Sixtieth Report 1968

P.A.C. NO. 216

(FOURTH LOK SABHA)

SIXTIETH REPORT

AppROpRS 41 'ON ACCOUNTS *AILWAYS), AND AUDIT REPORT (RA:LWAYS) 1968

LOX SABXSA SECRETARIAT N Ern .DELfiI. LIST OF AUTHORISED AGENTS FOR THE SALE OF LOK SABRA SECRETARIAT PUBLICATIONS

S1. Nunc:of A@nt Nnme'of A&cnt No. %? Et. No. - . I ANDHRA' PRADESH xn. Ch~rlca~Lem~& Com- 30 pany, ror, Mahatma I. ;~ndhri ~nivcrshy Geneivl 8 Gandhi Road, Opposite r Coopcratlve Stora Ltd., Clock Tom, Fort, W.ttoir(vi~ptnam). Bombay. 3. G.R.Lnkshmipathy 'Cherty The Current Book House, 60 and Sons, Gend My- Mwti Lane, Raghunath chants md News Agents, DPdaji Sttett, Bombay-:. Newpet, Qmndragiri, Chinoor District. Deem Book Stall, FCE 65 won Coliego Road, P00nr-4. 3. Wutgn Bod; .Depot, PM Mls. Ushr Book Depot. S Bpypy, Gauhau. 8jlA Chim Razar,l(knn KouS c. Girgnurn Road, Bombay-z BR.

Mla. Peoples Book House, 16 Opp. Jaganmohan Palace, Mysoex. 5, Vijrg Stores, Station Road, AnmJ, 17. Information Ccnrre, 6. New Ordq Boot 63 Govemmcnf of hbsthm, Canpmy, EUtr BoJge, Tripolia, Jaipur City. Ahmedsbd-6.

at. Nm& C~~WY 44 d.,3, Old fhtrt kbuse 21 ' htr~~t.G~N-

26 . % rj. Wr. MadBooL HOW 1 BB, W Lwr, (5) (f) lt~ignalin,:u It signallingtt . I3 "appointment " "apportionment" 26 compliedlr 6 "a h4adI1

"ma terali seit "ou tlayln;It tldirnentionsfl l1 speciafi cally" Commi s sionI1 "utili sation" llhoulagefl 'teirernessu 5 .t Feletn "all 2 "bogiet'" 27 It drown" 28 surplul" UsurplusN 1 (Thixi Lok Sabha,"I1Third Lok " % jabha) ;lt 3 Six" I* 2 11 1969" " 1959" sub para 2 3.31 7 I% 1,04 lakhsU I% 1.04 lakhsVt 3.53 35 19 at." tlastl ' ' "regradedu 4.3 2 !!regradingn 4.8 16 ''regrading" 4.8 lest "Appendix I 1. (not attache& 4.8 20 "f0r9cast~~ "fo;ecast' of_" 4.3< 5 sepgr3tet* "separat~~~- 4.36 6, "uotwarcl" . '~OUtwarcltt 4.43 9 It station" "stationstt 4.52 4 "Sen~ral~' llCsnt raltl 4.57' 13 Itlater" Itlatter" llOf I1 4.58 2 It the 4.58 5 fttunsll " t onnest' 4.60 10. It trainsit. 4.61 35 t9totalledt1 &&3&?3U&i -For -He a c3 129 4.61 7-8 replecernsnt" rspiecehentfi l29 .4.62, 20 . .lhlateltinll . 131 4.59 ' 6 I1t ropenztl t ropenazt* . 134 4*80(b) 5 "the" ltbzn 135 . 4.82 2 11 11 at" -l39..4.85 7 "wsriantly" Nwarrantp' * 145 5.4 2 wer1 . I've are" 156 ' 5 033 6 It hop A" llhoprju 7.1 , U . "fitin,srl ftfittin,,sll 7.40 23 ~I~~II ~tin" 7.44 4.- rece1ptf1 ltreoslpt sfl 7.57 4 II hintII II Mmtt Col. 3 4 conc~rn~~ conc armedH C01.4 8 'I spct 'I "SDO~S" Col. 4/ 1 t?exercisa" It s.xerci sedtl rj .No .6 Col. 4 7 ' 11 ,slI fl Cbl. 4 10 llaxceptfl tlexc$ptll Col. 4 19 'I dimentionnl" 'ldimensionclw Read the matter in colurr9.8. 1 - 3 againstdine 3 - instead of a:%inst line 1. Col. 4 1 "startd" "started" Col. 4/ 9 "str?tionfl nstations'l 3.1i0. 37' ' Col. 4/ 6 llduoblin;lt "do~blin;~~ S.No. 38 Col. 4/ 13 llsriatiooit "variationu S.MO. 45 1 4 18 the" " ara'l Cole 4/ 53 'Ipossiblz. So" I1possible son S.No. 54

* "I 23 1,48/ 5-6 I1ixpenses bn Fuel1' Col 1 "Total Sxpensasf1 CONTENTS

w COMIOSJ~I~ tm Pvswc Acwm COMMITT~I! rn . -. ~&nu'-rro~ . Cx,uvn I. Finmckl Remits of the Working of ihe * Railways . .. . UAPTEK 11. PunfUSCs and Stores . CHAPTER111. Works Expditurr . C;Hlurt!a IV. Ut ,lhtian of Ascts . .. . CIUP~V. Operation . . .. CHAPTERVI. I?xpenditUrc LUI St.A . C~TBVI I. Othcr Tapid of Interest

APPENDIX

Summary of Main Gnc'uc'm*~rccommcndationn of the Committee . PART II* Minuter af the $itrings of the Public Accaunts Commincc held an :- H-10-1968(AN!. 9-10-1968 :FN and AN'. jo-lo-tp68 (FN. !AN)- 3-4-1969 %

A I V.M nkxs b 2. Shri Syetl ,\h~netl .4ga .3. Shl i K. ,\nirt~~ll~t~l 4. Shri S. >I. Bar~erjec .5. Shri C. k. Ilhattachar>\:c 1;. Shri K, G. l)esi~tni~kh 7. Shri 1'. K~-irllnamtr~~t11i 8. Shri 13. );. liuntu !I. Shri S. R. Labk;cl lo. Shri li. li. Nay11 11. Shrimati Sushikt Rohatgi 12. Shri Narmtlra Kumar SaIw 13. Shri Ram Awtnr Sharma 14. Shrimati '1';trkc.shwari Sinhr 15. Shri Tayappa Hari Sonavanc. 16. Shri A. P. Ghatterjtr 17. Shri K. Damodarari 18. Shri Shanti Kothari \!I. Shri S. S. ,Mariswarn\ '20. Shri G.H.V. Momin 21. Shri N. K. XI. Swam?. 22. Shri 'T'arkcshwar Pnndrt

Shri Avtar Singh Rihhv.-loi,tt Sectrtsn. Shri K. Smhariri---l'ndo. Scrtrirn . . ..)

INTRODUCTION - 0 . 1, the Chairmarl ol the Public Accounts Committee, as authorised by the (bmmittee, do present on tl~eirbehalf this Sixtieth Report (Fourth 1-ok Sabha) on Appropriation Accounts (Railways), 1966-67 and Audit Keport (Railways) , 1968.

2. 'I'lle .4ppropriation Accounts (Railways) . IS67 together with the .Audit Report (Railways). 1%R, was laid on the Table of the HOUK on the 13th March. 1968. 'J%e Committee examined them at their sittings held on the 8th (AN). 9th (FN R AN) and 10th (FN) October, 1W. The Committee considered and finaliwd this Repn at their sit- tin^ held on the 3rd April. 1969 (AN). Minutes of thew sittings of the Committee form Par II* of the Report.

3. A statement sl~owingthe summary of the main concl~uionslrtcom- ~~~ct)dationrof the Committee is appended to the Report. Far facility of rtferencc thex have been printed in thick typc in :he body of the Report.

4. 'The Committee placc on record their ;ipprc&rion of the usi, tmce rendered to them in the examination of these accounts b) the ( h~ptroller and Auditor Ceneral of India.

5 The Cmmittet would alw like to taxpre$ their thanks to the (:hairman and Members of the Railway Bod and qmcntatim of the Department of Supply and Deparrrnenc of Iron and Steel for the co-operation extended by them in giving information to the Committee.

M. R. MMANI, Chairman. Public ,4c~ountsCommittee.

. 1 FINANCIAL RES~LTSOF THE WORKING OF THE RAILWAYS AUDIT PAlfACRAPH For the first time since lW7-48. the working of the Railways &ow- cd a %et defich in thc year 1966-67. Against a wrplus- of Rs. 94.19 rr- ant6ipaud it1 the Budget, the accounts clod with a net deficit of Rq. 18.47 nora. The deficit was made good by withdrawal of an equivalent amoant from the Revenue Reserve Fund. The balancc in the Revenue Rwwe Fund at the end of the year stood at Rs. 44.70 mores, while the balance in the Dcwlopent Fund was Rf. 3.57 crows. 1.2. The net ddicit was due to a .shortfa!l of Rq. 46.54 crorei in the estimated gross receipts and increase nf Rs. 15.03 rmrcs in thc anti- ,' ripa ted revenue expcnditurc.

Particulars Budget Actuals Variations

I. Gross Reccipts - 795 ' S4 769.00 (-126.54 Deduct.

2. (a) Kcvenuc Expcndi twc . 639.85 654.88 (-+I 15.03

3. Net Surplus D&icit (+>2as1u, (->18.27 (-140.46 . [Paragraph No. I Audit Report (Railways) ~9681.

1.3. Pointing out that the Railways had run into a deficit, the Con1 mittee enquired whether the heavy over-capitalisation in the Railways that occurred during the third five-year plan which resultecl in heavy dividend liability to General Revenues was not responsible for the deficit. I'he Financial Commissioner (Railways) stated that the ~wincipalreason was that the traffic had not .incr&sgd according to antic ipations. The working expenses had also gone up because of repeated doscs of degrnm dlowance, increase in the cost of fuel, coal and dim1 oil. He admitted that they had not been able to get in recent years the return on the capital investment that they had been making and. thcv had actuaII* reached a wsition whm the deficit might increase. ------.------N.B. TL r&es given under Byd! not t.ly nto ecmunl the figurb\ .)IHcv - cad Estikaafes rnd suppkcntaxy proms ns. L Forecast Mmmes Actuds hiother adopted Minirntes for goods earnings.

- *. - -.- 6 ------"1Vl1;tt upset this n(&tte .wan mainly the drought in 1W7;this 'afkctml not only the r([riccllhurf output but ahindustry: both .rl~" bawd and hvdel.powcnd. Heavv .cqjhcsring anti gt-1 tra:allk ab Jrqpd. 'f%c ineast 111 rtre industrial output fell to plus 2.6 per cent fmm plttr 5.6 per cent in tht pdaur yeat." * "W&.Hortals mtl civil cikuurburccs rim hindcrcct rail movc- 11uM." ' * ,,"Whco Qambq the bvbt khbnala fw lW7in Jutuur) '(ii, the yaitbr was Lhzt an incnart d 3.8 mill& mnam burl almady accrued tluriq the fin( ninc months of the war and Februaq ond March. which art usually bus) months, werr expected to contribute one dl- lion tomes 'more, makit% il total increase during the year of abut 5 millicni tonna. Rut Febrt~ary and March aauaH) witncmxl Y fall ot 1.4 million tonne rompatel to the previous year. so that the totai irlrrezlr ei~~ringthe year wan anlv 2.2 mill/on tonnn."

13. '?'he C'mmittee ~mit~teclout that at the time of pmentatiot~ ot the Budget in 196647, it was stated in the Explunator). Memorandum ;o 10llows:-

"'l'bc pwttr of peuger trPALC has had a check during 1Y63-66, to an even perewtcnt than expected. Due note hu to tr taken of the IiLrlihd d ehia mQnq for a pouics in trntbr lo barden with .he drop in agricukural output md incomcs." The Commictec asked whether th3b frcmr ot dswght ww Mt in view while framing the Budget Estirruten tor goods earnings and it go, 011 what bmis in inmaw in guods earnings from Rs. 441.90 )0;-roresin 1965-66 to Rs. 506.63 crores in IM-67 was anticipated. In a note on thie point the Minirtrv 01 Railway have rtated.

"Bidet Lptirrtiltm to1 the ensuing year are fra~ired on the bask of the Reviscc! Estimates of the current year and the \fitly trend in the next year. During 1965-66 it wa5 observed that there wan v notireable check in the growth of pinger traffic. The Revised Estimate of passenger qarn. Ings during 1965-66 wab thereforc placed at Rs. one more less than the Budget htimate for that yeat. Note was taken of this tred in passenger traffic also in the Budget a- timate for 1%-67: In the ca.u of goods traffic the trend was somewhat different. In tire fir%t ninc months of 1965. M, actual traffic in some ot the relatively higher rated items yas an improvement on the proportionate targets for the period. Bwii on this temd chr &vW &iatate of gpxb earnings for 1WM was placed pt &. ,464 VprH; Rs. 20.10 crora higher t11.in the Budget milpates of Rs. 461.90 ' crgra. The hticipltion wu fully reakd or the rctual realisation was Ks. 465.49 cmm, or about & Y. ctrnr hi*.' It was ixP"t~ t&t his tpd in the pmis CEBSC would continue in 196647, md th; Budgtt ,&-I+ tor tlut. yqar wu plwcl at a. 506.53 crores-an increase of Btr. 44.53 r.roreb over the Kevilcrci btimau for 1965-66. rhir anas- ment yrcdrcted an irrcreaw of about 11 million tdnno in the qriginrting traffic ovm 1W5-66,and ah.indudedl the ;tdhan'al earnings on acrount of the changes in thk freight rater." 1.6. The Committee pointed out that the operating ratio of the Kailwavb hat1 inrreabed from 79.5 in 1965-66 to 83.2 in 1966-67. In a imtc u, the Committrc, the Ministry cxplained that if the efkct of i~ttreirscs irr tariff o11 tl~com hand and increase in prices, deamas id- I~)\r.~uceto tf~cst;tlt ,II~increase 811 the contribution to the Deprcria- ticm Kchcrve Fund an thother arc exclud~ti,the operation ratio of 1l1r ycar l!HiC~fi7 (82 71). comp.~rctlfavournt)I) with thc operating of tlw vear Iw5-66 (78.30).

