CAG Flags Rs 543 Crore Losses In Indian Railways Over Poor Recoveries, Delays And Inefficiencies

A report by the Comptroller and Auditor General (CAG) of India has found financial irregularities and inefficiencies totalling more than Rs 543 crore by various zones and field units of the Indian Railways., the Indian Express reported.

In its compliance audit report on Railways for the year ending March 2023, tabled in the Lok Sabha on Monday (21 July), the CAG found a consistent pattern of short recoveries, avoidable expenditures, mismanagement and loss of potential revenue in a total of 25 cases, which happened due to the violation of rules, regulations or directives by specific entities of railways.

One of the most glaring issues was Northern Railway’s failure to recover Rs 148.61 crore in land licence fees from five government-aided schools, even though the rules clearly mandated charging 6 per cent of the land’s market value.

Nine railway zones,  including South Eastern, East Coast, and Central Railway, did not collect Rs 55.51 crore in District Mineral Foundation (DMF) contributions from contractors over nearly a decade, according to the CAG report.

This fund is intended to support people and areas affected by mining activity.

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East Central Railway missed out on Rs 50.77 crore in non-realisation of shunting charges at Bina siding (BCSK), for unbilled shunting activities using railway engines.

The CAG also pulled up Southern Railway and the Integral Coach Factory for spending Rs 27.91 crore to manufacture 28 Nilgiri Mountain Railway coaches without adequate technical assessment or consultation with the Research, Design and Standards Organisation (RDSO).

“ICF did not comply with the instructions of MoR (Ministry of Railways)… which led to creation of ineffective and deficient assets,” the report said.

Other costly lapses included:

• Rs 23.16 crore in late fees by South Central Railway for delays in licence renewals for Very High Frequency (VHF) sets.

• Rs 15.62 crore in excess spending on underbridges by Central Railway.

• Rs 12.62 crore in losses due to delayed axle-load upgrades by Western Railway.

• Rs 12.76 crore not collected from CONCOR due to non-execution of formal agreements.

• South Western Railways construction of a road over bridge without ensuring approach road work by the state government resulted in Rs 11.81 crore in blocked capital for more than five years (2018 to 2023) and non-elimination of level crossing.

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