charges of Rs.1.05 crore recoverable as per normal rules were not levied at all.
Thus, failure of the Railway Administration to force the parties to unload and store the contents of MG wagons in dumps resulted in detention to BG wagons and consequential loss of earning capacity of Rs.3.48 crore during April 2000 to March 2003. Demurrage charges, which are levied as a deterrent measure to prevent detention, were neither levied nor recovered.
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and August 2003 respectively and their reply has not been received (February 2004).
2.4.1 Southern and South: Non-recovery of hire charges for Central Railways Rolling Stock and Motive Power from KRCL
Failure of the Railway Administrations to pursue the matter regarding recovery of hire charges for use of Railways’ rolling stock with the Konkan Railway Corporation Limited led to non-realisation of Rs.42.84 crore
Konkan Railway Corporation Limited (KRCL) was incorporated on 19 July 1990 as a Public Limited Company under Indian Companies Act, 1956. KRCL was set up on Built, Operate and Transfer (BOT) concept for construction and operation of KRCL Line connecting Roha and Mangalore. The Railway Board decided (June 1996) that KRCL should not purchase any Rolling Stock and the Indian Railways instead would provide these. KRCL would pay hire charges for the Rolling Stock remaining on its system on the same basis as applied for Inter Railway Financial Adjustments for utilisation of Rolling Stock by any Zonal Railways.
In November 1998, KRCL, requested the Railway Board to defer the hire charges for Rolling Stock and Motive Power for a period of three years.
The Railway Board, taking into account the financial position of KRCL and finance assistance extended by Indian Railways to KRCL, agreed (August 1999) to the proposal and deferred the payment of hire charges for a period of three years (1997-98 to 1999-2000).
In August 2000, the Railway Board asked the KRCL to pay the hire charges for the year 2000-2001 and also the outstanding dues by 31 March 2001, as there was no justification for further deferment. The Board again reiterated (January 2001) its decision to all Zonal Railways and KRCL to withdraw deferment of hire charges and asked KRCL to pay the dues up to 2000-01.
Audit scrutiny of the position of recovery of hire charges of Rolling Stock and Motive Power provided by the Southern and South Central Railways to KRCL revealed the following:
The matter was brought to the notice of the Southern Railway Administration in May 2003 and their reply has not been received (December 2003).
Thus, failure to effectively pursue the matter and resolve the pending issues has resulted in the non-recovery of Rs.42.84 crore against hire charges of Rolling Stock and Motive Power.
The matter was brought to the notice of Railway Board in October 2003 and their reply has not been received (February 2004).
2.4.2 Central Railway: Loss of traffic due to non-granting/delay in granting of ‘station to station’ rates
Lackadaisical approach of the Railway Administration and Railway Board in granting ‘station to station’ rates caused the Railways to lose assured traffic earnings of Rs.27.92 crore per annum
As per existing rules, Railway Administration may quote 'station to station' (STS) rates between specific pairs of stations provided the traffic offered by a party is either in addition to what was being carried by rail before giving concessional STS rates or is a new traffic. Zonal Railways were required to obtain technical clearance for quotation of STS rates from Board till April 1999 when this stipulation was removed and they were permitted to allow 10 per cent concession in rates to traffic chargeable up to class 100 and above. In June 2001, Railway Board (RB) further relaxed the conditions and permitted Zonal Railways to allow 10 per cent, 15 per cent and 20 per cent concession in rates to commodities chargeable at class 105 to 140, above 140 to 180 and above 180 respectively. Rules also provide that before quotation of STS, a firm commitment with regard to offer of specified quantity of traffic may be obtained in writing.
Audit scrutiny of records of Commercial and Accounts departments at Central Railway Zonal Headquarters in September and October 2002 revealed the following:
1. M/s. Ispat Industries Limited, Navi Mumbai requested Central Railway (CR) in May 2000 to grant 25 per cent concession in 'train load rates’ for movement of their traffic of finished steel products in HR Coils or HR sheets from Nagothane to Ghaziabad public siding. The party had stated that their plan was to despatch around 25000 tonnes of finished products per month to Ghaziabad from May 2000 and out of this at least 15000 tonnes per month would move by Railways.
