90% rail projects financially unviable, panel wants review

Observing that only 12 out of the ongoing 109 projects to lay new railway lines were financially viable, with many of them running into huge cost and time overruns, a key parliamentary committee has recommended that the projects taken up on socio-economic considerations be reviewed so that a fair assessment of continuing or shelving such projects can be made.

Many new rail line projects are taken up by the Indian Railways on the demand of political leaders based upon socio-economic considerations to provide rail connectivity to remote and backward areas. Although financially unviable, these projects are considered in view of the tangible benefits to society.

In its recent report, the Public Accounts Committee has pointed out that projects sanctioned more than 20 years ago were still lying incomplete despite the Railways having spent Rs 8,549 crore. As many as 97 projects, accounting for close to 90 per cent of the total projects under this category, are unviable.

Resource crunch, delay in acquisition of land and environmental clearances have been cited by the Ministry of Railways as the major reasons for non-completion of projects. Further, there has been delay in preparation of detailed estimates, lack of coordination with state governments, law and order problems, militancy and contractual failures.

The committee’s report also revealed that an audit of 50 projects found that no target date was set in 36 projects, while acquisition of land remained incomplete in 34 projects due to which construction could not begin.

The committee also pointed out that unless the state governments agree to share the project cost and provide land free of cost, the Railways may revisit the proposed construction of such projects and also evolve a sound national policy in this regard. Audit scrutiny of 1,399 contracts awarded in 38 projects revealed that only 109 contracts were completed within the stipulated period. In 891 contracts, the delay in execution was up to seven years. As a result of long delays and slow progress, 60 contracts were foreclosed without any liability on either side. Another 114 contracts were terminated at the risk and cost of the defaulting contractors, but the cost of Rs 116 crore was not recovered from the defaulters due to failure in timely issue of notices or to pursue the matter.

Derailed projects

In its recent report, the Public Accounts Committee has pointed out that projects sanctioned more than 20 years ago were still lying incomplete despite the Railways having spent Rs 8,549 crore

As many as 97 projects, accounting for close to 90 per cent of the total projects under this category, are unviable

Audit scrutiny of 1,399 contracts awarded in 38 projects revealed that only 109 contracts were completed within the stipulated period.

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