1.7. 'The Committee were informed. of the following position dur- i r~gcvidcnce hy the Financial C;ommissionct (Railwavs) : "Whai has happenetl is that on the on(. hand traffic has not inrrcawd arrording to anticipations and, .thmefor~,we have failed to earn what we expected we should be earning and on I~Pother hand costs haw increased mow than in proportion to the* price rise and wan riw. Therefore. this npcrRtinp; ratio hau hrun affwtctl adversclv." 1.8. The following tablr indicates the increase in uuit cost of operation in the R;tilwavs in 1966-67 as compared to 1%11-64: ------Broad Mctn Coaching Services Gauge Gaugc

(percatape increase in at) Cost pcr vchiclc km. (per 4 wheeler) (n) Bxcluding interest 20.51 27-09 (b) Including interest . 24-22 23-74 Cost per gross tmc km. .. (a) Bxcluding interest to-35 22.38 (h) Including interest 23 '44 21.11

(a) Bxcludiig interest . . 18-62 ' 21.42 (b) fncluding Interest . . 2r9r2 ao.38 .y- - r------7.- -- Cwt per flues tmkm (a) Exduding uucrcst 18-98 20.27 [b) bc~usiingulterat . 21.76 '9'47

wwc ~lriitrh-rhrctrr- in ti) the pcr capita cost of staff; (ii) rhc pccs_ot rtores ant1 materials arid (~ii)the rate of interest. A conk lJ051~~hClgflted)tntrcasc in tlrc Gal cosls in 1966-67 over 1963-64 (gibiilg weiglrtagc of 70: 14: I6 to ordinary working expenses, deprccia- tiolr and inwrest charges) tluc to rise in pricesjwages and the rate of intercs~worked out to 22.2 1)cl cc~~t.If interest charges were excluded,

IO:+.;~I~~I;III [tic rise tlrrc. to IIIC f.~cto~-senumerated above. The unit cost, uttticl. ptnxls wrvict*r \rmtId I1:lve been eveu lower if the anticipat- cd trnfhr- for whictr ;~dditioll;~l;lssc.ts were built up hat1 fully materialis- mi. par~icularly on the B.G. system, IJntler coaching services, increase in unit costs incl~dingintcr~t on the broad gauge are marginally llighta than the rise in prices, wages. etc. It has to bc remembered,

I~owcvcr.that certain joint expenses on fixed assets are apportioned. - between coaching and -~oodsservices in' certain ratios, and the mate- ~,ialisationof lesr freight traffic than mtiripatctl has led to the coach- in^ services bearing a higher share of joint expenses on additional :irwts, built up (luring this period mainly for haula~eof additional gontls traffic nn thc R.G. svstm like electrification donblinq etc."

"The overall unit cost in term$ of gross tonnc kilometre, taking both the co-rhinp: and pods se~~dstwther.' has not risqi more than the inmaw in prices, wag&. ctc., as would be seen froq the follow in^ fipres of percentage increase between 1969-64 and 1966;67 ,in the overall unit ccnt per pns tonne lun. :i I.!). 1 he (mnrn~tcee tlrrtrcd u, know what rewere king taken b) Lhe Rilitways to intralure prlormnnce budgetkg so that Lhr pafor- ancc wan periodicall\ -1 mt tmly in fituncial: but tto in physical term* I'hc Financial ChmnirriaRlr (hilwayn) informed the Commit- ttc* that thc) tiad been going into the rnatter wry carefully. '11 was a \cry intrjtatr and difficult question w fat as Railwayr were cooccmnl. Ism had already *untirrcaken rrrcarn tarb fm purpcma of hx-tion of d.e nurmr ant1 rccnrtirn~ to the11 cxpcc t~tion,it WOIIIR tarih take IWO nr rhrcr years to r nmplctr I hi*.

1.10. 'f'lic Ctrrnn~ittct.c.nquitcc1, how fa1 and in what spccihc ~yher~ ihc rwclicn ol the cat study cell ut up in thr Railway Board. had ken tielpful tct the Kailways. 'I'lic Fin~~rialCommiwioner. Railways rtatd: "I 'hrvr been eiving A great 91of attention to this matter. 1 cannot ! c 1;rinr that out. cc~tinucell tda, ib lull) geared ro unde&tkc the kind of job awl rcymn!+ibiIit\ whit,li they dlould undertake for purvof adpting the management in taking big policy decisions and to cvaluatc \ jurforrnancc. Ncvcthcle~the cell has been undertaking a number of atudim In regard to costing. They produce periodical report, or state- ttrentr abut rapital.output ratio. costs per. unit on maintenance on line haulage; the undertalc mting studies also; they had undertaken studies of the rriurn from passeqgcr services anti gods services. I have now dvtn them the task-of studying thr c.mt d paswnvr service by dam. slow, hdting, fmt end long disranrr ~rvires. Various studies of thir nature art bciq undertaken."

'I'hr Ministry ill a now have btatrci as ululer:

Hrvhg aa#mble$ the clcprlx figpreb separately uqder freight and coaching acrvicc\, freight expenses are further divided into two ratcfforics, mt.. te~inaland line haul. Thcse cmta have been worked out separately for :he two gauw on tach of the !I Zonal Railways as well as fbr the ;hole of the broad gauge. the whale of the metrc page svw'cms of the Indian Railways. Basic average unit costs are available for different functionrl group of yxvires as inc\ieattc\ below:- (I) Terminal cost per tonne, separately for 'full car loads' and 3.CJ.' and also per car in the case of 'full car loads' and fur- Nrsplit up into- (b) tinaim1 mt of hindling LCI. trips: 0 (b) ether inminal cxpse which cover the mt of provision and maintenance of track and structures. $hunting rmt. rtc., rprateh for car loacts and 'IKI..'. a (2). Crnr of tr;~nshipmc~~tfrm~ one pwge to nnoti~er.-~);f tonnc per transhipmcnr .

(a) prr train kilometre: (h) pit car kilomctrc:

(r) (i) per tonnc kilometre-pas load:

fd) C~SIof trartitrn per ItKH) grow tonne kilntnrtrc ((.TKM) , reparatel) lor ste;ini, diet1 and tltrtric.

A further refinement I1a3 twrn i~itroducwl ill IWWiFiAli in that the 'line haul' unit costs arc available separatcl): far 'through pxls trains' and 'van and shunting' traina. Ehcl results are king regularly worked oi~thv tltv '1-rpffir.Costing Cell ol' thc hartl's Office anrl c~on~ri~u~iicattdto ttrr Railways for exam ining any propal for wtion ti, st;~tionrates a~idotlitr proposals and for ,exeftitin# rffectiuc c.ontrol ovcr rxptrtises. 7'he information i\ treat&( ;I\ 'Cnnfidrnlirrl'.

Railway* have ken sskrtl to con~pilcthe exphe clitt;~ and ann- lyse the freight expense, :~ndwork out the batic atrerae unit costs. .% far onlv ihc Ea3tel.n' and tht South Eastern Rail- ways 11ave started cc)rnpilinp, and wbrking out the hroic average unit in respect of freight wvices. Other Rail- way, are to follot?. ' To make thir tool more pugncj111. rttr rmtr should he broken clown Divisionwise or into nm.diet lihogenota units. To t@n with, Railway havc been ;~skt.tl to wo& out Division. wiu cast data.

Ad htrr rrtudicr. far exampie, of the cost of working Coal Pilatr. thc cost of working EMI' services in Romhav. Calcutta ahd h-fadras arcas, the c-tnt of tlicscli~tionof main selected long- distance mail and cxprcnu rr;lir~r,c.corlorniclr of roi~tri~~errr- vices, ctr., have hen rnadc hv 111( Co*rirq C:4 of tht hard'* mcc.

(knting king ,I cont1n110119Imress. the raticn for sppiritment of joint and common rmr have to tx trlxlatccl pericwlically to rake accaunt of impmvemenu tcchnologic;~l tlevelopments ,inti operation tcchtiirltrcr and rhangcs in thc pattern and volume of traffic, cm Chtin~tehniqucs havc to be improved and refined by making IIU of sta~isricnlrcffrcssian analvsis. c+rm.section sampling, time scrie etc.. to ~ttrtlvthr variabilitv of expenes with volume of trafftr Repain and maintenance costs of rolling stork h;ive to hv compilrd for each typelcla~ of rolling stock. F1rrt1ic.r. the effect of 'Time' nnrl '11~'on the cxpenser of rolling rtock h,tve to hr aswwtl.

While the formula for use in drtern~ininp;thc cmt of onc cis wr- vim has hccn finalised and thc basic avcrap l~nitrats in ' rcsycect of goods service5 arc being repl;trh complied from vear to year, the xnalysis of coaching cupcnrez under different functional pxlps of services-trrminnl. line haul, ovcrhcadr for each of the services like pasunwr. luggage, parcels and j catering has yet to be \rndertaktri Fltrther. thr cost of passenger services, bv different cvper of traction. should he made available for- (a) Mail and ~x~resvtrains: a D (b) slow!stopping passenger trains:

, (d) EMU services: and (e) otlw conventional suburban trains.

A terminal study in this connection has jurt been initiated. The second staRy will hr to analvse the running costs includin~ repairs, maintenance and pmvision of locos, coaching st&, etc.. by semi& groupp. :t;hy, thiril stagc h to obtain perform. ance batistics-tonne originated. terminated, transhipped. tpnne kilometm by g?ugcs, tonnes repacked by pupin respect of parc& and luggage. \Vith the rcsulu of the thm ,~nalvscs,we should be in a position to cvolvc a detailed roach- inpprforma that would give basic average, 11dt rwts for pn~ ccls, luggagr and passenger trA1fic. by Railways ant1 by gauges- tho passenp cost bein8 further split under Mail and Exprrss trams. ordinary passenger trains. EMIT trains and other suh- urban trains. It i\ hopctl tr, 'complete this studv by the end of next vear.

l'liesc cost data were made IIW 01 while for~nulatingthe new rates ('C:' class) for "lec~ than car loadsA traffic antl coal. rates. Details of rtnt :ire furni\hed to the Ofhtcr on Special Duty (Freight Strw ture) wito is formr~lating;I new freight struc- tilr<*."

1.1 1. Thc Committee pointc-c! out the set-back in thr utilisation of track, Iocomotivm antl wapriz IIIII i~i~1966-67 as' uhowri in published stiatistic~:

Track. Net tonne kilomctres (in million) moved per mnum per coo running track kilomctres. B. G. M. G.

~9'95-67 2,535 717

Locombfives : Gross load lyt tractive Mort. . R. G. M. G. 1.12. ?'hey were infornled that "~rtilisatioll ot as.urt\ cli~ring 1966-67 was lower as con~pared.to 1965-66 mainly due to the rcc-ession in rcanrr mic activit! (luring the year which led lo a fall iri the level of pis traffic. Partly it wits duc to the change in the patten1 of movement. rc- slilting in the increme ill wapm t11r11-round."

1.13. '1'11e C~miniiitecdesired to hrnv t11e I casol~slor t11c \~eady lall in tlic indice of wagon utilisn~ioii \o far broad gulp was conccrrled. The Chairman. Kailwa) Boarcl \tated that one ol the reasons was refs- i\$ion in the economy ;rnd tlic rtd plants ancl the coal industry not having come up to the extent for wl~irli tlrc planning had heen done. There had hce11 some idling of atsets. He turthrr infonned the Cmn- rnittec that a ven imlwmant factor in I!Witi-67 had ken the risitlg number of strikes. riot\, indiscipline ctc. Tlir Financial (bmmissioncr, Railwavs infotlned the <;ornmittcc, "'I'here ;Ilr hroatll! three factor\ which affect wagon turn-royntl ol utiliwion of varch. One in the loading factor. If the ~rafiit tloeh not increase ant1 there is no loading to the same extent anticipated. ilrere ir inrreaw iu wagon turn-round. 'The other ir the paterti ol traffic. 11 it changer an11 ;rq ;I result mow cnq\ liaulage har to ctionc. itgain die rcquirnnents ol wwns p UII. 'I'hirdly thrw clekntiwis ;111d intrrlercncc\. It is ver\ diffic~rlt to give the precise extent rtl cq)cra~ioriof thew 1ht.c~fitrtcm ;rntl give the rlu;rlitum affected: we rill1 '(1111\ trlalie ;I per\."

1.14. .I+ to tlte cluctstic)~~01' ~III~WOWIII~IIIthat sliorrltl haw tolilr 011 ;itcount of invatmenr iri tliewli~a~ion.dec.trihcatiori ;rlul ~r~tnltnlix;~- tion, tile mami mi^ tet. were info~mled I)\ the Finan( iitl (immissioner trl' Kail&iV$ that clur ing die tt icliri~iorral period tllcir irrvc"rta~ents were rcr~aitii~~g;a lit tlc hi~l~erpj oprtiomte to tht ou [put the> K,JL, T11ere e riri~i~iili~culti I the\ woultl ultir~utrly get ttir full l~jirfitII~ tl~w IIMH~I 11 tItr;+lt+ <)I 11 dr tion it1111 si~nalli~i~wht~t thy dit1 away completely with'steam operation in a particular section or a particular route. a .. 1.15. The Cammitt? pointed out that actorcling to the infarmation received f9m the Ministry of Railways ii total of 18,957 broad gauge waKon5 (ill tenns of 1 %heelers) were placed on the line during 1966-67 of which 13,-"08 were on itdditicmal account. 1 he Commitee dmthe attrhtim of the reprrsentative4 of the Railwav .Bqrcl *in this context to thc fzrt that there was substantial surplus wagon capacity with the Railways ,rt tlic end of the Third Plan. The Camrnittee enquired what steps the Ministry had taken to ensure that the continuecl procurement of wagons did not adversely affect theit operational dciency and the financial results. The Chairman. Railway 'Board explained that it was due to change in pattern of traffic, which had increased the rquk- mrnh of Railways for closed wagons. . a 1.16 The Committee erquirecl whether due to change in' traffic open wagon? procureci earlier were rendered surplus, what wu the extent of such rrdundancy and what action was taken by the Ministry thermrl The Ministry in a note stated:

"At the end of the Third Five Ycar Plan. rail capacity in tenn~of wagow was a head of demand on broad gauge particularly for flows of !mqpmmed traffic like coal, ores. raw materials fo'r steel plants and iron and steel, while on the metre R;tguge, rail capiacit? and demznd were more or less balanced.

This position continued in 1966-67 but reduced clcmand for move- rncrtt of iron and steel and sugarcane accentuated to some extent the sitrplu~of open wapns. An exercise conducted rerentlv indicates that on an overall assesment, there was surplus of 4.368 wagons (four wheelers) on the broad gauge and a shortage of 1,612 on the metre gauge on 31-3-1966. As against this, a calculation made earlier had revealed a shortage of Iaround 8,700 covered wagons in the broad gauge fleet (the shoruge of covered wagons was mainly felt on the broad gauge) as on 31at March, 1966.

As soon as the abow , dismrtion in the typewk availability of wagons (cad by shortfalls in thffic requiring the use of opeas, pm- cipitate cuts in wagon orden, and changed pattern of loading of can- moditia requiring covered wagons) was noticed, medial action nor taken to mtrict prwurcment of open wapns and proff~mme tb building of u many covered wabns as Wibk. fn the Rolling stack Pmpmmk for 196667 to 1968-69, about M,OW broad gaugc d w;rgons have been provided fqr in5luding the qlPcement quimwna- 12 f Meanwhile, in the absence of adequate covered wagons to meet the dranp;eri pattern of uafic, open wagons have had to be used to clear traffic buch as foodgrains. celncnt, etc., using tarpaulins wherr neceb- sarv."