The Commercial Department examined the proposal and felt that 25 per cent concession was competitive with road rates and was expected to bring additional earning of Rs.2 crore per month. The Finance Department, however, proposed grant of 15 per cent concession on the tariff rates. The proposal was sent to Railway Board for grant of STS in June 2000. RB informed CR in November 2000 that the proposal has not been agreed to and keeping in view the changes in road rates due to hike in diesel prices, the proposal may be re-examined and revised proposal with fresh commitment may be sent to RB. CR re-examined the proposal and sent the same to RB on 26 December 2000 with the recommendation that the rates after allowing 15 per cent concession were competitive with road rates and party had agreed for offering 15000 tonnes of HR coils per month, which will fetch additional earning of Rs.22.45 cores per annum to the Railway.
Review of RB's file revealed that on receipt of revised proposal, RB called for enclosures to their letter of 26 December 2000. Though the enclosures were sent to RB in February 2001, further action taken by RB on this proposal was not available on records.
In the meantime, the party, in anticipation of favourable STS rates, had started offering HR coils traffic and despatched 52,197 tonnes giving additional revenue of Rs.8.69 core during May 2000 to September 2000. They stopped offering this traffic as no decision was communicated to them.
On receipt of revised guidelines for quoting STS rates and RB's directions of August 2001, CR took some steps to capture the steel traffic. These steps were not adequate as no specific proposals were made to the party.
Thus assured traffic earning of a minimum of Rs.22.45 crore per annum was lost due to Railway's indecisiveness on arriving at acceptable STS rates.
2. M/s. Associated Cement Companies Limited (ACC) was moving its cement traffic from Wadi, a Broad Gauge (BG) station, to Miraj a Narrow Gauge (NG) station, via Kurduwadi transhipment point. As Kurduwadi to Pandharpur NG section was to be closed for booking due to gauge conversion work from 15 April 1999, M/S. ACC requested CR to grant them STS rates for moving their traffic from Wadi to Miraj via all BG route which was longer by 274 kms on the same rate as they were paying for this traffic via BG-cum-NG route. The proposal was examined by CR and sent to RB for approval as the concession in rates involved was up to 22 per cent, which was beyond the power of Zonal Railways. RB communicated their approval on 20 July 1999 with the stipulation that party should offer and load a minimum of 10000 tonnes of cement as committed and this concession was limited till the gauge conversion was completed and section opened for traffic. CR issued the notice on 17 November 1999 and party started loading of Cement traffic under STS rates. Total of loading of cement traffic till March 2001 was 198822 tonnes of cement which fetched net revenue of Rs.8.95 crore
As the gauge conversion work of Kurduwadi -Pandharpur section was to be completed by June 2001, M/S. ACC again requested CR in March 2001 to extend the STS rates and allow them to move their traffic via all BG route as no transhipment facilities were being provided at Pandharpur. CR, however, did not finalise this proposal till 1 July 2001 when the section between Kurduwadi and Pandharpur was opened to traffic. In the absence of STS rates party stopped offering traffic from 1 July 2001. CR ultimately recommended to RB in December 2001 that STS rates with 22 per cent concession may be approved to retain this traffic. RB, however, took another three months and the STS rates were approved on 22 March 2002. In the meantime party had engaged an agency for transportation of their traffic by road at cheaper rates and did not show any interest in moving their traffic by Rail. The delay in taking a decision for granting STS rates caused the Railway to lose traffic of 10000 tonne per month and loss of revenue of Rs.5.47 crore per annum.
Thus, the lackadaisical approach of the Railway Administration and RB has caused the Railways loss of assured traffic earnings of Rs.27.92 crore per annum.
The matter was brought to the notice of Railway Administration in April 2003. Railway Administration stated (July 2003) that STS rates are granted only if it is financially viable and that Railway Administration can not function as per the terms dictated by the party. The reply is not tenable because, in the case of M/s. Ispat Industries, the proposal for granting 15 per cent concession was made by the Railway after considering the financial viability and the party had also accepted this with the same traffic commitment. No action was, however, taken either to accept or reject the proposal. In the case of M/s. ACC, the Railway Administration was aware that transhipment facilities at Pandharpur were not being provided and this would cause inconvenience to the party to resume traffic even after gauge conversion of the Kurduwadi - Pandharpur section. Thus, the decision of RB not to extend the STS rates already in force led to loss of assured traffic earnings.
