Southern Railway suffered huge losses due to wrong incentives: CAG report

CAG report points to wrong concession, irregular allowance and non-assessment of railway property  

Southern Railway has suffered a loss of ₹20.58 crore by way of granting ineligible concession to a firm for transporting vehicles to destinations in the northeast; wrong payment of overtime allowance to staff; and non-reassessment of its land, housing the office of a Superintendent of Police (SP).

The recently published report of the Comptroller and Auditor General (CAG) of India for the fiscal ending in March 2022 states that Southern Railway had granted a concession of 6% to the operator for transporting automobiles to northeastern States in the specially designed Bogie Covered Autorake Double Decker Wagon (BCACBM) rakes. This ineligible concession resulted in a loss of ₹9.25 crore.

The Ministry of Railways had accorded concession on freight for commodities and motor vehicles transported in the Newly Modified Goods (NMG) rakes to the northeastern States. However, the incentive was not meant to be extended for transportation of motor vehicles in the BCACBM rakes.

When asked about the action taken to recover the ₹9.25 crore, a top Southern Railway official said booking of freight and availing of discounts were online mechanisms where there was no manual intervention. All freight bookings were done through the Freight Operations Information System.

Zonal Railways had no role in either facilitating freight bookings or providing concessions. “The question of initiating any recovery proceeding [to compensate for the loss] does not arise at the zonal level. It is for the Railway Board to take corrective measures,” the official told The Hindu.

Overtime allowance

The CAG report said irregular overtime allowance to the tune of ₹6.67 crore was paid to the staff of incentive shops at Signal and Telecommunication Workshop, Podanur, Southern Railway, from the period 2017-18 to 2021-22. Going by the rules, those working in incentive sections of workshops in the Railways were ineligible for the allowance. The Ministry was told to ensure compliance with the provisions, and issue recovery notice.

Southern Railway also incurred a loss of ₹4.66 crore due to the non-assessment of rent for a railway property measuring 3.70 acres allotted to the SP of Tirunelveli, the report said. The non-assessment, as per the revised procedure in 2018, had resulted in a rent of ₹75,480 per year instead of ₹1.17 crore per year, causing a loss of ₹4.66 crore (excluding the rent of buildings) during the period from July 2018 to June 2022.

It was recommended that the losses may be recovered at the earliest and necessary steps be taken to revise the rent agreement.

‘Train-18’ rakes

Referring to the stoppage of production of ‘Train-18’ rakes, the Ministry’s decision to change the traction system after approving the production programme for 240 coaches over two years resulted in idling of six unusable coach shells for ‘Train-18’ manufacture, against the earlier specification, at a cost of ₹8.57 crore. It also led to idling of materials worth ₹46 crore at the Integral Coach Factory (ICF), Chennai.

‘Train-18’ was designed and developed by Team-ICF in 18 months and unveiled in October 2018. The rake was named as Vande Bharat Express.

The production programme was halted and top officials involved in the making of the train were shifted out on various vigilance cases, which were later dropped by the Central Vigilance Commission.

The design was referred back to the Research Designs and Standards Organisation (RDSO), the railways research arm, for certain modifications.

The CAG report said the Railways needed “to ensure complete freezing of specifications before approving the production programme”.

Published - September 30, 2024 12:46 am IST