Railways to revamp accounting systems

The railway ministry has floated a global tender to hire consultants for revamping the accounting system of the organisation.

The move is part of the Railway Sector Improvement Project, to be funded partly by the Asian Development Bank.

The consultants for the 'Accounting Reforms Project' will have to submit their bids by April 6.

The expression of interest (EoI) envisages that globally reputed firms, which have expertise in design and implementation of business-based accounting system in the railway sector, should apply. Railway officials said the consultant would have to satisfy the ADB's guidelines.

The expression of interest says the firm or consortium of firms will be expected to provide "high impact consulting services to develop an improved accounting system for Indian Railways".

Only those bidders, who are based in ADB member countries, will be entertained, the EoI says. Other than Asian countries, the US and Australia are also members of the ADB.

The ADB guidelines say a list of five to seven firms will be finalised. Only one applicant from an ADB member country will be allowed to bid.

Although reforms in the accounting system of the railways had been suggested earlier, the railways had so far resisted such a move. The Rakesh Mohan committee on the corporatisation of the railways, had suggested that reforms in this area were essential to make the accounts transparent.

The committee had said at present there was no way to judge the rate of return in railway projects accurately.

As a result, the committee had argued that it was difficult to calculate returns from investments made on railway projects like laying of tracks and new freight and passenger services.

This in turn affected any long term projection on the viability of the railways. The railways accounting system is quite different from the accounting format of the central government.

The committee had said instead of following the hybrid accounting system, which the railways had been following for years, it should adopt the normal accounting system followed by a commercial enterprise.