Railways Lost Savings Of Rs 3,000 Crore On Account Of Delays: CAG

Railways Lost Savings Of Rs 3,000 Crore On Account Of Delays: CAG

Indian Railways lost savings to the tune of Rs 3,006 crore on account of delays in execution 21 projects out of 29 projects which were examined by the Comptroller and Auditor General of India (CAG). The office of CAG in its audit report on ‘Electrification Projects in Indian Railways’ released today stated that Railways has faced delays ranging between 30 and 32 months on an average on electrification projects which has led to increase in capital cost.

“Delays in completion of projects led to substantial time and cost overrun as seen by audit in the selected projects. Delays in completion also led to non-achievement of projected savings. There would also be financial cost in terms of interest on investment during the period of delay,” the report said.

The report also noted that the pace of electrification in terms of route kilometres (RKMs) improved from 1,165 RKMs electrified during 2011-12 to 1,730 RKMs electrified during 2015-16. A route km refers to the distance between two points on the railway network irrespective of the number of lines connecting them.

The audit noticed delays in every stage from planning to project execution in the 36 selected railway electrification projects reviewed. The national carrier runs 9,212 freight and 13,313 passenger trains over its vast network of 66, 687 RKMs daily. These tracks carry around two-thirds of total freight traffic and 50 per cent of the total passenger traffic.

As on 31 March 2016, 27,999 (42.40 per cent) out of total 66,687 RKMs while Rs. 687 crore to Rs. 1,668 crore was spent on railway electrification projects annually, according to CAG.

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“No prioritization was done by the Railway Board amongst projects approved by it, considering their intended financial and operational benefits,” CAG said. In terms of time and cost overruns it was seen in the audit that were also delays in finalisation of tenders and awarding contracts to contractors. There are also numerous extensions granted to the contractors on various accounts which led to delays in completion of the projects and an increase in the estimated cost of projects, the report noted.

In the audits review of 29 selected projects, it was found that out of 17 completed projects — one was completed within the targeted time — there was a time overrun of 8 months to 77 months in completing the projects.

On an average, the projects got delayed by around 35 months. CAG further noted that in 14 of these projects, there was a cost overrun of 2.02 per cent to 76.62 per cent.

In its recommendations, CAG has stated that the viability of electrification projects will depend on the anticipated saving by use of electric traction as compared to diesel traction and stated that electric traction remained more economical. The auditor also recommended Indian Railways to implement e-tendering and provide fixed timelines to designated agencies for preparations of Detailed Project Reports (DPRs).

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