1.15, The bxnmittee note with concern that the Railways rrs into a d&t in I~9tjWi7 for .the first time since Independence. The Budget far iWtii acttcall~envisaged a suqdus d Rs 22.19 crorw, ht this failed to matrrialise and the actual results showed a deficit of Ks. 18.27 cram. The deficit was mi~inlycaused by a shortfall in gp~1searnings. in rapt of wl:ich the Railways had in fact cxpcutcd an incncasc of Ks. 44.53 crows over the retGed estimates for the previous )ctar. It is odd that such result should I~ave1mn anticipt~rlat all. when the Hudget had taken &te of the drought and its repctrcussionb on passenger earnings, which were cxpcrtcrl to go down. The actual results over tlw year showed that the drought affected other sections of the c+cooon~! a* well and upset the Railway's calculi~tionsregarding an incwaw in gcwnls earnings

1.18. In their 2Ynd Report (Fourth hkSabha). the Chn~mittcr.hill.(. already dr~wnattention to the heavy overcapitalisation that took placc: in the '!ailways &ring the period of the Third I'lan leading to thc creation of traffic capacity far in excess of actual requirements. In the 'Committee's opinion, the deficits now developing in the Railways have to be considered as a legacy of the faulty policies en~ldiedand follow& during the Third Plan, which resulted ia an increa.~in dividend liali- lity bf the Railways to the General Revenues from Rs. 55 crtm in I!%*- 61 to Rs. 113 crore (excluding the paavenger fare tax) in 196667.

1.19. In the contrht of the deficits now develolkqg, it will tw netwary for the Railway 10 take serious step to put their house in order. Thc Owuniuee would in this connection like to commend the following hnwd lines of approach: (i) The Railways bhould show extreme ciwumspertion in embark- ing on new capital expenditure. Work like che doubling of lines adexpsion and rmcdelling of yards, etc. fill in this category. bra in this fcpwt, the Comminct hove given wme instances of such worka canpietad at rubrantis1 mts not having lmught the rcrulu expeaed of it. 13 at page 13 bf thb report show chat there is ecope for improve ment in thib pprd. & wav of improving the utilisation of rolling stock and &at baviiigrn til-htfi is to humme the speed of O:%R wit-- It wouM bare the doubk act>ni~n~to public convenience and also effecting eving in expenditure. A particular ,effort sho$d ahhc made to maximiw wagon usage by reduction in the 'turn-round' and further resources should not be com- mittcd to the jburchirw of wagons before a careful awmment m?de of suqkas wagon capacity qisting in the Railways ~ggmttulhv thc* Chrnmittee in paras 1.35 Rc I..% of their Report (Fourth Lrk. Sahha).

(iii) (mt con~lioumcs~hould te inculdtd at all leveh of operation. Somt. of the Zonal Railwavs arP stated to be compiling data ahput the lm4ic i1\w;ige unit rcm in respect of freight ser\ites, The Railwm brd should emure that this data i, spwlily tornpiled 1~ all-- final - used to msrx!wn~ivr* of ~nf'~ra+~stc--fore .---- 7 arcas economws. Other fields where casting and job analysis would )1dp-4- to hl-in!: ahmt economies arc marshalling yards, 'termi- aalr and lutomorive workshap. In regard to the workshop thc (cm~rnitrt.t h;tse t.l.sewhere in this Report made sup tiona far thc introduction of a ystem of batch costing and comparative walnation of the pcrfn~manceof workshops in thc \ ariuu.4 Zones.

The Lonlmictt*e itlt' glad to note that the tost btudy cell in the RaiE way Board ha$ undertaLcw 11wfu1 studits oh various areas of opnarh The Cbmmittcc haw no doubt that the rcsults of their study in subjects like 'Line Haul' (:OM. T.mt of Marshalling' ctc. will he udby the RaU way Board to r\iiluatc thr I cmparativc performance of the individaal Railway and to idate wtd spot. whirh should immediately r&we attention.

(iv) S>stcmatic effo~tsshoulJ In. mndc to effect economy in ap- ws. Two fields ivhkh rhould receive Halattentian art fuel tutuum?. ic?ganti staff strenph. The expenditure oa faanti &ouY brzbjectcd to periodical higb-level rcvicw both,at the Znnal and the Railway BdIcvd, and c~x~nditirwon stall &hi be rtvihwcd at 'tbc ZaaJ k.d by eeGeacr;rl M- in coneulutiom with the Fhusd.I Advim and Chid Amwncn 086cerh as qgatal hta in the 0 Report, to check firmly my increase ind effect maximuml coonomy consistent with efficiency.

(v) Above all, accounting and management techniques on the Railways will need reorientation. The scale of operitiol~son the Railways Jlas inaeascd enormousiy, with a correspmding increase in costs. It would be necessary for tlle Kailwap to d&ard 'ou&oded techniques of checks and cwntroist cvolved iu the past in a different context. Cost control cannot be secured by assersing performance in terms of expenditure incurred. It will require evaluation of output and, fur this. purpose, norms will have to be fixed for various operating indices. This will necesarily require far-reaching changes ii? accounting and budgeting techniques at tlw oprating levels iu the Zones. The Committee recogniw that the Rail- ways haw a variety of awts and operations on which expn- diture ib incurred and ti~iit therefose the introduction of a system of performance budgeting bristles with difficulties. However, a start has been made in this respect and thc Com- mittec. would like it to be ccrnsidrretl how best the pare could be accelerated. b Receipts Audit Paragraph 1.20. The shortf:til ill gross receipts occt trsctl rmtinly under goods ear. nings (Rs.24.91 crorcs) . (In awes of rupeesj.

Budget Actuals Variations ------1.6oods earnings 506.53 481.62 (-)yegr 2. Pasrtngu earnings 227-20 229.~(+)2.1q 3. Other earnings (including suspense and miscellaneous receipts) 61-81 58-04 (-)3*n 4. Gross receipts 795 '54 769 -00 (-126 54 ------1.21. The Budget Estimates of goo& eilrnings included additional earnings of Rs. 18.10 crores expected to accrue from the proposed levy of 3 per cent supplementary charge on all freight traffic (other than iron ore and manganese ore for export, military, postal and Railway material trafFic and certain high rated commodities) ar also+someenhancement ur; the rates for commodities like coal, hard coke and salt for distances be- p'nd 600 kilometm by revision of the existing taper in the ~elmcoprc am. 15 1.22. 1)espite sizeablc shortfalls i~the anticipated goods uaftic during ihe three years 1'363-64 do 1965-66, the Budget Esiiniate also twk into . pccount an itlaewe of 11 million lonlies of originating traffic over I!Iti5-(iCi. 'l'his growth bL traff~c, however, did not fully materalise as the tot;il oflginating revenue earning traffic actually carried during the year wd164.2 million t;nnes representing an increase of only 2.2 million aollnes ovgr that carried in the previous year, The. Rgilways' own traffic' way 37:l millior~ tollties compared to 41.0 million tonnes carried in the previo~~byear. 1.23 .it the time of pewniing the Revised .Estimates for the year, along ~itllthe Budget for the followinf: year in hfarch, 1967, it was c.rplaintd that according to the indicationi then available additional traffic \\a, ur11iLc.h to exctwl 5 nill lion torlnes. ?he Revised Estimates 101 gocxls (.,I~II~II~SHL.I~, thcrciorc., plat ed at8Rs. 13.53 c lo& less than 1t1ch l$i~cl~et'I't~c artual stlc~rtf;~ll.however, WIZ Rs. 21.91 crores.. [I'aragrapll No. 2-Audit Report (Railways), 19683. 1 21 I ht Con~rnittt~t~wert ~nformedthat the buclget estimates for 196ti-67 pretlic tccl .III in

It was cstirnatcrl on the basis of thc tr-rntl\ of l!it-Wi6 that in 1966-67

wise brc;~k-uj>of' anticipated and actual tr;~firin I!lf;ti-f;'i:

1. Rawnur 2bning Tr@i2. (a) Coal 49.4 46.3 14.00 (b) Raw Materials for stecl plants other than coal 8 8 17.9 16-5 3.1s (c) Finished products from. steel plants I 7'3 6.3 j '71 (P) CCK~ 21 '5 (h) Other rrmreritils . 22.7

-.-- - I - - 1.26.. l'he C;oinrni~tcc tlc5irc.d to Lliow the reawtis for the shordall it1 traffic and the rr.(lurtiorl ill l(wl and the extent to wfiic11 goods earn- ingh were alfectctl 1,) car11 of tl~cscfactor$. l'he Mirlirtr) in a note stated that the shortr;tli ill ribvenue c..crrling coal traffic occtirrecl bccause the an- tiripatetl inc~cituc in 1%6-67 over l!)ti5-6G did lot n~atcrialise and the traffic dven fell tnarginally below thc I!Wi-ti(i Ic\ei. -l'Ili, \$-\.asthe refuit of n hi;tckenii~gin .tllr tlemand for ro:a1 from steel pliints as well as other user&

1.27. .1'11r. (;oirlinit~ccabkcd why thew h.ttl I~wl.c pc~gre~civedecline in piarccntitgt. of coal proriurtion carried over the Railways since 1964- liS, as sl~owr~ill "A Review of the performance of Indian Government ~ailwit~s."The hliriistry in ;I note have st~tetlthat during the years 1965.66 and 1966-67 there Ilad been a marked drop in the moven~cntot coal by rail-rim-sea route (.32 met.in196647 against 1.49 m.t. in 1964- (i5) clue to less availability of colliers. ThiR traffic ljeirtg taken into ac- couiit twire irt calcola~ingthe rail movement-otict1 from colliem to the loading port awl again from the unlondin~ port to destination-anv decrease in this traffic would also generalh have twlce the cflwt on retluc-tion in the percentage of movement of rail to the overall production. The increase in pithead stocks at the end of 1966- 67 to the extent of 1.17 m.t. over the .year 1965-66 also contributed to the drop in the percentage of rail movemetit to production in 1966-67 :a7 cmnpnrcd with 1965-66.

A substantial quantity of coal was also consnnki by collieries them- s~lvesand by some power-houses, washeria and other industria which 9 did 'not require rail transport at all. Some of these projects were twoqht inw caslrmtsion during these ymb and others had their ex- pamaon p~~gnmmcser~acuted during thk period, which also affect4 cbc plmtage 06 d movements to overall pnnluction. I

13The Commictcc fdwr enquired whezher the hlitlistry took. nute af.tItis position while framing the estimates for earning pt~ac- muqf of coa1,trafiic and if so, on what basis a~! increase, of trafic of 2.9 milliUrl tonnes for 196647 wils at~ticipated. 7'11~- Ministry in a IICW have statcd that Lor l!Wjti-li'i, i~ wils anticipated that the originating revenue earnill): coal would be 49.4 millio~iton.nes-an incrca\e of 3.8 million tonnes over the rcvisecl estinlare Cot. I!Ni.',-(iC, (Tlic figltrc of 2.9 million tot~r~csking exclusive of coal .for steel plants) . This assessment was rrladr itfter. cht;titiing forecasts from other 31iniatries a11d after he;~vilydiscountiny: some of them.

129. The Cornnlittec desired to know w11;tt action Iiacl beer~~taken at war proposed to be taken to check overestimation of coal traffic to hrb moved hc r;til. They were informed by the \linis~r) tlli~t acconl- ~ngto the new strategy of planning, a Working Group 11;d been set up to asscqs tllc requirements of rail trailsport it1 the Fourth Plan. The Planning <:ommission and ill1 the ecotionlir Xlinistries, in ntlditioii to t.hv hl.h.I.'1'.C. and the Railway Ministry. were' rep.est.ntetl or1 this Group. It was the function of the Group joint,ly to 'examine critically the dcmd and prduction cu~imutc*sof all the nl;~jorcommoiLitit~, it1 clutiing cmcl, devclopctl by other iZfit1istt.ieslf2'orki11g <.roup, ant1 to evolve rail tralqnwt requirements th~ml'l-on~tal: itip; it11 tlw relevant factors. inc-luditig the Railways' own empirical esperience, into account. The Cnmmittec wcn-e also informed !.hat the Railways' annual tr:Ittic estimates wcrc being kept t~nderrewlar review-cvery quarter or so- by an int.er-Ministerial Group func:tio~utig ur~der the Pbnning Commission. Actt~al trends of movement of ;)I1 major commodities, ill- cluding coal, were reviewed ;ind ncrrwry :ttljustnicnts made in fuiure. forecase.

The reductjon in lead was because of a change in the pattern of ruovenlent. Caal loading in Bengal and Bihar roalfieltls registerec! a decrease while there was an increase in coal loading from the outlaying coalfields which involved a shor&,lead. The Ministry further stated that in view of the teleqlc nature of freight rates, it was not practi- <,il>leto estimate the precise effect on earninp separately of the short- f~l!in traffic and the reduction in lead. (I 1.0. The Committee enquired why there was a shortfall in traffic, ill tW6-67 $ respect of raw materials for steel plants and finished ducts from steel plants. The Ministry in a note have stated that the ~roductiond iron and steel in the major stkl pldnts, both in the . T prblic and private .pcwrs, had actually droppet in 196667 domptCa with the prcvim~syear. 'Thcrc was alao decline rn danand for inza and , steel materials which Id to accumulation of rmcka wid produam. Thi intake of raw materiab had also bcm crmcspondinglj Im than the anticiptimdn tilt* butlp;cf atimatc. a

1.81. .l'l~e'C$mrnittkc pointed out that them was a decline jn *rjRon loading of pig iron and steel from other points since 1965-66 according to the data given irr 'A Review of Perfomnu of Indian Govtm- men( Railways' (I!%H) .' 'I'he Ministry in a note have *vcn the following explanation :- "'Tile figures of w;tgon loading of pig iron and other iron and ureel from 'other points' (other than Steel Plants) on the Ilrund Gat~gc-were as under:

1964-65...... I 86 thousands 1965-&...... IS:, ., 1966-67...... I 29 ,. :rhc movcment of pig iron and steel from points otlm than steel plants consists of imports of iron and steel and machi- wry, ?tnd secontlary and tertiary movements of iron and steel which romprise mostly manufactlrretl articles OE the engincwing industry. Imports of iron and steel declined from 1.19 million tonncs in 1964-65 to 0.91 million tonnes in 1!)65-66 and to 0.47 million tonnes in 1966-67. This acroi~ntsfor a drop of aboi~t14,000 wagons in 1965-66 (com- prod to 196 1-65) and 22,000 wagons in 1966-67 (compared to 19654iG) . In11prts of l~~~hineryalso declined in the two years l!J(i5-(iG ail(\. 1966-67 compared to 196.1-65, as shown by the clunrltr~nl index of imports of machinery and transport cqiiip~iicnt,which came down from 161 in 1964-65 to 146 in 19(i5-6G and to 103 in 196667 (with 1958 as the base- 100)..

