Report of the Comptroller and Auditor General of India for the year ended March 2011 Laid in Lok Sabha/ Rajya Sabha on _______________ Union Government (Railways) No.32 of 2011-12 TABLE OF CONTENTS Paragraph Pages PREFACE v OVERVIEW vi-viii CHAPTER 1 –INTRODUCTION Particulars Compliance Audit - Report Outline 1.1 1 Audited Entity 1.2 1 Integrated Financial Advice and Control 1.3 3 Audit Planning 1.4 3 Reporting 1.5 6 Response of the Ministry/Department to Provisional 1.6 6 Paragraphs Audit objections issued, settled and outstanding 1.7 6 Recoveries at the instance of audit 1.8 6 Remedial actions 1.9 7 Paragraphs on which Action Taken Note 1.10 8 received/pending CHAPTER 2 – TRAFFIC – COMMERCIAL AND OPERATIONS Up-Gradation of Goods Sheds 2.1 12-27 Introduction 2.1.1 13 Audit Objective 2.1.2 14 Audit Methodology and Scope 2.1.3 14 Sample size 2.1.4 14 Audit Findings 2.1.5 14 Cases despite heavy detention were not taken up for up- 2.1.6 26 gradation Conclusion 2.1.7 26 MEMU/DEMU Services on Indian Railways 2.2 28-35 Introduction 2.2.1 28 Audit Objectives 2.2.2 29 Audit Methodology and Scope 2.2.3 29 Operations 2.2.4 30 i POH and Maintenance of MEMU/DEMU coaches 2.2.5 32 Occupancy 2.2.6 33 Conclusion 2.2.7 34 Running of freight trains with enhanced loading in 2.3 36-46 wagons up to CC+8+2 Introduction 2.3.1 36 Previous Audit Study 2.3.2 37 Audit Objectives 2.3.3 37 Audit Methodology and coverage 2.3.4 38 Audit findings 2.3.5 38 Conclusion 2.3.6 45 Movement of traffic at ‘Train Load Class Rates’ 2.4 47-52 Introduction 2.4.1 47 Operational aspects 2.4.2 47 Earlier Audit findings 2.4.3 48 Audit objectives 2.4.4 48 Methodology and sample size 2.4.5 49 Audit Findings 2.4.6 49 Conclusion 2.4.7 52 Undue benefit to consignors in booking of iron ore traffic 2.5 53 Loss of revenue on account of moving traffic by longer 2.6 55 route and charging by shortest route Loss due to empty haulage of un-utilized/ un-leased 2.7 58 parcel vans (SLRs) Loss in leasing Parcel Cargo Express Trains to private 2.8 58 operators Poor quality service in Linen Management 2.9 60 Non-recovery of wagon hire charges at revised rate 2.10 61 Loss due to heavy detention of wagons 2.11 63 CHAPTER 3 – ENGINEERING–OPEN LINE AND CONSTRUCTION Commercial Utilization of Surplus Railway Land in 3.1 66-75 Indian Railways Introduction 3.1.1 66 Organizational Structure 3.1.2 67 ii Audit Objectives 3.1.3 67 Audit scope and methodology 3.1.4 68 Audit findings 3.1.5 68 Conclusion 3.1.6 75 Civil Engineering Workshops in Indian Railways 3.2 76-94 Introduction 3.2.1 76 General profile of the workshops 3.2.2 77 Audit Objectives 3.2.3 79 Audit Coverage 3.2.4 80 Audit findings 3.2.5 80 Conclusion 3.2.6 94 Safety works – Level Crossings, Road Over Bridges 3.3 95-119 and Road Under Bridges Introduction 3.3.1 96 Audit objective and scope 3.3.2 96 Audit Criteria and Sampling 3.3.3 97 Audit Methodology 3.3.4 97 Audit findings 3.3.5 97 Conclusion 3.3.6 118 Delay in building the new rail bridge over River Sone 3.4 120 Injudicious retention of an old bridge by strengthening 3.5 121 sub-structures CHAPTER 4 – MECHANICAL – ZONAL HQRS/WORKSHOPS/ PRODUCTION UNITS Plant and Machinery Procured by COFMOW 4.1 125-137 Introduction 4.1.1 125 Organizational Structure 4.1.2 126 Audit objective 4.1.3 126 Audit Scope and Selection Methodology 4.1.4 127 Audit findings 4.1.5 128 Conclusions 4.1.6 137 Loss in procurement of steel materials 4.2 138 Avoidable extra expenditure due to acceptance of higher 4.3 141 price of steel than prescribed by SAIL iii Loss due to non utilisation of rolling stock 4.4 142 Improper splitting of tendered quantity 4.5 143 CHAPTER 5 – SIGNAL AND TELECOMMUNICATION Safety Works on Indian Railways – Anti Collision Device (ACD) and Train Protection and Warning System (TPWS) Introduction 5.1 146 Background for Audit 5.2 148 Audit objectives 5.3 149 Audit methodology 5.4 149 Installation of Anti Collision Device 5.5 149 Audit findings 5.6 150 Provision of Train Protection and Warning System 5.7 156 CHAPTER 6 –STORES Loss due to non-loading of profit element in the price of 6.1 162 wheelsets sold to M/s CONCOR Loss due to excess procurement of sleepers 6.2 163 Loss due to delay in finalization of tender 6.3 164 Annexure Report on “Up-Gradation of Goods Sheds” I – IV 167-175 MEMU/DEMU Services on Indian Railways V – VIII 176-180 Running of freight trains with enhanced loading in IX – XV 181-190 wagons up to CC+8+2 Movement of traffic at ‘Train Load Class Rates’ XVI – XXI 191-198 Undue benefit to consignors in booking of iron ore traffic XXII-XXV 199-200 Study on ‘Commercial Utilization