Rlys unable to meet operation cost of passenger services: CAG

Rlys unable to meet operation cost of passenger services: CAG

Press Trust of India  |  New Delhi 

May 8, 2015

Railways has not been able to meet its operational cost of passenger services during the last five years, incurring a loss of nearly Rs 11,000 crore over this period, according to a report by the Comptroller and Auditor General of India.

The CAG in its latest report tabled in Parliament today said the state-run transporter incurred losses in all category of passenger classes barring the AC 3-Tier.

The loss incurred on operational cost of passenger services increased from Rs 15,268.41 crore in 2008-09 to Rs 26,025.46 cr in 2012-13, it said.

Railways was unable to meet its operational cost of passenger services, increased by 46.12 per cent during the last five years as of 31 March 2013, however, the expenditure under this head increased by 55.31 per cent during the same period, the report said.

The national auditor observed that during 2012-13, there was a loss of Rs 26,025.46 crore on passenger and other coaching services. The freight services earned a profit of Rs 33,221.24 crore which was utilised to compensate the loss of Rs 26,025.46 cr on operation of passenger services.

However, the Railways was able to retain 21.66 per cent of the profit on freight earning after subsidising the loss on passenger services in 2012-13 as compared to (-) 2.46 per cent in the previous year, showing an improvement in the operational profit.

It has found that all category of passenger services except AC 3-Tier incurred losses in 2012-13.

All classes including AC-1, AC-2, AC Chair Car, Sleeper, Second Class, Ordinary and EMU surburban services incurred losses during this period barring AC-3. The public transporter earned profit in AC-3 class only. It earned Rs 494.99 cr profit in 2012-13.

Railways also witnessed decline in operating ratio (percentage of working expenses to traffic earnings). It deteriorated to 93.60 per cent in 2013-14 from 90.19 per cent in 2012-13.

Net Surplus after meeting dividend liability decreased to Rs 3,740.40 crore in 2013-14 as compared to Rs 8,266.25 crore in 2012-13. It was less than the budget estimates by 71.55 per cent.

The fund balances had also declined from Rs 15,654.68 crore in 2008-09 to Rs 6,025.28 crore in 2013-14.

Indian Railways (IR) maintains Depreciation Reserve Fund (DRF) for replacement and renewal of existing assets. Contribution to DRF was not made on the basis of historical cost, expected useful life and residual life of the assets but was dependent on the amount which the working expenditure could bear.

CAG has found a huge backlog of over aged assets amounting to Rs 47,310.94 crore as on April 1, 2013, out of which railways had spent Rs 7,119.91 crore in 2013-14 on replacement/renewal. The remaining over aged assets in the railway system were required to be replaced for safe running of trains