The secondary and'. tertiary movements of iron and steel were adversely affected by the slump .in the engineering industry, the cut-back in ~overnrn&t orders, slack demand from con- sumers for certain items and stagnant exports, and the slackening of investment in 1966-67 which resulted in a fall ' in the .demand for capital, goods." r * 4.32. In reply to a question whether this decline in wagQn loadings was taken into account by the Ministry while framing their estimates, the Ministry in a vote stated: . "Pig iron and steel other than from st4 plants originates piecemeal at too many points to. admit. of *any specific asresanent. ' 9 It is, therefore, taken a a part of General Goods trafhc tar which the amemnent is matic on the hasis of the economic psitidl1 and past trends. In vim of the then prevailing yonon~icrctession, the prwise dimentions of this ;u well . :IS other general gods traffic could not tw forecast." T.33. The&ornrnittee pintetl out that there hatl txp a pr&cmive decline :n percentage of prc~lutlion of certain commodities like cement, jute manufacture, cotton r~~.~nufacti~reetc. moved by rail. Thr! Ministry have.informed in 3 note that t11c mas! importilnt cause of the reduction in thr percentage of total prcxluction of certain commoditiar moved by rail was competition from road txansprt. There had been a ;uhstanti;~l increase in the Kilometreage 01 roads anti in the number of road trucks in the country ant1 this inrreasc hatl ten puch higher rhan the increase in the prodwtion of commodities like jute manufac- tine ant1 cotton manufacture .

I'he percentage of rail movclnrnt of cernent h;~ddropped progressively from 93.1 per ccnt in 1950-5 l to 80.1 per rent in 19WG7 because of the dispersal of ccmer~t industry over- the different regions which had also led to a change in the pattern oC movement. The .increase In the avc.r.tge kid of cement rlafftc- suggested that was shnrr distance trafl~cthat had been diverted to other modes of triinsporl.

The percent:tge 01 rxil ~ltovcrtlcmtof jute mar~ufacturedeclined Prom 31.9 per tent in 1950-51 to 23.8 pcr cent in 1066-67. Although the domestic off-takc of jute in:inuf;icturcr~ has been stedily going up, the quantum nnd proportion of rail movement hatl not kept pace .with produi-tinn, intlicating wmv diversion to other modes of transport. Thc rctluction in the perccrtt;lge of r:tfi movement 01 cotton manu- tacturcs to total proc1ur.tion was from 81 per rent in 1950 to 23.3 per cent in 1966-67. It was due to (i) competition from other modes of transport and (ii) increased tlettntralisation of the production of cloth In the country, which had led to more Joc:~l consumption, involving less rail movement. 1.34. In reply to a question, whether thk decline in the *percentage of production of the above comlpodities moved by rail was taken note ot while Eraming the estimates of goods earnings in respect of these commodities. The Ministry in a note explained "The estimate of the likely movement of goods traffic in 1966-67 was prepared on the basis of the actual goods earnings for 1964-65 aod the details of the. tonne otiprinatiq, lead, average rate of earnings of selected commodities and the trend of performane and earnings of selected commodities and the trend of performance and earnings for the first nine month8 of the, war 1965-66. and not ,or1 the percentage of production moved rail." The Ministry further btrtcttl that no detailed arylysir was mPde ia re+. pect 01 general traffic. inclurling jut. and cortcb~? manuhctum. as thev wm too numerous for individual urutinv and estimation. k repr& cemcnc, ttlc Mir~istr! rtntctl that the rate of growth 61 cement prduclion came tiowr~ I,\ 1.5 pet cent in 1966 dver 1%5 as apkut 9.2 per ahi in 1965 over I!)lif. The stocks with produeen alw increapcd to 198 thousand 'tonnm at the end of lZHfi-67 from I33 thouwxi too- rrcn at the end of lm5-Tfi.

1.35. tl'l~en .a%kccl ;I~K,III tlw zllo~tfiill it1 ~ne~alpds traffic, the Ministry In a note ctated, "'J-l~c ;~Jscssmmt of general gods traffic is ma& an the havir of the trend irnd not with reference to particular commodities. At t11c time of framing the budget estimate for 196667, the ;~ctnaltraifrc ~no\.c'clclwirlg tlw fint nine months of 1965-66 showed an inqcav of 3 nlillioii tonnes as abmparcul to the corresponding ~'cri-iodof the previous yc.;~~.It w*,therefore, :rrrtit ipated that for 1966- 67 ar a whole t11ere woi~lcl I)(.it11 increasc of 5.5 rnillion tonnes under general jpods over 1965-66,. 1'11 i\ ant icipntion of additional trafiic, Imvever, did not materialiue tlrw to the rccessiom and to bandhs, hartab, srwt civil distllrbanceh whirh ;tclversel) affected the movement of rail traffic." '

1.36. The (hnmittee debired to krmw tllc reasons for the sireable si~ortf;rll~II Knilwys' own traffic of coal and other materials. The Chi~irmat~.K.~ilway Roarrl stated th~tit was clue to reduced construc- tional :mivitiv- ?'he Committee desired to know the extent to which this factor wau operative during 1966-67. ?'he hfinistry in a nw stared that the sllortfall in Railways' coal traffic was mostly a cone cluence of the toral good\ traffic in 1966 being at a lower level of 201.6 million tonnes against 2 15.9 hillion tomes anticipated in the Budset. The shortfall in the other railway material was largely due to redud tonstri~ctionartivity on tl~rRailways.

1.17. Askecl about tile extent of ticketless travel, the Chairman, Kailwav Board informed the Committee that they had appointed a central ticket cl~ckiagsqita!l to gauge the extent of ticketless travel. The loss calculated on the basis of saqple check conducted by them was about Rs. 12 crores per year. Bait they' felt that the Iws should actually be double of that figure i.e. more than Rs. 25 awes inrtead of Rs. 12 crares. considering that the check was only a sample and covered a small percentage. b oaf.Eifth of thr: illcfepk in ucrlfir cxpectd The shortfall was mpinly o~. acunant at ad cement, genclal1500bY Ybd me1 pbu tmsc. Tb f-jttoe hwu in paras 1.11. 1.19 d 1.24 of their Forty. Ninth Reprt (Fourth Lok .Sahha) alrcrdy drawn attention to the need. to enswe hat cstimtag of cralfic in resprrt of these cummrwfitics am &awn Gp on a realistic basis, in the light of cmpiric-al data. which khrmld he hbjr~ted80 periodic91 micw on the lmsis of known 'and anticipated demand >mi production data for vilrioub cmnrnodities. The Committc~ ho~.t Itat this will be dune and that. in the prcwms of assessment of trafftc. tlw 4ptificant progre\\ m;idr ill road cotnmunications and their impwc on tllc Railwa!\' share of gwd.s traffic will he kept pmminen~ly in view. 1.39. Tbt. (;omtnitti.c notc that the Railways arc &iaining m- cstim;~r& law of Us. 25 c rort.5 ever? ?;car an acCount of ticketleoa jravcl.. While tlli. d~twkitigmil can be eradicated only with the growth of civic con* ioosnes.c among the travelling public, the Cammittw would like thc Railwa)s to toncidr~in what ways the intensification of checks and' thc usertion of ortltr and diripline can help to minimix* the Ios.~~on* thh account

1.40. The break-up of the increase or Rs. 15.05. crores in the anticipated retc~luerxpenditure is as under:- ./ --- _------I_-----_ _-_- * _-_ _----- . - Particulrs Rudget Actuals Variafims (In cmres of rupees) ------. - A.-Working Expenses- (i) Staff-.4dministration including Staff Welfare und Operating. . .187.54 192.58 (+) 5-04 (ii) Repairs and Maintenance. 164.63 169*95(+)5'32 (iii) Fuel. 103.76 rrro.17 (+) 6-39 (iv) Miscellaneous Expenses including optration other than staff and fuel, I payments to worked lines and suspense. ri.91 53.05 (+) 0.14 (v) Appropriation to Qepreliation Reserve Fund . . 1oo.00 1o0.00 . . (vi) Apprupriation to Pension Fund. 13'50 13'50 . . B.-Miscellaneous Expenditure such as cost of Railway Board and its attached offices, Surveys, Audit and Subsidy paid to Branch Line Companies. . S'# 5'60 (f) 0-I< C.-OpeI fhworks--w. . 12'00 10*03 (-1 1-w , Tots1 Revenue Expendimre . 49-85 .654*88 (+)r5*o3 - - ---I---.---._ _ ' 1.41. ?'be Budget himatn of st;rft expncliturc inclutied Rs. 2.66 crarer fw the rmintenanrt of additional track.*).~rdsam1 other assets exjxmed to be l~rought into uw during the !tar l?te provision was' ' J uii. Anothcr KI Wl t rores w;ts plot ltlcd for ~r~cetingthy cat of additional staff ~cri~~imcifor moving the atlditional traffic anti- ripatd'cluring the tcSilr \piwt thi* 111oti&)11,i \attiirg 01 R5. 1.4(l h acms was atlbwh In rllc \pproprhtion ;It t oi~nts tluc to hon-operat~on or delay in olwrr.trio~~of dtlitional pcnts, rc-tl~lretlpalmrnt5 on :lccount of overtime err.

1.45. The Budget Fstimates for (wt of fwl inc-liidetl iirltlitional provision or Rs. 3.0 crows for the following reasons:-- - - (In crwcs of rupces) . - (i) Expansion of tficscl maion fiw rn(~vingi~ilditicm:~I traffic I .Mi (ii) Expansion of Electric tr~~zicmon five Iiailwq~. . 1.83 (iii) For incm-c in traffic understearn tnlction on '.enni!) Railways. 0.53

I'artly ctwnterh:llnnctulbs rductitm in thc co-lsun~pti~~n1 ,t'~e>li on certain Rxilwqs owing 1) trtly ti) progrwivc substitu- tion of steam trxtion by diesel ~rdctionand lower r'jtc 01' ccmsumption of coal. 1-02 Net incrcase . 300

1.44. The actual expenditure dt:c to increased consumption of coal and tliesel oil was more than tlre ~ud~etEstimates hv Rs. 1.80 crores, while he reduction in expenditure on tlre tonsumption of electricitv was of the order of Rs. 66 lakhs only;

1.45. The above increases in working expenses which were speciafi- tally provided for in the Budget Estimates to cope with increase in traffic adversely affected the financial results of the Railways during 1966-67 to, the extent of &. 9.38 &ores of which Rs. 2.66 cmres was on f.he maintenance of additional track, yards and other assets. Thectotal originating traffic (revenue and non-mrpwei moved during the year war 1.4 millian tmnes ltsr than the traffic mod in the previous year. 33 * 1.46. The cre;rtiot~'of new Zusal R;~ilwaywith effect from 2nd ber, I!M resulted in fqpher addicic~~r;~l,expenditure of Rs. 31 hkh~on .the prr~onrwlwired for the Zonal Headquarters for J period of aknrt 6 months. .inother Rs. I I lakhs wit\ qxt~t011 re org:ttli~ation of P- nneI Brant i~ an the Soutli Eiwtcrn R:~il\v.ry 0 . (Paragraph Sn .,Y-.\uclit Report (R;\ilw:tw\ . l!)tiR\ . a *

1.47. The tommittee pointed out that ~)rocisio~ltotalling Us. 9.06 crow, wit, il~cludedin the Budget cbstim;itc spcc.ific.i~ll\to meet the anticipated ;ttltlitianal traffic and the actual expenditure wits Rs. 9.38 c~o-. The Committee desired to know how this t'xpe~l(liturt'came to he incurred when the ntlciitional traffir did not ri~at

(1n' crores of rupees) 11 e b wJH be rccn that rhc fuel bill of .the Raihuap'has been scl;di1y in- cxmsing and amounted ta about 20 per cent af the total working ex- pcrarer-

1.49. Thc followinp; table gives the figures of coal consump)ion on th. Rai1wayn:- L (h ---- .--. . - -. .---. * - - Quantir!* Cost of c~fc~L~I cod1 con consumed sumeci. (in million (in crores ton9 of rupees)

It will be sect) tI\;it tllc coirl bill progressively i~icreased. 'Illr quantum of coal com~mption;~lso went up; this occtrrrctl tlespi~e ;I 1.ec1uc- tion in the n~trnberof s~cati~iorc~notives from 10.615 ill I!)titi to 10,226 in 1968.

1.50. The Committee asked for data regarding coal consumption per tho- tonnes kilometre for the ypilrs 1960-61. 1965-66 and 1966- bi: ~n

"Pnssenges nvd Psoportion of Mrxed: The rate of coal consumption on this service on the Broad Gauge increase from 52.5 kg.llOo(l GTK in 1960-61 to 54.5 Kg.11000 GTK in 1965-66 and 56.2 Kg.llO00 GTK in 1966-67. On the M.G. system the rate of coal consumption had increased from 57.5 Kg.11000 GTK in 1960-61 to 57.6 Kg11000 G?;K in 1965-66 and 58.2 Kg.IlO0 GTK in 1966-67. s

Thi: increase in the rate of coal consumption on passenger service during 1965-66 and lM6-67 is mainly dye to the reduction in the supply of selected grade coals, from 26.6 per cent to the '. total supplies in 1960-61 to 13.2 per cent in 1965-fif, and to 11.7 per cent in 1966-67. a 0 Tk inctease in thc rate ot ctral tonsurnpri;,~i on ;hi C;mh and proportion of AIixed Se~vicei5 main]\ attributctl to the diescli- satloit .~tid clectrif~catton of throiigli pcx~ls services. With the %peration of miketi 11 ,N trcyls 011 the sanw srctions. faster and heavic~r tr.~im wt8re Ii,i~ilcd P\ tlicwl atid electric loras while S~C;IIII locos wcic rcleg.rtctI to slow .irrtl light trains. The coal u~ilisation cfhc.irnc.y as given-1)~the figure bf Kp. per 1000 G'I'K is ~iota11 iibsoliitc figure htit ;I rcli~tiveone. phich is influenccct not ot~lyhv cti;inges in piides of coal utilised but also by variation in the gross loi~d ii~idtlw kilometres run. \Vhile the coiil r-onsun~l)tir)~lis prtym-tional to the kilometres run under ronstitnt cotitlitions of 1o;rtl etc.. thc steam locomotive is pal.ticularly w~sitivcto ],art load working. Trials with varying load showc.tl tliat coal t:onsi~mption does not 'drop at the silme rate ;is the load: in otllcr words consumption rate does not recluce pro ruin with the drop in load and vice- 7~s~.The increase in average sjxecl of gtn)tls trains in I=5- fiti and 1966-67 ;IS cornp;lretl to 10fi0-61 ~.esultedin more un- productive engine hows oti mid with rorlsequcnt increase in coal consumption rate." 1.51. The Committee are informed that various steps have been undertaken by the Railways to achieve real economy in coal consumption. There is a full-fledged Fuel Control Organisation on each Zonal Rail- way under the overall charge of a seuior scale officer with Senior and Junior Fuel Inspectors under him. The inspectorial staff have been linked with the number of steam locos based on each Railway.

1.52. The Committee understand that a Study Team on coal consumption appointed by the Railway Board studied the various factors influen- cing specific coal consumption an$ had quantified the effects of change in train loads and speeds ono specific coal consumption. The report of the Study was forwarded to the Zonal Railways for implementing the various recommendations contained in it and to furnish quarterly progress reports The main conclusions~recornrnendationscontained in the Report of the Study T& on Coa4 Consumption are.as follows: (1) The increase in number of passenger (steam) locos on south', Eastern and Norther? R?ilways has been disproportionately rctl~~ctitr~~it1 f~umbcr of Icrcrtr I~.tr txY!n slower on Northern Raiiw;~) than on Eastern, St,iitlr E~stctn;tmI C~ntl-31Rail- ways. 'Therelore. ;I clc~ailc-tl ~r~vcstig;tt io~~of this .rcprt by Norttlcrrr Railway ic' rcc on~m.r~(led."