The matter was brought to the notice of RB in September 2003. The Railway Administration with the approval of RB reiterated, in October 2003, their earlier stance, which is not tenable.
2.4.3 Northeast Frontier Railway: Loss due to avoidable use of additional loco
Failure of Railway Administration to make timely provision for engine reversal facility at New Teznarayanpur resulted in loss of Rs.11.61 crore
Katihar (KIR) - Manihari (MHI) - Teznarayanpur (TNPR) is a single line Metre Gauge (MG) section (32.58 kms.) in KIR division of Northeast Frontier Railway. The terminal station viz. TNPR was completely washed out on 14 September 1997 due to heavy flood and train services were suspended from 14 September 1997 to 17 September 1997 beyond MHI. The terminal station was shifted to Katakosh and renamed as New Teznarayanpur (NTNPR) and train services were resumed beyond MHI with effect from 18 September 1997. Due to non-availability of engine reversing facilities at NTNPR, an extra loco was provided at MHI station and was being attached in the rear of the Dn trains to NTNPR. From NTNPR, the rear engine functioned as train engine for Up trains upto KIR. On arrival at MHI, the rear engine of the Up train was being detached and kept at MHI for repeating the system for the next Dn train.
A team was constituted (May 1999) to study the reasons for un-remunerativeness and suggest ways and means for improving the viability. In their report submitted in September 1999, the study team recommended reconstruction of TNPR station with engine reversing facilities to save one diesel engine which was being utilised for banking purposes between MHI and TNPR and also to avoid shunting at TNPR as there was no terminating facility.
The work for construction of halt station including the engine reverse facilities at TNPR was proposed from July 1999 onwards but the work for construction of halt station was approved only during 2002-03 at a cost of Rs.19.38 lakh. Newly constructed engine escape line at TNPR was certified fit to run and handed over for traffic use with effect from 11 January 2003 and single loco was running on the line since 11 January 2003. Failure to provide these facilities resulted in loss of Rs.11.61 crore for the period October 1999 to December 2002.
The matter was brought to the notice of Railway Administration and Railway Board in May 2003 and September 2003 respectively. Railway Administration with the approval of Railway Board stated (December 2003) that due to frequent change of course of the river Ganga, they had no other alternative than to wait for stabilisation of embankment which started taking place in 2001. Thereafter, they proposed to construct an engine reversal line at Katakosh (NTNPR).
The reply is not convincing and appears to be an afterthought as no reference to this problem has been made by the study team that recommended reconstruction of the station with engine reversing facilities. Moreover, the Railway Administration has been proposing inclusion of this work from July 1999 onwards to Railway Board.
2.4.4 South Central Railway: Restriction of enhanced carrying capacity of BOXN wagons to only coal and iron ore
Failure to extend the enhanced carrying capacity (CC) of CC plus 2 tonnes in the case other commodities, as allowed in the case of coal and iron ore, resulted in loss of Rs.5.54 crore
Rules provide that commodities for which the notified minimum weight condition is carrying capacity (CC), the minimum weight for charge for such commodities in BOI, BRS, BRH, BOX, BCN, BOBS and BOBX wagons will be marked CC plus 2 tonnes. BOXN wagons are improved version of BOX wagons and this enhanced minimum weight of CC plus 2 tonne in these wagons is not applicable to commodities other than coal and iron ore for which separate orders were issued from time to time.
Some commodities like Dolomite, Limestone, Cement Clinker, Barytes are transported from different sidings on South Central Railway in BOXN wagons to various destinations. Though these commodities can also be loaded to the extent of CC plus 2 tonnes in BOXN wagons on par with coal and iron ore, they were being loaded to the extent of only carrying capacity of the wagons and charged for accordingly.
