Railways incurred loss of over Rs 400-cr on freight: CAG

Railways incurred a loss of more than Rs 400 crore due to carrying of freight traffic by the longer route and charging by shorter routes, according to the Comptroller and Auditor General of India.

A latest CAG report reveals that railways was regularly carrying freight traffic on longer routes and charging by the shorter route, resulting in a revenue loss for the cash- strapped national transporter.

A loss of Rs 422.74 crore was incurred over the period 2010-11 and 2011-12 due to charging by shorter route covering an extra distance of up to 952-km, the report stated.

"This works out to an annual loss of Rs 211.37 crore," it said.

In a number of cases, it was found that zonal railways were compelled to carry freight traffic on the longer route as there are technical constraints such as detention of locomotives, problems of engine reversal on other shorter route.

Despite incurring additional operational costs, CAG noted that no action was taken to rationalise the routes for enabling the zonal railways to charge freight by the actually carried routes.

The CAG has suggested that this problem can be solved by construction of a direct approach line near the station. Though railways is undertaking electrification of its major trunk routes, this, however, leaves parts of various freight routes as non-electrified sections requiring a change of locomotive.

According to CAG, 38 such shorter routes are non- electrified sections, requiring change from electric to diesel.

CAG has examined records of zonal railways, divisional offices and stations from where the traffic was moved on the longer route.

It also examined the movement of freight traffic across the zonal railways between 2010-12 and noticed that despite the traffic being carried regularly by the longer routes, zonal railways had neither forwarded proposals to the Railway Board for bringing such streams of traffic under the purview of rationalisation orders nor initiated improvement works to remove the hurdles that caused the diversion of traffic by the longer routes.

There were a total of 187 routes where the distance between the charged (shorter route) and the actual carried (longer) route was more than 100-km.

The maximum number of routes where freight traffic was carried by the longer route was 48 under Southern Railway followed by South East Central Railway with 40 such routes.

While railway administration is required to initiate proposals to overcome the difficulties in carrying of traffic, the CAG has, however, found that out of 187 routes, there were no proposals in 141 routes to overcome the bottleneck on the shorter routes.

Freight in these routes was carried as a regular measure for reasons such as over-saturation of shorter routes, non- availability of direct approach line, non-electrification of shorter route, problems of engine reversal.

In some of the cases, the longer route has been in existence for about 10 years or more.