".\ st~ltiy 01 I~I~II~II~01 sliunting at~dvan gods trains be untlrrcake~rwith ;i view to find out a pattern of working that is 111o5l erononlici~l I~om;111 points of view." a "In caw of Centr.~lRailway. it has been possible to deduce reaso~isior only -1O.fi per cent of the additional coal tansump tion in 1%6-67 tluc to real rise in specific fuel consumption compared to 1961-62. With train loads and utilisation of locomotives while in traffic use in~yrovingduring this period, the reasatts for increase it1 specific fuel consumptioil to the extent it has :~rtually occurt-er! remains unexplained. The Cxn- tral Railway should un4crtake a detailed study to find out the causes simultaneously checking their train data figures."

1.55. The Committee note from the report that in arriving at these conclusions, the Stydy Grgup made due allowahce for the &ts of train speeds, train loads and the use of laver grades, of cqal, all of whkh had been represented by the Railway Board as factors responsible for increased expenditure on coal censumption. 1.M. The -tux enquired what the omount of low of coat due ao pilferage was. R;e Railway Bgatct have in a mefurnishtd the hkwing information: ,

Value of property Year Net Loss . Pilfvrerl Recovered (in ,Rs.) a (in Rs.) (in Fs.)

1.55. The Committee were also inlo~mril.that tile Kaibwayb who* perrorm;~ncehad not been analysed by the Stuck Team had been asked lo condt~ctsimilar studies slid submit rcsults thereof also to the+ Rail- way Board.

1.56. '1'11~ Cornmittre drew attention to s \tidy concluctecl by tile Eff~cienry Bureau which indicatd that blocklcrmsirig st;~tionabn certain Iwanch lines could he closecl down. In a note or this point, the R;~ilwnybard have stated that "final derision has been taken to close or downgrade 66 block\crosting stations on 35 sections in all. This will mult in a recnrring annual wing estimatecl at about Rr. 9.14 lakhs The feasibility of closing down or downgrading block~rrossirl~statiohs an 63 more serfions ic king examined hy the Zonal Railways."

fiv) Inlrodurlrota o\ 'ottr PPI~I~I~only' sysl~ttz b 1.57. The Committec pointed out that tile study of the Efficiency Bureau also indicated that in branch line sections, where traffic waa light, the introduction of 'one engine only' system would brinq about economy. In r note 'en this point, the Railway Hoard hAve stated &at "the 'ohe engine only' system has so far been introduced on $9 sections in all with an estimated artnud retuning saving of about Rs. 3.85 laklis. This @I- tem of train working is 'expected to be intr@luced on 7 mare &rions? /, fa) Review of btatf slrength rn tht Railways 1.58. The hunrttee enquired whether the Efficiency Bureau had reviewed the staff strength in special organisations like Metric Cells, Pub- lic Relations Cell and Flood Control ~rgarliratiori:.'It 1- been rt~tid by the Vlway Board that "the Efficiency ~urcauhas conducted n r&qv , - 4.7 ,l s 142 (~ii)&3. 28 &'&e rt;rflE rtnmgth in the Metric Cklb md Public RelatIonr Cetb aE tht Zolnrl Rrrjlrny with he following wulu:------.. --- Appmi~ No. of -Ecoqomy mate No. OtPff(non- achlovcad of SuLff ga2xmXi) conaeqycnt Ramarb non-gazcned) actwlty on reduc- wmm- rum- tion (pzr mended dcred annum) for taduaion -----*--- JMmic CcIJs . : . 224 176 Apprdi- 48 posts mately. have been Rs. 6 recorn- lakhs mended for sur- i render by I end of I*. Public &Litions Organisations 50 . . . . The E.B.'s remm- mendation are being exam in4 by the Kailways." ------.- 1.59. 'The Committee pointcd out that according to the statisticr given in the Report of the Railway Board for 1966-67, the total ex- pcadi~ureon class IV establishment, taking open linc and construction during 1965-66, was Rs. 129.16 crores or over one-third of ttK Railways total wage bill of Rs. 399 crores. The Committee enquired whether any norms had Ixen cvolvecl for the fixation of strength of class ZV establishment on oben linc and construction and whether the Railway Board had taken steps to enforce the norms strictly and if SO, what was the economy achieved. The Minhtry in a note stated: 'Yardsticks have not been laid down by the Railway Board for the fixation of strength of Clas~IV establishment either on open line or on construction. The Railway Administrations concerned h6ve prescrii#d yardsticks for certain categories. whenever considered necessary and feasible, having regard to the local conditions of working. Sardsticks for determining the strength of cerdin catkies of staff are thus in vogue. Where, however such yardsticks do not exist, the strength of staff is determined from time to time, on the basis of actual work-load and other attendant factors. # ' $1.60. The Railway Board have issued instructions to ail aheerned in bocanber, 1967, lawdown o uniform -ti& for provision of Clvs IV SWitt oflicesflices,As these orders 'krebisdu&. unly last year, the fa r impact of the earnamy rchitvcd in iwllu of posts sumndemf would be known onlp after somc ti&. The Railways have been asked to htimrte rHe number of pdb already surrtndeted and the number estimated to be surrendered by thc implementation of the above orders and the P..\.C. would b~ advircrl of the position shortly." 1.v. When pkdto indicate the rcwionty rrtual!y achiqved as a k~ult of review reported to hove been carried out by Financial kdviser and wef Accounts Ofhms of each Zotlal Railway the Ministry in a note stated, "on representations being tnarle by the Railways the earlier instructions regarckhg review of the ataff strength 'to be undertaken by the Finat~cialAdviser and Clricf Accounts Otficers of the Railways were moctifierl ant1 instead they were askd to keep a special watch on the trends of staff strength only for the deprtmepu for which ,diSpfopor- tionate il~cre;rsesare noticed. For such, departplents, they Ilwe been asked to undertake special reviews so that the trend$ of increa* cnirld be brought under control. It is cxpctecl that these reviews would result in arresting any unhealthy tendencies of staff increase." 1.62. The Chairman, Railway Board informed the Comtrrittee in evidence, "So far as the general question is concernect, for the first time we have come to a sti~gcwhen we have halted the increase in staff.. We have stopped recruitment in most of the categories. As you know, the policy is not to retrench any body...... Tilet-efore, by the process of retirement, there has been some slight reduction in stafi instead of the usual increase in staff. This iu the result that we liitvc nchievetl a5 a tint step." 1.68. The following table gives the percentage expencliturc on staff in the Headquarters of the various Zonal ~ailwiys,during- in relation to ihe-ioti1"~x~i-E~ailwayras also the financial rcsttlts of each of the Railwnvs:- 0 ------. --. - . .------... Perce~~tageFinancial ---- results- (In cmres) Southern Railway 5 99% -6.49 Western Railway. , . 69 2% fI3'50 South Eastern Railway . . . * . 7' 91% -I-15'47 0 Northcast Frontier Railway . . 9' 7% -2-22 Central Railway . 8. 55% -kI5'93 Northern Raulway . . . 8 % -3.83 North Eastern Railway ' . .. . 11; 8% -9'91 &stern Railway 6 % +YI7. South Ccaaal Railway . . 6. r;$

Not+ : (+I profit, (-1 loss. I . aw: clf Ndrtb Eutnn. h'ortheast Frantier, C3cotral uad South Ewem Ksilwny wcrc rvhtirely hi* fat the following masom: "'Thc North Lastern ant1 Northcut Frontier Railways are or- ~nrtirerlrm a r)epartmental bub wheream the* rat of the . Kii~l\t.,s* arc organistd on a Divisional basis. A large wlbn~c.of. work wllish ic normally dealt with at divicicmal headqir.rlctSir on a Railwity worked on the tlivisioaal systm* is done .it tlrc Ircatlquarters level on ;r railway orffanid on the tlejwro~c.n~alI,;rsiri. nlia atcounts for r;dativel~ higher pcncntagc. of cxjxricliri~rcon the North Eartern ;~ndNorth- cast Fronticr Kailwa!r.

1.65. Tlw

(i) "The drop in productive utilisation of Icwo hours made available to traffic" in some Railways.

(ii "The dispmprtiona tcly large" increase in psscnffrr Icwwmo- tlves in some of the ~ailwk~s. (iii) The "slow" pacc of reduction of steam loomotives, in some of the Railways. with the reduction in goods tra* hauled bv steam traction. , iiv) "The disproportionate increase in coal consumption on shwnting e&nes.* 1.6Z There Is an qhly vital m~clto ktep a check on lhc cw~~su~p tioa d ciieK1 pi1 d P.O.L. W irh the increasing pace ,of, dieselisat ion, rbat it& will amount for a progrmively increarini proportion oE tlw Reiiways' fuel bill.

1.68, The '(;oglmitm observc that the total fuel bi!!~-~tthe%sibays amwmtl, on an average to a fifth of their worlring-t,~nses. There is, tbaufo~i~~~~lw~rdto kettp this item under continuous high-level review. The Financial Advi.m attached lo the various Znnal Railway should also Ltvp tab am the p~irionin this rcgprd. .

1.0. In view of the deficiw in thc wowhing rtwlu of the Railways, there is~ed-tg enfgn-e econo-pherrs . . ah. A study by the mciency Bureau indicated that operational economita could hc? achieved through the closure of certain blockicrossing #tations and the introduction of 'one engine on1 ' systemins. . The Cam- mi7mnOt''c4 t at some of the recommendations made by the E&icncv Bureau in this raspcct have been implemented and others are under -mi. deration. The Committee would like early action to Iwr taken in this regard. The Railway Roard and the Zonal Railways ehoultl also ashrwa the scope for economy in expenditure on staff, on the basis of atudjcv of organisations in Railways condu~~bv the EfFic&n_c~Rureauand -review at prrent etatd to ic*undt~way by the_I_- Financiat ,.._". -- a Adhof Zonal IC?iilways.

1.70. The comparative evaluation at page 50 of their Report would indicate that the ataff position in some of the Railways like the anwar and South Eastern Railway would bear closer scrutiny. In fact the Mait way Board should carry out periodical reviews of the working of tjle Railways, not only from the point of view of staff but frotn pfnt of view of overall financid results so 'that timely action couM taken to arrest any deterioiation in performance. Accumulation of map on Railways

Audit Paragrnplr 2.1. In para 12 of !hc Audit Kcport, Railways, 1963,,it was reported that, over ihc years 1357.58 to I961-fi2,there had been a steady increase in the percentage of the value of surplus stores to that of rota1 stores balan- t 'I'hc hfiriist~! of RaiJwa!r (Kailway Board) had then explained I II ill t It!: I .IW 01 sortie pf the Kailwayq, surplus stores included ferrous 6( 1 .I~J tvlli~licould not be disposed of because of a ban imposed on their tlispbbal, and that the psition was likely to improve on account of the lifting of the ban, deconuol of certain categories of ferrous scrap and large demand for such scrap for defence purposes.

2.2. The position of accumulation of scrap on Railways did riot ay- preciably improve despite the removal ol ~.esuictionson disposal of ferrous scrap in November, 1962. The scrap at the tml of the year under review was valutd at Rs. 10.81. crores or 8 j)o' cent of the Stores balance of Rs. 135 crores.

(hmoum in crores of rupees) At thc cnd of Scar Total Value of scrap Percent lge stom -- -f scrap to Ralancc " Ordinary Surplus 'Ihtal tgtal stores balance 33 0 2.3. The Committie were inforplcd that 'scrap materials flow from line, Construction Projgcts and workshops to the various stom Wp . depots-about 2 q 3 of which an situated on each of the zonal Railway Administrations. These are sorted and segregated unclcr headings sped. fied for each Railway by the zonal Administration in their mpectivc 'Schedu4es of Scrap' andhll such scrap is put up for physical cxamjnation pcwcally by a Committee of officers, representi% the yagous technical .consuming departments of the Railways, with a vlek to exploring all the possibilities for reclamation, conversion or use as such, oE these scrap material, to the best advantage of thc %$way. The mpfinally tleclarecl by the Committee as economically unusable and surplus to the requirements of the particular Railway is disposed of through the me- dium, normally, of public auctionsl tenders."

"Most ol tile disposals to trade is by auction. As the prices obtained in auction are with refererice to particular lots and depend on the'physical condition and content of such lots, lots once auctioned cannot be added to with fresh receipts until auction deliveries which, (because of physical considerations of ~olumeand weiglit vis-a-vis the handling and transport facilities econolrtically avai1:lble) extend to an average period of 2 to 3 months. Because of this limitation it has been necessary in ~~ricticeto 'close' n partic tthr yard in the depot after survey and accommodate fresh receipts in n different yard in thc same depot which in tttrn would bc 'closed' altrr the contents of the first yard are disposed r[ :tnd physical delivcric4 arc completetl.

*lfw steps taken to maxirnise iuir1m1 utilisation oE scrap and dispose ul the brlances of such scrap as were not required by the Railways werc c xpiainccl as under:

it) Ferwus Scrap.

"The Ministry of Railways, during the closing years of the Second Plan, considered it desirable that the arisings of Ferrous Scrap on Rail- ways should be used to the best advantage (thereby conserving good steel instead of being sold in the open market. As a first step, the Railways werc instructed in 1957 to stop sal; of all scrap including condemned rolling stock excepting. * . (a) Sde against contracts for manufacture of C.I. sleepers for Rail- ways. 0 (b) Sale to Ordnance ~actorks. These 'restrictiks were impoep after effecting spt checks of important scrap depots and after hating necessarv discussions on the ipdigenous availability of requisite capacity for conversion of wrap into finidled steel with steel Zoi~ndriaas ale, the Iron and Steel Conlroller."

"Arrangemtnr~wvc n~:ltleto allut hfclting .%rap tlttough *therlton and Stweb Controller to Ordnarrce Factories and furnance owners engaged in the manufacture of Railway Storc~. Besides melting map, ~onv6rsion of scrap rails into tie-bar3 ant1 wrap avles into rounds and scrap tyra into spring steel flats, hv rc.rollir~gwas also undertaken The Directar General. Supp1ic.s and .I)i~posalsat the instancc of 1l1e Ministry nf RaiI- W:IVI cwterctl into cntlrr:wts with firnl~for si~ppjy to Railwayr ol tie- bars ii~an~lfacti~rrclfroin steel ticran whith \

'I'hc ac.c,~~~iiula~ior~cof fcr~o~I.; acwj) Ii;~tl b!. cv~tlof I!)O l -lit' I.C;~Chtd a level of b bout 18 nlonths' :t~isilipclcspi~t, tlic i~~tcnsivcand sustaincul clrive lo u~ilistb \(I';IJI for K;til\\~;ty~'owri ~~c.c.d\oi lilii\l~~'CI~~ccI. 'I'lw Imard therefore is511ed instrr~c.tionsto all the Railw;ty Adniinistratio~l, in Ji~tie,. 1!W that fer~.ousscrap whic:h remained surl)lus even after its maximurn ulilisation' for Ritilways' own purposes in the rnanrler that had been spccificd in dctnii f~omtime to time may be offrretl to tlie Ilon and Steel Controller for disposal. The distribution t.otitro1 esercisetl by the Board 142s also removed ;1nt1 the Railways were authorised to releabe in consultation wit11 II~IIsntl Strc.1 Controller tlte scrrip to ~na~i~~facturcrsof K;lilwiiy Sto~x~;tltcr tltey 11;ttl r~lsiiretltl~itt the scral) ro rele;isc{l was nt.iliseil only for K:tilw;~\~)~iip~ses. 1)ut ing 11lc IP~Iiocl 1!).',5-56 to 1!)57- 58 the everagc i~nriu:~Iutilisation was to the extent of 1,45,000 tons, whereas during 1958-59 to r960-GI this rose to 1,79,000 tons."