Review in audit revealed that due to non-application of enhanced minimum weight condition in respect of these commodities, the Railways sustained loss in freight of Rs.5.54 crore during the period April 2000 to February 2003 in respect of 16,223 BOXN wagons loaded in five sidings viz. SAIK, Karepalli, Visakhapatnam Steel Plant Siding, Jagayyapeta, L&T Siding, Awarpur, Rajashree Cement Siding, Malkhaid Road and Koduru.
The matter was brought to the notice of the Railway Administration in May 2003 and Railway Board in October 2003. In their reply Railway Administration, with the approval of the Railway Board stated (November 2003) that Railway Board has permitted the loading and charging of coal upto CC plus 2 tonne and permitted Zonal Railways to load and charge Iron ore keeping in view the feasibility of doing so. CC plus 2 tonnes condition was not extended to other commodities as it was felt that the density of these commodities is much higher and in the absence of weighment facilities, traders may load these commodities even more than CC plus 2 tonne thereby endangering the safety of wagons. The reply is not tenable because in the absence of weighment facilities the overloading can be done even in the existing circumstances.
2.4.5 Northern Railway: Non-electrification of a sidingIndecisiveness on the part of both Central Organisation for Railway Electrification and Northern Railway Administration resulted in non-electrification of a siding and consequential loss of earning capacity of Rs.2.38 crore on account of detention to the rolling stock
As per Railway Board’s orders of 14 September 1994, sidings on sections under electrification or planned for electrification shall be wired at Railways’ cost, if found justified. Hindustan Petroleum Corporation Limited (HPCL) siding taking off at Amausi is connected to Lucknow (LKO) - Kanpur (CNB) section of Northern Railway.
In July 1998, Railway Board sanctioned a detailed estimate for electrification of LKO - CNB section. No provision for electrification of this siding was included in the estimate on the ground that the work was to be taken as a deposit work at the cost of the siding owner.
In October 1998, when the electrification of the LKO - CNB section was about to commence, Senior Divisional Operations Manager, LKO brought to the notice of the Central Organisation for Railway Electrification, Allahabad (CORE) that non-electrification of the HPCL siding would lead to detention of POL traffic and requested for its simultaneous electrification. Again in July 1999, he reiterated the proposal by inviting their attention to Railway Board’s orders of September 1994. CORE, however, neither responded nor pursued the matter with Northern Railway. The electrification of LKO-CNB was completed (July 2000) but the HPCL siding at Amausi was not electrified.
In September/ October 2000, Railway Board clarified that the existing sidings where Rate of Return was at least 14 per cent based on the traffic offered during the previous 24 months should be electrified at Railways’ cost.
Later, the matter was reviewed at the instance of Chief Operations Manager, Lucknow and a detailed estimate of Rs.53.34 lakh for electrification of this siding was prepared (February 2001). In June 2001, the Sr. Divisional Operation Manager, Lucknow requested M/s. HPCL to deposit the estimated cost of Rs.53.34 lakh so that the work could be executed. M/s. HPCL pleaded (July 2001) that as per the Railway Board’s orders, the cost of electrification of existing sidings should be borne by the Railways. No decision has, however, been taken by Northern Railway Administration in this regard so far (August 2003).
Consequently, the HPCL siding continued to be non-electrified. This resulted in detention to locos and tank wagons at CNB on account of change of traction leading to consequential loss of earning capacity.
The matter was taken up with the CORE authorities in November 2001 and December 2002. In reply, they stated (May 2003) that Northern Railway was required to send a proposal for electrification of the HPCL siding at Amausi, duly approved by the General Manager but no such proposal had been received despite repeated requests by the latter.
Thus, lack of co-ordination and indecisiveness on the part of both CORE and Northern Railway led to detention of locos and tank wagons at Amausi and consequential loss of earning capacity of Rs.2.38 crore for the period July 2000 to April 2003.
The matter was brought to the notice of Railway Administration in June 2003. The Railway Administration stated (July 2003) that
The Railway Administration’s reply is not tenable because:
Railways have already suffered an avoidable loss of Rs.2.38 crore and would continue suffering a recurring loss of about Rs.0.87 crore per annum (assessed by Audit) due to their insistence on electrifying the siding at party’s expense contrary to the existing orders of Railway Board. The matter was brought to the notice of Railway Board in October 2003 and their reply has not been received (February 2004).
