Railways lost Rs.1 Lakh Crore as Cost Overrun: CAG

New Delhi: Indian Railways has lost more than Rs 1 lakh crore as cost overrun on account of delay in execution of about 400 of its projects, stated the Comptroller and Auditor General (CAG) of India in its report, which was tabled today in both Houses of Parliament.In its report, the CAG said, “Target dates for completion of projects were either not fixed or not available on records of the Railway administration. The physical progress was also slow where target for completion of the project was fixed.”It further went on to say: “Projects were delayed due to delay in preparation/sanction of estimate and delay in acquisition of land. Delay in completion of projects resulted in cost overrun of Rs 1.07 lakh crore and huge throw-forward of Rs 1.86 lakh crore in respect of 442 ongoing projects.”Lamenting on the Railways’ lack of consistency in prioritisation of projects, it said, “There are several instances of under-utilisation of funds which had adverse impact on the physical progress of projects.”Noting that during 2009-14, 202 projects were added to the existing shelf of ongoing projects ignoring the existing fund constraint and, as a result, only 67 projects were completed during the same period.The national auditor observed that 75 projects have been ongoing for more than 15 years and of those, three projects are 30 years old. Despite budgetary support from the Finance Ministry, the progress of national projects was far from satisfactory, resulting in substantial time and cost overrun.

Railway project kept ‘alive’ for 10 years with Rs 1000 allocation each year, says CAG report

It may be hard to believe but a railway project sanctioned in 1974-75 is still incomplete and it was kept alive with an allocation of a meagre Rs 1000 every year for around ten years. The federal auditor has found that the project for construction of new line from Howrah to Amta with a branch line from Bargachia to Champadanga under South Eastern Railways was sanctioned in 1974-75.

According to an MOU signed in 1973, the land was to be provided free of cost by the West Bengal government. While the first 24-km stretch of Howrah to Bargachia was completed in 1984, the construction work beyond Bargachia was frozen for more than a decade. However, the project was shown as ongoing in the Pink Book with a token allocation of Rs 1000 each year up to 1995-96 (except Rs one crore in 1993-94), according to a CAG report. The project restarted in 1995 after allocation of funds. Though the section from Bargachhia to Amta was commissioned in two phases in 2000 and 2004, the progress of works for the branch line from Bargachhia to Champadanga suffered due to non-acquisition of land. In September 2014, it was proposed to shelve the project (Bargachhia-Champadanga section). However, it was considered as ongoing with anticipated throw-forward of Rs 356.03 crore.

The CAG report said such delays in the execution of more than 400 projects by the railways resulted in cost overruns of Rs 1.07 lakh crore and highlighted land acquisition as one of the main factors responsible for delays. It was found that 75 projects have been going on for more than 15 years and of them, three projects are 30 years’ old.

Interestingly, the auditor found that target dates for completion of projects were either not fixed or not available on records of the rail administration. It noted that projects were delayed due to delay in preparation or sanction of estimates and delay in acquisition of land. Surprisingly, the CAG found that 82 projects, which were shown as ‘completed projects’ still required Rs 10,832 crore for completion of pending work.

The CAG report, tabled in Parliament on Friday, noted a huge throw-forward of Rs 1.86 lakh crore in respect of 442 ongoing projects. The report noted lack of consistency in prioritisation of projects and also allocation of funds was not proportionate to the requirement while there were several instances of under-utilisation of funds which had adverse impact on the physical progress of projects. Noting that during 2009-14, 202 projects were added to the existing shelf of ongoing projects ignoring existing fund constraints. As a result, only 67 projects were completed during this period.

Despite budgetary support from the finance ministry, progress of national projects was far from satisfactory resulting in substantial time and cost overruns. It has found that the rate of return was less than the prescribed benchmark of 14% in 236 (53%) ongoing projects.

Government Auditor Pulls Up Railways Over Lack Of Land Management Cells

The Comptroller and Auditor General has expressed dismay over absence of land management cells (LMCs) in many railway zones and divisions despite the need for such a body to maintain accurate land records for prevention of encroachments. Besides, CAG, in its report, has observed that in railway divisions where LMCs have been set up, staff members posted there were neither trained to deal with land issues nor deployed exclusively for the job, which adversely impacted maintenance of important land data. The national auditor noted that the process for removal of encroachments was very slow and the monitoring and joint inspections for encroachment management were not up to the prescribed level.

Railways owned 4.59 lakh hectares of land up to March 2014, out of which, 0.46 lakh hectares were vacant and 930.75 hectares under encroachment. The Public Accounts Committee (PAC) had emphasised the need for setting up of LMCs to maintain accurate land records, plan removal and prevention of encroachments. CAG examined the issue of prevention and removal of encroachments on railway land with a view to assess whether the guidelines/instructions of Railway Board were adhered to and PAC’s recommendations implemented.

The national auditor observed that LMCs had not been set up in headquarters of three Zonal Railways (Southern, South East Central and South West) and in 37 Divisions of three zones. “The LMCs did not properly monitor the position of vacant land. Land plans were either missing or had not been authenticated by state authorities. Twenty per cent of the land plans had not been digitised,” CAG observed in its report. It noted that the records connected with land mutation were available in eight zones and only 48 per cent of these land plans were mutated. To its utter dismay, CAG has found that “land record registers were not being maintained in 37 out of 68 divisions and details of encroachments were also not being maintained”.

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