'Based on the finding\ of the Scrap Committee set up by the Gov- ernment in July, 1961 who submitted its report in March. 1962 who submitted its report in AIarch, 1962. tile hlinistry of Steel and Heaw Industries (1)ep;wtm'ent of Iron and steel) decided in Aupst. 1962, that price and distril)utio~iconkrol on almost all categories of scrap gene)-iitetl on the Railways other than re-rollnble scrap ~houltlbe removed ' a "The Ministry decitled that such of decontrolled items of scrap as could not be utilised for Railways own purposes should be disposed of by auctionJtender and the pace of sue& disposal9 should be stepped up to the maximum possible extent to reduce the accumulation: of ferrous &itp which by the end of 19G1-G2 had reached a level of about 18 months' arising owing to the fact dlat gespite the intensive and sustained drive to re-utilise srrnp for Railways own purposes the pace of 8 . I 35 utiUlisotion had not been able to dtd~up with, leave alone, exccxxl lht pace of arisinlp."* "As a rault of the price control on re-rollable scrap being remaved by the,BIinisuy of Steel in July, 1965, retaining, however, distribution cytr01 restricting dle sale to only re-rollers, a dedsion was taken by tbc Miqistry "of Railways ia consu1t;ltion with thit h.)inhuj. of Stecl and the using interests involved, on a formula by which two-thirds of the arising would be sold to the 'w~istcred'Ke-rollers aurl thr r.cs.it to the 'unrqistered''l r-Iollers."

".I\a icsult ol the lu~.tlw~.~.cprc.scl~tiitio~~ matie I)\ tl~c Ministry ot K;rilwiiy\ to the ;\lini\tr\ of Stecl that sale of ~~--l.oll;~blc:s(.I;\I) ol~ly to rerollers cliil not !ield a suthcient off-take resulti~lgin accumulations of stwk. the Xfinistrv of Stvel apcecl for free sale of Re-rollable scrap to a11 piirtieb." "Since the year 196243 the balance of ferrous crap have jmgressivc- ly ihviridied from 17 months' at the end of 1962-68 to 9 ~nonths'arisings ;ti 111e cntl or 1967-fifi."

"Non-ferrous scraps generated on the Raihvnys J~avc. bee11 broadly classified under the following five headings: ----. .- -. - (ij Bronze scrap lump tjrye of known Accounting"for roughly 40 to jo* composition. (ii) Bronze borings straight type ferrous Accounting for roughly 140/;',* drilling brass drillings. (iii) Boring mixed type (mixed , with Accounting for roughly 15-17%. white metal) (iv) All miscellaneous scrap; and . Accounting for 1~-2o%* (oj Non-ferrous resfdues and foundry Accounting for 5 to 10%. dust. - 0 8 * +Percentage of the total arisjngs .which are of the orde rof 10 to I!; thousands tonnes per year. firom the year 1957 onwards, a ban had been imposed by the W- may iiuavd on disposal of (i) and ' (ii) abwe. The policy ha been to utiliv all thoe uisinp by re.mclting for Rdlwayroovn use iwrr- , ducing the Sbilways requiremmu of virgin metals which have evd, .now, and for the foreweable future, to be imported. As a result of this policy, it hit been pmible to utilix allothe arisinm under thm .two hkadings. The balances, thmfore, ut~dcr these headings are qargi- ,ma1 accounting' for about 1 to 2 months arising rrndcr '(i) and abut 3 to 4 months arising under (ii) .

TJ'ill thc twtl of 19fd) thq policy laid down by thc Millistry had been to retain a snwll reserve of about 3 to 6 months requirements under heatling (iij) to (v) and eispcrw of the rc\t either by outright sale or by conversion contrarts,let out to private industry wherever technically fcasiblc. 'Towards thc end of 1960 Railways were permitted to dispose of their entire holdings under these three headings as by that time the possibilities of reuse hiid been fully explored and exhausted. This policy is even now current."

2.4. During cvidci~cc, thc Committee enquired why the scrap hold- rngs hird brcn progrcssiwly going up, both absolutely and in terms of the total stores balance5. 'I'hc representative of the Ministry stated: "The accumulation of scrap m;ty be looked at from the point of view of arising8 also. Our misings went up from 2.1 lakh metric tons in 1960- 61 to 4.01 Ii~kllmetric tons in 1966-67. During this period, our disp sals have also it~crcasmL In 1961-62, we had 18 months of arising in stock as scrap. '1 his 1~5been retl~~ccdin 1966-67 to l 1 months and in 1967- 68 to 9 months." The ~om;)ittee desired to know thc balances of ferrous scrap at thc end of 196,:-65, 1965-66 and 1966.67 in terms of arising~and in absolutc terms. The representative of the Ministry furnisl~ed the followi~lginformation:

Y e*ar Arisings Rdance Accumulation

.I 963-46 4-081 rkh \I mns 3 -49 lakh M/tons ro months 1966-67 . -1:or lrlkh ?t.l/tons 3.60 lakh Mftons I I months 2.5. 1%~Commiyee ask& for infomation abut tbc number of auctions held for dispsal of scrap-and the quantities ctityosed of in these auctions. The idformation furnished in this regard is tabulated (I * *lotv:

Quuntity disposed of No. of nu- - Year tions held Ferrous and Misc.- scrap a Non-ferrous (value in (in M/tons) lakhs of ruwd 3

2.6. While the C;omrnittee note that the accumulation of scrap is king progressively controlled, they cannot help observing that there has lecn a steady increase in the balances of scrap both alrsolutcly and in ternis of rhe total stores balances. The target set by the Railways in 1963-61' was to briug down the 'holdings' of ferrous amp which constitutes the bulk of the wrap accumuhtions. to six months" 'arisinp' but the balance at the aid of 1967-68 amounted to nine months' arisings. Such an accumulation causes congestion in the yard and also blocks substantial incnme which the Railways could get by its disposal. The Railways should take steps to accelerate the disposal of scrap, aftcr making full utilia~tionfor Railway purposes.

2.7. In view of the shortage of pig iron the Ministry of Railways (Railway Board) had decided, while placing orders for Cast Iron Sleepers on private Aranufacturqs for the year 1964-G5, to restrict the

*i3:oih the qdnnrity dirpmd in the auctiom for - figarcs ale~includt the &on~ through al1o:il:: smrccs in-11 ling thsqaanyiry intern311y uoel !J:J thz R?ilways. ure of pig iron to 75 per ~entof the wcight of slcepen ad use scrap to the cxtcnt of 25 per tent. The wrap was to h rrlpplied frcc by the Railways and whcrc Railway scr,lp was not available the private manu- facturerv HXW to, 11w ttwi~own wrap for whit 11 .I 11 c of RY. 1(H) pcr tonnq wiiu ap;rrcvl Itpoll 0rih.t \ fo~19fi5.Mi M wt- ,tlu~pl*i( cd (I~I 11~ same t~miia.

2.9. 'rhc ,IIisinps of sr 1x1) clui iug I!)(i+(i5 were 1,03,156 ~ori~icsand the balance of G14e I scrap available with the Railways as on 31st March, 19G5 tfut is prior to the placemcni ol orders for 1965-66 was 51.482 tonnes*. But a c~uantity of onl? 27,000 tonne4 was taken into ;ccc.ount for placing the orden 1'01 19Wtiti. l'l~eremaining sleeper., were orctcwxl with man~~facturers'scrap. 'The witi ion regarding the avalla\>ili\~ of more scrap ti~nnearlier assessed was brought to the aotice of he Railway hard in the Iater half of 1965 by which time bulk of t le orders for 1?65-66 were Gnalised with manufacturers' scrap.

*The balances do not tvke into accaunt the scrap the enginwring subordinates of the Railways as the relevant figures are not available. If the quantities pertaining to the central Railways, which arc available, are incluaed the balances wouM be as follows :-

As or :I :- 311-3.1961 A . . . . . 42,596 tonne~. 57,082 tonnes 8 31-31965 ' . . . . . 3 1-3- 1966 . . . . . 65,868tonnes However, the Railwiy krd could finalise tbc remaining orders with Railway scrap, thus utilising a total nf 34.110 tonnes of map on orha placed upto 31s Mad, 1966. 2.10. .As no fresh orders were proposcll for the year 19G667, in- rtl-uc.tions were issued to the Railways in September, 1966 I(:, dispose of two tIii-.~isof sctap :~rcmnulationsbefore December, lW in orden to rcrlitcc tile stores balance. The Grade I wrap available with the Rail- wavr as .m Slst hfarch, I!HiG w;ls 59,068 tonntu: .4bo;t 31,000 tonne8 of Kailwa\ wrap was thcn nurtioned in 1966-67 at rates ran~ingbe- lacen R\.21!1 ;~nrl Ru. 270 per tonne. Even after ;tctding the freight c Il:~rgr\ ;I[ Public. '1';crilf t :ttw u.t~itlitllc K;iilw:ivs 1l;rvc to bear in tlcli- teriny the smtp to tlir Iot~n(ll.iwfrom the wrap depots. the sale value u.c*t~ltl11;tvt. hecn t)e~wec.~~Rs. 230 and Us. 330. that is muell less than K\. 400 1~ IO~IIC which the Kailwayz had to pay for mnnufacturen' it. The rota) q~~;~n~it\of ~n:II~tIh(.tnre~~.~scra~ paid for at the rate oi K*.101) jtcr ~onneagainst IYti!i-Iiti contracts was 27.400 tonnes. The \t r;ry~ ;twilal)le with the K;iilw;tys as on LIlst 3l;irch. 1967. tli;~tis, .~fter rllr ;ttrcfion ol' ~l~ralmve qu:rntity, was 60.8 1 1 tonnes.*

L'. I!!. 'I'Itv 3litti\11.\. of K;tilu.:t\a (Kailwa!. I%oarcl) explained (Feh- I hi;ir\. 1!4G8) th;tt tllc scrilr) :~v;riial~lcas on flst March of any .year cotlit1 11ot hc take11 ;tr bei~~gioitilable for iwle against sleeper contracts of [he c.nsuing year :IS 30 to 40 thai~sandtonncts shotild bet reserved as :I nrit~in~~~rnfor issi~e to the Railway workshops. It was further explained 14.tt thr ;11i4i11p(lurina the course of thc war would normally be .~\;tiIal)lr;rfter the ~nonsoon. [I';ir.;txr.al)l~ So. 1 5, Audit Kept (Railways) 1 %8.] ---- -. ------.------. * l'ne brlrnss d? no: tak: into ac: 1.m the $:rap with the engineerjng subordinates of I !I- 1: dway; as the relevmt rirureo arc not available. It the quantities pertaining to the cc-ttrd Kniiwav. 11 hich are av~ilable,are inrluderi, thc bal.ance9 would he as follows : .\s on :- 31-3-rC)54 . 42,536 to?nes 31-3-125i 57,952 ton?cr I 31-3-19;; . . 65.355 tonncs 3i-3-1957 . 73,451 tonnes 2.13. The Camrnittac enquired 60 what buis the scrap available Zdt supply tD mnvpcmrr war a@, The (Member &qineoring) mud: "The quantity of mag which an hc made available to the aunuficturm of cast iran slecp depends on the quantity available wirh the Wwayr and alra the arisinffr and onsumption in tee rail- w*g w&bbp. Thee three lactom have got to be taken into account behie chc! qla6tity that can be made available to the 'handacturns of atiron sleepers ran t~ decided upon." The position in this re- (ptd was further elaborated as under: <

"Far the purpc of arriving at the total quantity available for hue tn C.I. sleeper matiul'acturen iluring a particular year, the railways generally take into account the total of opening balanccs at the 'commencemcnt of the year and arising ex- . pected during the course of thc next year, less quantity of ecran required for tlwir own use ill railway workchops etc. Since the arising or cast iron saap during the course tfrc war takes placr (luring the ~econd-half of tllc year a9 the renewals mmtly lake place nftrr the monsoons, the railwavs retain cau iron scrap sufficient to Crd the railway workshop etc. for ;about 56 months. 'The I~lanceis advised 10 the Railway I;od for issue to C.I. sleepcr m;~n~rfactulcrr.Alw as the orders for the c..w iron tleepers :Ire pl;rceil early in tlir beginning of the year and scrap i5 ~equirctlto be issued to the C.I. sleeper manufacturers immetlintely after they ttalr cupplying sleepers, the (1.1. map expected to be avnilahlc at . the latter part of the ycar is not taken into account."

2.14. The Committee ~-roit$etl out that the reu trns regarding scrap submitted by the Railways to the Railway Board did not take note of the balance with the engineering subordinates. They were informed that these balances needed "inspection, survey and classification." It was also stated during evidence that "From the time scrap is released and taken out to the station no account can be kept. Only when it is sorted out by the stores department and taken on the books accounts are available. The Railway Board gets the inPormation only when it is taken on the hooks." The Committee winted out that no note at all had heen taken of the balances avhilahle with the engineering sub- onlinates. They enquired whether survey and inspection was in arrears and iI not, why the balances were not reported at all. The Ministry of Railwitys have stated in a note: & ' "7 he position is that the scrap is released from the 'track alT along the line and it is ply after they are erected an& uaintd our that they can be inspected, classified and then 4x transfund to the ssorcs &pots. Till such time as the daaifica- tion is not finaid the entire relead material which may be ccnuphBng of crap and serviceable slnpus is retained by the er(gineering subordinates and since it is not known as to how .much quantityein the released material would finally came out as scrap, it cannot k reported to the stores depot. This ihspec- ,tion0and classificittion has to be camed'out. v2ry'coucfully as* otherwise in the egerness to transfer scnp to the stores, thew should not be chances for serviceable materials getting mixd up.".

"It may, howevci, be mentioned that some tiam is taken in carrying out inspection, survey and c\assification of ,the released material and then in the availability of wagons Eor des- patching the scrap to the stores depot. Thc position is %ame on all the railways. The re-classification of the release& material is a continuous process on the railways ;dit is done as early as possible. No targctq as such are laid down within which the material has to be re-classified after survey and inspection, since the time lag lor inspection and .classification depends upon each locality, the intensity of train services, distance from stores depots etc."