2.4.6 Southern Railway: Delay in cancelling an uneconomic train
Delay in implementation of Railway Board's directives for diverting/ cancellation of trains resulted in loss of Rs.2.19 crore
The new lines between Penukonda (PKD) - Sri Sathya Sai Prashanti Nilayam (SSPN) and SSPN - Dharmavaram (DMM) were commissioned in November 2000 and February 2002 respectively. A bypass line between Pendekallu (PDL) and Gooty (GY) was inaugurated during December 2001.
The train service (6503/ 6504) between SSPN - PKD - Bangalore City (SBC) with seven coaches was commenced in November 2000. However, due to poor patronage, the composition of the train was reduced to four coaches in June 2001.
In view of availability of bypass line between PDL and GY which would enable diversion of trains from Secunderabad via SSPN and poor patronage of train No.6503/6504 even after reduction of the composition of coaches to four, Southern Railway, in consultation with South Central Railway, proposed to Railway Board in February 2002 diversion of four trains to run via SSPN and cancellation of train No.6503/6504.
Though the proposals were approved by the Railway Board in April 2002, the Southern Railway Administration cleared the cancellation of train No.6503/6504 and diversion of train Nos.433/434 to run via SSPN only in October 2002. The Southern Railway Administration failed to take prompt action and freeze in April 2002, the Advance Reservation beyond June 2002 (60 days from April 2002). Instead, the Railway Administration communicated the freezing of Advance Reservation beyond 22 August 2002 only.
Failure of the Railway Administration to either cancel the train No.6503/6504 or to freeze Advance Reservation beyond June 2002 resulted in loss of Rs.2.19 crore, after providing two months from April 2002 for Advance Reservation period.
When the matter was brought to the notice of the Railway Administration and Railway Board in April 2003 and August 2003 respectively, the Railway Administration, with the approval of Railway Board, stated (November 2003) that it was very clear from Railway Board’s orders that the event of cancellation of train No.6503/ 6504 should follow the event of diversion of train No.433/ 434. The diversion of trains could not be done earlier as an early date for inauguration of the new line by the Chief Minister of Andhra Pradesh and other high dignitaries could not be fixed due to security reasons.
Delay in inauguration by high dignitaries cannot be used as a reason for incurring loss.
2.4.7 Eastern Railway: Non-realisation of shunting charges
Non-preparation of agreement, tracing plan and non-execution of final agreement with Calcutta Electric Supply Corporation resulted in non-realisation of shunting charges of Rs.1.54 crore
Interchange point of any private siding is the running line upto which railway engine goes to leave the loaded rake and draws out the empty rake. From the said point, the siding owner should draw out loaded rakes for their siding and leave the empty rakes. As per existing rules, fixation of interchange point is extremely necessary for levying of shunting charges. The shunting charges are levied from the time the railway engine leaves the point of interchange and enters the private portion of the siding till its return to the point of interchange.
Calcutta Electric Supply Corporation’s (CESC) Power generating station siding was opened in October 1998 at a distance of 7 kms from the serving station Budge Budge. Necessary shunting charges were to be levied against the siding owner as per notification issued in 1998 since the railway engine was required to work within private portion of sidings.
Review of records revealed that there was a dispute on the realisation of shunting charges from the siding owner as there was no demarcated interchange point for the siding. The siding owner had deposited a lumpsum amount of Rs.0.30 crore in August 1999 on Railway’s Administration assurance for an early final decision on the dispute from their Headquarters.
In July 2001, the Railway Administration recast the bill for Rs.1.07 crore for the period October 1998 to December 2000. The siding owner, however, did not pay the balance of Rs.0.77 crore (Rs.1.07 crore - Rs.0.30 crore).
In August 2002, Chief Commercial Manager, Eastern Railway requested Divisional Railway Manager, Sealdah to settle this issue immediately since a sizable amount was outstanding due to dispute over interchange point.