of Surplus Railway XXVI-XXX 201-205 Land’ in Indian Railways Civil Engineering Workshops on Indian Railways XXXI-XL 206-212 Report on “Safety works – Level Crossings, Road Over XLI-L 213-243 Bridges and Road Under Bridges” Review on "Plant and Machinery Procured by LI-LII 244-250 COFMOW" iv PREFACE The Report for the year ended 31 March 2011 has been prepared in three volumes viz. Compliance Audit Report, Performance Audit Report and a Report on ‘Railways Finances’ for submission to the President under Article 151 (1) of the Constitution of India. This volume ‘Compliance Audit Report’ contains 16 audit observations arising out of test audit of financial transactions conducted during the year 2010-11 and nine thematic studies. The audit of Ministry of Railways and its subordinate offices was conducted under Article 149 and 151 of the Constitution of India read with Section 13 of the C&AG ‘s (Duties, Powers and Condition of Service) Act, 1971 and in accordance with C&AG’s Regulations on Audit and Accounts. ----------------------------------------------x----------------------------------------------- v PREFACE The Report for the year ended 31 March 2011 has been prepared in three volumes viz. Compliance Audit Report, Performance Audit Report and a Report on ‘Railways Finances’ for submission to the President under Article 151 (1) of the Constitution of India. This volume ‘Compliance Audit Report’ contains 16 audit observations arising out of test audit of financial transactions conducted during the year 2010-11 and nine thematic studies. The audit of Ministry of Railways and its subordinate offices was conducted under Article 149 and 151 of the Constitution of India read with Section 13 of the C&AG ‘s (Duties, Powers and Condition of Service) Act, 1971 and in accordance with C&AG’s Regulations on Audit and Accounts. ----------------------------------------------x----------------------------------------------- v Overview Overview This Report contains the audit findings of significant nature during the compliance audit of Ministry of Railways (Railway Board) of the Union Government and its field offices for the year ended 31 March 2011. The report contains six chapters. Chapter 1 presents a broad outline of the scheme of the Report and Chapters 2 to 7 present detailed findings/observations under relevant department title. Chapter 1 – Introduction - This chapter contains 10 paragraphs containing audited entities' profile (Para 1.2), audit planning (Para 1.4), response of the Ministry/Department to the provisional paragraphs (Para 1.6), the number of objections issued as a result of audit of Railway accounts and records, objections settled after Railways had taken corrective action and those outstanding for want of action by Railways (Para 1.7), recoveries effected or agreed to be effected at the instance of audit (Para 1.8), remedial actions taken by Ministry of Railways (Railway Board) on audit observations contained in previous reports. (Para 1.10) Chapter 2 – Traffic – Commercial and Operations - This chapter includes four thematic studies conducted across Zonal Railways covering freight and passenger services, freight policy of enhanced loading and concessional tariffs. The audit findings, in brief, are described below: ¾ Up-Gradation of Goods sheds - The study revealed that increase in rake turnover was hampered due to deficient planning and delays in implementation. There were immediate positive gains in terms of reduced detention in the limited number of cases where the Goods sheds were upgraded, though in some others, these resulted in a decline. (Para 2.1) ¾ MEMU/DEMU Services in Indian Railways - The study revealed that besides improper planning of train services and inadequacies of maintenance facilities, there were delays in commissioning of new coaches meant for replacement of conventional trains. (Para 2.2) ¾ Running of freight trains with enhanced loading in wagons up to CC+8+2 - The study revealed that the progress made by Railways in providing requisite equipment for safe running of trains was far from satisfactory. It also revealed that though the IR had achieved the objective of increasing their earnings but simultaneously the expenditure on account of frequent wear and tear to rails and extensive damages to wagons parts such as CBC, draft gears, wheels and Axles assemblies, brake gears, etc. had also increased. (Para 2.3) ¾ Movement of traffic at Train Load Class Rates - The study revealed stations/sidings were notified as capable of handling full rake traffic regardless of the actual facilities available.