2.15. Taking up thc point mentioned by the witness tllat part of the balances as reported by the Railways had to be earmarked for corisumption in the Railway Workshops, the Committee asked for data about consump tion of C.I. scrap in the Railways. The information furnished in this regard is tabulated below:- . a (Figures in M/Tons) -- Railway 1961-62 1962-63 1963-64 I 964-65 1965-66e

Northern . 4,195 4,685 8,327

Southern . . Not avail- 73594 7930 9MI 7,625. able. South Eastern . Nil ,546 . 63 . 998 Nil- ' TOTAL .* . *2~,271 303973 373315 45,760 ' 36,231 " P

*The quantity utilbed in SOL&& Railway Workshop is not available-.

I 2%. I'bt Committee wcrc 1Lo pmvr'&d with &a about nririnp d balm d scrap every quarter knmn 196162 and 196SU3- Thc data is sununallred blow:- *

Atisiws CloQiiyr Balmccs Year C i- 1st 2nd 3rd 4th 1st 2nd 3rd 4th Qr. Qr, Qr. Ar. Qr. Q. Q:. Qr.

Note: (i) 'I'll~bdances with Central Railway arc not inchded. (ii). *I'Iic hali~ncc~with enginwring s~~bordinatesarc not included.

2.17. '11ie ( :omurittee obscrvc ~h;i(despite the consuri~p~ionOC scrap in the Railwily Workdrop, the 'arbings' were on such a scale that balances of scrap at the end of every quarter profiressivtly increased. Dur- irlff evidence the Committee also pointed out to the representatives of the Rxihvay Rnartl that the data regarcling arisingr did not lxar out thcfr mntention that nrisinp took plare mostlv in the latter half of thc yar. a 2.18. KeEerring to the acr u~n~tlationof scrap, the hfember (Engi- nccring) st;~tetlduring evidenre: "The quantity of scrap with the Rail- ways has ken pi11g up. It is rather unfortunate that we have not been able to dispose of this quantity but we were making an effort to disposc . of it and supply ir .to the manufecturers of cast iron sleepers this year. Last ycar also we supplied larp quantities." The Committee pointed -out that as againtt 36.A21atonne$ available as at the end of 1963-64 and 5 i.d!E? tannes available at 'the end of 4964-65, the Railway bard's estimation of what wwld be available Tor isshe in IW-65 and 1965-66 to . thc contractors was only 22,187 tonnes and 27,000 tonnm respectively. They enquired whv the Railwavs did not increase the quantities for , inoe to contractors' subscauently, in the course of the year. In £act. the rcicumulation of strap the undcr0kstimation of auantities ford the :kailwav Administration to re11 substantial tprntiti& by public-u&&in 43 at rrm ranging hPm Ra. 919 per tame to Rs, !El0 per mm, whm, with wter p.hning, thy muld well have been iaawd ta the conrrrrcto~who were charging the Railways Rs. 400 per mnne Tor use of their (m- u?cm) scrap. The witys explained that in 1964-65 "wc did not anti- cipate cn%ugh arisings. So we allowed the contractors to utilise ,their own &rap." Sg far as 196561i was conctnld, the. witness stated: "We only planilecl for 27,000 tonne but her on we found that we had mare scrap; m, we increased this quantity to 34.000 tonne and later on actually to 44,000 umncs." The Financial Commis4qner (Railways) $tat& in reply to a further question on this pint that "it is it fact" that *%here war not pod enough coordination between rhe Railways' teporting the availability of cast iron wrap i~ntlour irlformatiol~ of their workshat~s requirements. . . . in order to utilise the maximum amount which could I* utilisecl. They (the K:tilw;4g i\ilministration) awere kceping unt8eces- saw law reservm for utilisation in their workshop.. , .U1c are uduly cnutiaus in making the assesment in regard to supply of scrap to them (contractors) . . . .We did not take into account the scrap arisinp dur- in^ the course of the year. . . . Now we are in a better position to know what quantity of scrap will be ;wailable for being given to the manufacturers and we have ken ensuring that there will not be crcmsionr where we have lar~stocks of cast iron wro? with 'us and buy sleepers a higher rate." The Cammittee enquired what preciie steps had been taken to tighten the procedure in the matter of assessment of scrap available for issue to contractors. In a note, the Ministry of Railways have stated that instructions have since been issued (on 14th March, 1969) for "proper coorrli~iation between the Engineering Department, who know the quantity already available with the Engineering subordinaim . . , . . .and the Iikely arisings from the track renewal programmes; the Stores Department, who are aware of the smk available in the Stores Depot and arrangements available for sorting out and making available C.I. scrap to the C.I. sleeper manufacturers as also the Mechanical De- partment who should advise the correct quantity of consumption of C.I. map in the Railway Workshops and for other Railway purposes. The underlying idea was that the Railways "should he more realistic in ab wing the availability of C.I. scrap so that the maximum requirement oE C.I. sleep may be covered on railway &ap basis." 2.19. The Cbmmittee enquired whether it would not facilitate better utilisation of Railway scrap, if the issues to contractors were spread over the period of the contract. The Financial Commissioner (Rail- w;iys) stated that while giving a commitment to contractors for supply, "we are takiqg into account that so mu& stock is available and somt nore will be coming in (during the period of contract) and thercfms we will be able to supply a little mare than what we commit." a' 142 (Aii) U3-4 * 220. in reply to r quedo~r,how cmvrctoje were getting thcir awn map for the ILK of which they wae charging &. ,$OO per tuune and whether they were obtaining tlleir supplia from the Railwnp, who auctioned the bcrap, the Chairman, Railway Roard stat& that this quation did not a~isc. "So far as the Railways art! concerned", he said. "we can definitely ray that before September, 1966, we did not sell the cast iron exccpt on a IMIW Imi~." ''.l.his question ol selling kast irm scrap", he added, "carnc ilrto being only alter pig it on was decontrolled. Before that cast iron scrap wps not being sold."

2.21. The (bmmittee olmethat, due to a failure on tlw part of the Railwayb to utiliw: adequately stock8 of terrorlb mrap available with thhn in tlw fahn'cation of cart iron sleepers, an avoidabie expenditure of over Itu. 1.0 hkhu was sustait(cd by thrm on contracts for thew slcepms placcd in 196445 and 1965.66. The Ions would he even higher if the stocks with the cnginecring sulmrdinate which were nor surveyed and c lansified are takcn into actaunt. The Rnilway Board had themwlves lwen obtaiuing since April. 19fi9, quarterly statcmcnln of fcrrous scrap available with the varioue Railwayb. These very clearly indicated that, due to increasing temp of track renewals, there were subsran rial 'iiriuingb' of sr rap every quarter, which were yrogt~ssivelyaugtncnting the blanccs. The increasing accumulation occurred despite the consumption of scrap in the Rail- way Workshops, which, during the period 1961-62 to 1965-66, ranged from 21,270 tonne6 to 45.760 tonnes. The position in regard to the accumula- \ tion of stocks in fact became so acute that the Railwav Board dica&&tIw ailwys to bring- -._-- dawn thcir stock frzmonths' 'arising' to 6 months' h4 .+r- IS.- I1 is, thcrcforc. ~~aradoxicalthat, in the face ol?lris steady-and mveaccumulation of, scrap, the Railway Board sllould havc Eelt obliged, while aswsaing the quantities of euap available for issue to the contractors, to discount the quantitiec shown as available in the stock retwns, to provide for cotlwmption in the Railway Workshops, or to assume that prospective %risings' in the course of thc year will take place only during the latter part of the year and need not te taken into account. It is also strange that no note was taken by them of the fact that balances with engineering subordinates (which ?re, in fact, still to be ascertained) had not been reported by the Railwoys and that, with expeditious survey and classification, part of these balances could have been utilised for fabrication of the sleepers. As the Financial CommiaPMna (Railways) himeelf 'admitted during evidence there was "not good qough condieation* between the Railway8 and the Railway Board in uaadng the anilabilitv of /'+wllapand utilising "the maximum animdt which could be utfised." The Committee would like the Railway BDud to investigate how chis U and fir overall rgponsibility and dk to'ensure that in fuwe the accU- 'C 0 b ~~ofpq,iDdoaLythe~ritL~a~ di&aqd&h,@Uhrrrtok~rpcd?~yirurr)lcdaMfruegnept~~ potmgrEalFriI- Audit hka&apb SOU; knrrn Railw&~mid.blle expenditure in the removal bf I clam e rpib from the main line . . 0 2.22. The Ministry of Railways (Railway Board) arranged for the import of 1,01,000 tonnes of I class W Ibs 'R' rails under two contracu .concluded ik September, 1960 and Sqpnber,' 1961, with a foreign firm. The rails received under the contract were consigned to the various Rail- ways after the same were duly iti~pectetlby the Director Gemal, India Supply Mission, London. \ ; 2.23. These rails were not to be inspectedhgain after their receipt in India. However, since the relevant inspection certificates could not be produced before the Additional Commissoner for Railway Safety at the time of opening of the track on one of the sections of South Eastern Railway (which had received 20,020 tonnes) the rails were got retested. Rail pieces from three casts failed in the tests prescribed in the specifics. PlriiWffi~rs~rolrtwo casts in the hammer test and rails from the third cast in the hammer test and the falling weight test). 2.24. According to specifications, in the event OE such failure, additional tests of selected rails from the dcfective cast were to be carried out before all the rails from that cast could be rejected. The South Eaa- tern Railway Administration, however, removed 1,974 numbers out of 2,312 numbers (1,295 tonnes) of the I Class rails from the three casts from the main line track and relaid 722 pieces in the sidings, without carrying out the additional tests, illcurring an expenditure of Rs. 1 lakh. Utilisation of these rails in sidings treating them as I1 Class rails meant a further loss of about Rs. 98 thousand. 2.25. No amount could be recovered from the suppliers since, in terms of the relevant contracts, the inspection of India Supply Mission, London was final and conclusive and rejections, if any, could be at sellers' works only. 2.26. The Ministry of Railways stated (October, 1967) that it was net possible to cany out the additional tests since there were no mans of selecting rails for the additioh41 tests in the manner specified. It was further stated that since there was no report from other Railways of any of these rails having failed in the track even after the( expiry of guarantee period of 5 years, the India Supply Mibsion, London mald mot be held rcsponsib?e for any lapse by way of iinptoper inspection. 2.27. epparently the action of the South Eastern Railway Adtpinis- tration in removing the raih involving an expenditure of Rs. I:W ~akh was not justifled; (Paragraph. No. 14-Audit Report (Railways), 1- 2.28. Thc Committee enquired whither, after the failure of the rails in tests carrid out in South Eastern Railway, thehdia Supply Mission, hndor~was aclclr ~s~uclto aa

2.20. 'l'llc Committee were ;~lcoinformed th;~t,"accortling to the Gua- rarictbc C;J;it~rc (in the contract) the Sellers were responsible for anv con- cc;tlrtl deft~trinrl)utable to manufacture not detected upon i~creptanre at the Works for ;I period of 5 years and that too, if dirti~iptlrir jwriod thr rolls hot1 Ocrn n4hrfrawn from smv~c-couting to ans h~rtrhn,gror dc- fwt. S~~ICC*in this case neither any breakage or defect was noticed afrer the r'iils had been laid in the track, thc defects found during the tests cwriecl out did not make the suppliers liable for nny compenwtion. In the ri~~~i~nstanccsthe matter did not warrant any rc-lrreim being made to the suppliers." 2.30. 1)ul ing evidcncc, the representative of the Ministry informed the Committee that all the tests prescribed in the specifications were conducted by the India Supply Vission, Lontlon and Chemical analysis of rail pieces was illso done. Inereply to a question why the rails failed in the tests mnductcd in India, the representative of the Director General, Supplies and Disposals stated: "Only three pieces failed in test in India. Further quantities should have been drawn for tests, that is the condition of the specification. If the Railwav Board had drawn some more samples and tested them; they would have found the results rather good." Further elaborating the position, the witness stated: "I would submit that the test specifications are so stringent that a slight failure of the rails does not necessarily mean that t;eerails are defective. If any defect is noticed in the test,; they must draw twice the number of samples again from the same cast for further testing. A freak can take place; so we have to try twice the number from the same heat and carry out the same tests on them, If xhere is no failure then *e are satisfied that it ws a freak test result. . . . The persons who took this decision to change werh merely by their intuition of safety considerations. ~hefwere not experts. The certificates given by the testing authorities in the test houses were not qaestioned; if they had been questioned, they would 0 47 0 'have give11 full detail& information and that would have satisfied the Railway Board." 2.31. The reprcn&tiva of the Railwar Borrd, who war asked whether the Railways also thougl~tthat thc rails were pxl. said that *'it was not nccaury to have tested the rails again." After all the rails had hcci~re\tecl earlier in 'the rolling mi119 ;~utl11:1i1 ken found to bc satis- far tory. I. therefore. see no reason why ;trythinp; sl10111tlhave he& dont." he Cmmnfitee rl~cnriqoiml rl~cthr~the daiiion to' teit the mils and have tllcnl transfcrrctl at a cost of Rs 1.98 lakhs was an unfortunate de- ci4o1i. 'l'hr witneb> rcpliecl ill the affim~ativeartcl sirid it was a "vety un- forti~nated&ision." 5 2.32. .'l'he Committee tlesiretl to know whethcr any 1cg;ll opinion was titken over the clilestiun whether the guarantee i~lauscicc.o~lcl be i~lvokrtl in view of the failure of the rails in the tcstb The witness patecl: "There llas been iio failure of the rails as siicl~." Jt was added: "No Icpl opinion \vn\ taken. In the first instit~ic.~,the lweac.l1 of colltrat.t II;IS t~tttaker! place for he siluple reason that the rails ditl uot it. Il'hetd'orc, the ques~ioi~of consi~lti~~glaw tlitl not a-ise. krilwa) tot~k;1 cx-rtain ;Itnollnt. .of caution on their ow11 initiative and the contractor w;~stmt rcspanai- hlr l'or that." 2.33. Tlw Committce enquired whether it was not necessary for the Millistry to satisfy themselves ill the interests of safety that illc rails tlespatclied to other railways were not defective. 'l'hc representative of the Railway Board stated: "Even the rails ~~scclby South 1:irstern Railway werc not defective in our opinion and it was not nec:eswry to take those wils off the track." He aclded: "\\'hen wr open a new line for passenger traliic, the Covert~nlent inspector is supposed to come ant1 inspec~t tlw .section bel'orr it is declared open. Nothing was fowd wrong with the rails but when he came to inspect he rajsetl the clt~estion of seeing the test certificates. As a routine, test certitic~esarc recjitiretl to he protlucetl. -4t that time the Railwavs ditl not have the certificatcs. . . .The certifi- rates were received but they werc lying in the Hoard's oflice, and in the .office of the Central Railway (which was the (:learing Railway for these rails). Unfortunately South Easter11 Railw;av did not ask for these certi- t~cates...... Instead of asking for ccrtific.atcs. from (ISM) 1,ondon or Central Railway, he .(the official co~~c~ernetl)took the decision of changing the rails ...... It was unfortunate; it was a wrong judgement." 2.34. In a note which was &!,sequently submitretl to the Committee, The Ministry have stated: "A copy each of the insprction certificates was sent by the India Supply Mission, London to the Ministry of Railways and the clearing Railway immediatcl!~ after the rails were l?adetl o? the ships and were received jn 1961. . Because of the large number of inspection certificates involved, the clearing Railways coi~ldnot, make available the correct certificatcs to 0 the SO^ gabtern Railway. South Eastern Kailnry was not aware that ccpiea of the certificate are also available in the Railway Board's office." C 2.35. The Cmmmittee notc that certain rails laid by the South Eastern Railway on the main lines which in the opinion of the Railways "we sot defective" were rcmovcd to a aiding prior to the cc~mmissionCagof the liner. Thb became necessary, as the inspection &tificates in wpeCt of tbuclc raik "which were .lying in the (Railway) Boarrl'b ofkr; and also gn tbc &c of: the

2.35. 'l'lrc l~iat~,la)oui, equil~incntrtc., OC the plant were finaIist.tl in COII~L~I~I~IIwill1 111e Aliuisu) ol' Railways (Railway Hoard) . However, slcepers supplied by rlw Strc.1 Plicnt contained dcrrcts ;ind deviations irotn l~uniissiblr talctxr~r~es& CI I in the hl)ecifir.;~tions. The main defects ittrtl tlcvi;riior~swcrc (i) depression for.mctl from tht: impression of the pnncliiug dies which rcdi~ced die bearil~g;)Yea of the nil seat an3 the kc) drive, (ii) bum arou~ldtIic holcs, atid (iii) verticality of the punchecl Itolcs. 'Ihcsc tlcfcris were attributed to the sleeper press and die design of dies adopt11 by the Plant as also due to the process of pro- hcir~gslecpers by siniultaneotts forming and punching.