The interchange point had not been decided so far due to non-preparation of agreement, tracing plan and non-execution of final agreement with the siding owner. The Railway Administration failed to realise the balance amount for the period ended December 2000 from the siding owner. Besides, no bill for shunting charge was preferred since January 2001.
Audit assessed Rs.0.77 crore (calculated on the basis of average shunting hours per rake during 2000) towards shunting charge in respect of 1140 rakes sent to CESC siding from Budge Budge yard during January 2001 to January 2003.
Thus, due to non-preparation of agreement, tracing plan and non-execution of final agreement with the siding owner, Railway Administration could not resolve dispute over the interchange point and consequently, an amount of Rs.1.54 crore remained unrealised.
The matter was brought to the notice of the Railway Administration and Railway Board in May 2003 and October 2003 respectively and their reply has not been received (February 2004).
2.4.8 North Eastern Railway: Non-collection of shunting charges
Non-collection of shunting charges for shunting operations by railway engine in two sidings of M/s. Indian Oil Corporation resulted in loss of Rs.1.03 crore
As per codal provisions, where Railway engine goes beyond the point of interchange for shunting in the siding, shunting charges are recoverable for the period Railway engine remains in the siding. Non-recovery of shunting charges in respect of 2 sidings on North Eastern Railway aggregated to Rs.1.03 crore as discussed below:
(i) An assisted siding of M/s. Indian Oil Corporation (IOC) for traffic of petroleum products with serving station at Raxaul was opened on 16 October 1995. No agreement was executed with the siding owner.
As the siding had no engine of its own, Railway engine was being used for shunting operations beyond the point of interchange.
Audit scrutiny (December 2000) of records of Raxaul station revealed that the shunting charges for shunting operations by Railway engine in the siding were not being collected from M/s. IOC.
On this irregularity being pointed out by Audit (January 2001), the Railway Administration stated (March 2001) that the point of interchange for the siding was not fixed. Siding charges per trip being collected cover the total time from the middle of the Goods Shed of serving station to the dead end of the siding and, thus, the siding charges cover the shunting charges also. The reply is not tenable in view of the following:
The shunting charges recoverable from the siding for the period from December 1995 to November 2002 aggregated Rs.0.72 crore.
(ii) Similarly, during audit of accounts of Indian Oil Refinery Siding/ Barauni (December 2002), it was noticed that shunting charges for shunting operations by a railway engine in the siding beyond the point of interchange were not being levied and collected. Non-levy of shunting charge for the shunting operations performed by Railway locomotives during July, 2001 to 15 January, 2003, resulted in loss of revenue to the extent of Rs.0.31 crore.
The matter was brought to the notice of Railway Administration and Railway Board in April 2003 and October 2003 respectively and their reply has not been received. (February 2004).
2.4.9 North Eastern Railway: Supply of unfit tank wagonsSupply of unfit tank wagons for loading of POL traffic resulted in loss of freight of Rs.1.40 crore besides avoidable expenditure of Rs.0.28 crore on their empty haulage
For loading Petroleum Oil and Lubricants (POL) traffic in the siding at Barauni of Indian Oil Corporation (IOC), the empty rakes, as per indents, are supplied by Carriage and Wagons Depot at Garahara.
Scrutiny by Audit of records of goods shed, IOC siding revealed that during 2000-01 to 2002-03, 20,524 tank wagons (281 rakes) were placed in the siding for loading. Of these, 811.5 tank wagons (in terms of 4 wheelers) were rejected by the siding authorities on the grounds that they contained black sludge, hard sludge, defective filling pipe etc. Further audit scrutiny revealed that facilities like steam cleaning and chemical cleaning to remove black sludge and hard sludge contained in tank wagons have not been provided at the Carriage and Wagons Depot, Garahara.
Failure of Railway Administration to arrange for cleaning of 811.5 tank wagons at Carriage and Wagons Depot, Garahara before despatch to the IOC siding led to their rejection by the siding authorities and consequential loss of freight to the tune of Rs.1.40 crore besides avoidable cost of Rs.0.28 crore on empty haulage of these unfit empty wagons.
The matter was brought to the notice of Railway Administration in May 2003 and Railway Board in October 2003 but their reply has not been received (February 2004).