2.38. l'hc process ;rud tlk equipmci;t*l~avenot so lar bccn inodifiedl

It was also it~di(~teil10 the Comniittee that it1 respect of the 2.5,000 de- lei tivc sleej)crb wppliecl to the Nortllern Railway, compensation tiad been claimrtl From Hiirtlstari Steel. As the Plant Authorities had not respond- ed to "scvcral lcttcn". actiori "is now being taken to deduct the amount ol'rectuctio~i Iron1 Hintlustan Steels' ducs ill respect of present supplies." 2.46. 111 rmponse to a *estion how such a large number of sleepers irlitially segregatect as sub-statiilard were later found acceptable and on what basis the Railways came to the coriclusion that the iiiitial segrega- tion was based on a cursory i~iq~ection,the Financial Chmmissioner, Rail- ways, stated: "What happe~~edwas when the first lot ...... on the Nor- thern Railway were reported to be defective there was joint inspection simultaneously. Other railways were also itlerted ...... and to check up wl~ether siniila~ defective sleepers of Durgapur had been supplied. The othc-r Railways started inspecticn and that is where cursoriness of the inspectioil came in because that inspection was done at the suhrdi- nate level. They became a bit cautious and they just segregated the sua- pected sleelxrs. Later tm when ci~refulinspection took place it was found that they were not so much defective." 6 , 2.47. pointing out thit the lot iqqdied to the Nather~Railvayvu dund to be defective and that the joint report of inspection on tbac * E clccpen artlcdl out in April, 1966 mfcrrecl to absence of impion harks an of the akptvs, the Committee enquired how the detects cwaped the notice of the impemtars of the Dircc-tw Gcncl-d, Supplies and Disp .=Is. 'I'lie rcpmmtativc of the Director General, Supplies adDispos;rls .~tatd:"011 that mitttcr we have still got a doubt lmause when the joint iaqwctiori %as held it psnot proved whether the slccpcrs found defee- five dte actually iri\pec.tul by us." He further stated: "In theprocess etjnspcction, I have got the figure for 4 to 5 y~iirs-thew. have been 12 per cent., 9 per cent., 10 per cent and 16 per tent rejkcts. 11 would well Ix that the Durppur might have ken sending tlicve rejm tu. 1 wtl111d not blame them lor ally misthief. Besides. in the year I!W?-63 these defects were being pcnnitted as a special caw.. It is quite Likely that sleepers whicli belonged to tliat lot might have got.mixct1 into the combined lot. It is very difficult to establish the identitv." It) a note on this point submitted to the Committet, the Departo~entof \trrl have stutd: "Every sleeper inspectctl and passed by the-131 (Met) is marked with acceptance stamp which is in green pint and slecpcrs whir11 arc rejected .;we markccl with red pint.

At this paint ot time, it is tlifficult to dearly indicate what led to the above situation and, therefore, an invcstigatio~~is not possible. However, it has been ascertained both from DSP and Railways that only inspected sleepers were despatched and also tlra t these i~ry)ected sleepers ditl bear the inspection mark of acceptatw ant1 were received as such by the Railways. The Joint Committee Inspection was carried out alter more than it year of the receipt of these ~leepersby tlic Railwayr. It is not unlikely t11at these marks may have got obliteratctl hecause of exposure to sun and rains."

2.48. The Committee enquired whether the acceptance of the defective sleepers supplietl to the Northern Rdlway would not jeoprdise the safety of the travelling public. Tlir Member (Engineering) replied: "There is no risk of accidents. The only thing iq that we will not be able to get die correct gauge." Asked where these sleepers were proposed to be used, the witness told the Committee that "they are going to be -used on goods line, on which passenger tr~inndo'not run." He added: "I would not mind using even on lines where the trains are not running at high speed. The onIy defect is about .the gauge." The Chnmittce pointed out that the opinion of ;hp Research and neaign Organisation was (that with the use of these sleepers, there was a po~sibilitvof keys getting twse and dropping out from the rail under moving trains. The additional Member (works) clarifying the position informed the Committee: a "If the keys are driven to get the correct gauge in. the case of defective :sleepers )hen .the keys may not be tight. Rut if the gauge coqIda@ slightly out, about two or three millimetrc, then the keys will be tight. ' Zkotcir why they can be uwd on ,secondary linca where the puge had nat be cxaa." I 2.49. The Committee enquired whctber there was 'any proposal to purchase a further lot of 130 lakh numbers of rejected sleepers from Durgaput Plant which had accumulated there. The Committee ypre in- fonncd'that the accumulation of this lot was "due to inspection being tightened up." The Railways had placed a contract for these rleepers reducing the rate by Rs. 195 per metric ton and supplies had started. "We are trying", the Member (Engineering) explained, "GO change the designing of 'the sleepers. We thought we would carry out this change with thew rejected sleepers."

2.50. Twng up the pe formanie of the sleeper Plant, the Committee asked for data about th 2production of sleepers in the Plant and the rejectidns that occurred and the losses sustained. The Committee were informed that the total investment in the Plant upto 3lst March, 1968 amounted to Ra. 63.39 lakhs. The rated capacity of the Plant at 1 MT and 1.6 M.T. stage amounted to 60,000 tonnes and 75,000 tonnes respectively. The output and percentage of rejections were as under:- -_. -_.___-..--. -- --- Percentage of Production rejections on Year (Tones) productions

Dy. Dir. Works Inspection Inspection Lm Rs. in wf -.------. .- - --- .------..A- - -.------r g6~-82 - 8 .a3 1-43 - . 24.g 1~3-4 4'3.14 - w4-65 96 30 - 1965-66 70.20 - 1966-67 - 34.73 r 967-68 - 56.19 -.------2.51. In reply to a question, the Finanriid ~%miuioner (kailwnyn) stated that the installed capacity of the Durgapur Plant "is more than what they are producing at present." The Corrimittee of Enquiry on Durgaptir Steel Plant, which had cxamined the working ot the plant, came to the conclusion that "the Plant has hardly sufficient orders from the Railways even for two-shift working." The Committee desired to know the reasons for the decline in production in the Plant from 68,662 tonnes in 1965-66 to 55,407 tonnes in 1966-67. The representative of the Department of Iron and Steel stated: "I would like to explain that the reason for the fall in production is not primarily corinectecl with the production aspect as much as the inspection aspect. The Inspection Directorate of the Director General, Supplies and Disposals were ~rnableto carry out the inspection of the large quantities which would be there if three shifts were functioning. Therefore they had to slow the tempo of prdaction." 2.52. The Committee were further informe$ that "On the basis of the joint investigation into the defects of the sleepers by the Director Gene- ral, Supplies and Disposals, the Railways and the Plant, some control was exercised on the inspection of sleepers. As a result of that it was not possible to inspect the entire lot of three shift production during day light hours. We had in the meantime accumulation of stocks which would be moved outside and the area cleared. TherCfore, we had no other alternative in the month of August: 1966 except to revert back to two shift obations." 253. The Committee enquired about the loss sustained as a result of the plant being put ir)to two shift operations. They were informed that the loss in this respect had been estimated as. "about Rs. 6 lakhs upto March, 19$8.'; ,In reply to a question whether ipspection arrangements, could nbt bf: made for the entire production expected out of Ge-shift 0. 54 ~acims,the Delwrtrncnt of Stcef henatml: "S!cqms art inspected by rcpresentativcs of tlirtc tor Ckncral, Supplies and Disposals during day- Aigltc hours as prm rihcd in the speificltions. 'The question of night ins pcctiun haw bccn taken up with Director Cjmeral, Supplies and ~b~or;rb' at1 nmny occa,ionb, but ;I 5 xcording to thm~the ywri tications themselves yr~~ritwinspertion rluring daylight hours, it has not been pibk to %heir vgrcct~~entto irrymtio~~l~yond rllcsc I~ours." t 2.54. '1'11~~;bn~n~ittee enquired why the percentage of rejections hod &en going 1111 instead oC c,oming down. '1'1~wi~ncss stated: "My im- ,premiion i9 that thc perc~enta~eto1 rejection is cmning down and in August it Itas c VIIIC clown LO 7.9. 'I'he other cjuwtion that would arise is why .ilw ~~cr.c,cnt;cficof rejection was not lowered even earlier. 'l'he explana- I is ts It was on acwunl ol' the yrt~cssir~wlvecl in tl~cn~anufac- ruw ~JLsk*cj~ers in thiy .both the pressi~~y:a~ltl ~n.~ndiing arc rkmc simul- ~an,eo~~sly.The tiefec?~whid~ were pointed out regarding verticality and depression were sorilething which could be rectifieti with (,onstant attention and thus we have been able to rectify and reciuc.e the percentage." 2.55. '1'hc Cbmmittee drew the attention of the Departnient ot Steel to the nlnerva 1ions of the C-hmn~itlee of Enquiry on Diwgaptlr Steel Plant (IDandcy Corumittce) in para 11.29 that "the rejections arising out of pressing ar~rl~mwhing coi~ld be greatly n~inimiscd by proper checks during ol)erntion. proper n~aintenanceof the Plant ant1 especially the dies nrd puachirig rods and preshcs and by in~p-ovingp~.ocluc.tion icc.hni- ~ues." 'I'he Depart~nenthave stated in a note: "Para 11.29 of the Kcport of the Cornnlittce of Enquiry on the Durga- pur Steel Plant rcferh to iail>liovements on production techniques and other factors like inrprovenlcnt in maintenance and revised bonus scheme. Certain steps have been taken and the results ol these are reflected in the perforrnmt:e as js eviclent%rorn the percentage of rejections which has been coming c16wn:

April, 1966 to 'hiarch, 1967 April, 1967 to hiarch; I968 April, 1968 May, 19611 0 June, 1968 July, 1968 August, 1968 t

' 2.56. The Committee enquired when the defects in thd sleepers were Srst noticed and what action wag takp to remove the defects: Tke s Y Dqwm~ntham replied in a note: *There anthings like die deprwrioa .burn vound holn.~tc.did are inherent in the manufacturing pr- Me first complaint irom the Railways about deepen received by thorn not king upta specihations was received some time in September, 1965. The rnatecr was conjointly inspected by D.I. (Met), Railways and the P1ant.representatives in April, 1966. To the extent the defects art inherent in

2.5!) Thc witnrw further stated that "Only last year we were looking into thc rpatccr whether we coultl change the design of the sleeper. We looknl jnintl! with ~fldustan Steel, but unhwtunatdy we have not been ablt to rorncl to greed soll~tinrlsso far."

2 60 'l'llr C;omniittee enqui~ecl whet her if the Plant Authorities were ~~r~;il)le10 cvcc t the change in tlcsign, thc~Railways proposed to continue :it t c])I~ng\I(*PI)us 01 the existing design. The Member (Engineering) uici:. "Mrc ~ho~~ghtwe could ask the Ihrgapur Steel Plant to produce ii slight lv tliffcrrn~type of sleeper. Firstly, they expressed their inability to do w. Rut lor the present we have got second-hand sleepers which wc artApiny: to use' :rnd after that we will Irquest them again to modify their P1;int."

2.61. I:.xplaining the position in regard to the changes in design, the wpresentative of the Department of Steel stated that "this new design which is being contemplate$ will completely change the processing operation and we will have to i1ae a different layout." In a note, it has been stated: "'Certain changes in design of sleepers were suggested by the Railways and this matter has been under consideration by the Durgapur Steel Plant along with the Railways, but it has been found that with the existing sleeper plant, it will not be possible to make any changes." 2.62. The Corn~nittee enquired whether the Railways were quite satisfied . that the sleepers procured from Dur~apurwere quite saf= from operational pint of view. The Ma- bers (Eltpineering) replied: "This' matter has been carefully considered and it was found that these sleepers were quite safe for use in the track." He added: "The defect is not of such a serious nature that we cannot use them. The finish .is not ve3 good. We would like .them to improve the finish. We have tightened up thf inspection. Lately, we have been getting satisfactory sleepers." The Financial Commissioner (Railways) further eplaining the position stated: "Whnt we are aoing in regard to the ddective sleepers. lying dth the Dugapur is that y~tan: purChasing them at a reduced price and apply to them Jwtic fatstenas With these modifications we arc able *to try out these stceyers." In reply to a question whether the ex& nmt of using elastic fasteners has proved snccessful, the l@embet (Engi*cring) stated that the Railways had used them "iu short length6" and ,"found them good.". More trials yere in progrm.

4.63. The Committee drcw attention to para 11.27 of the Pandey Committee wort in which there was a reference to a proposed study "of the behaviour of the track with additional iolerances in tilt proposed at Durgapur to decide the extent to which further relaxation (in specifications) could be agreed to." The Dep~rtmentof Steel it1 a note on this point 11,1\vstated: "1,511 sleeper2 with relaxed tolerance wcre selectcd by the Railways for experimenhl purposec. These ex- perinwnt5 are still being carried out anti it is expected that rcsuI"t9 will bc known soxnc time after April, 1969."

2.64. The Committee cnquired whether in view of the unsatiafac- tory supply from Durgapur the Railways had considered the desirea- hility of obtaining sleepers from the private sector. The Member (Enqineering) stated that "If Durgapur is not able to meet our re- q~~irementswe will do that. Our requirement is 10 lakh sleepers a I Unless the Durgapur plant can raise their production to meet ou~~t*quirements in full, we will have to think of the other alternative. flavir~ginvested all this money in the public sector plant, we have to cnns'idcr whether their capacity is being fully utilised before we buy then1 from the private sector." The representative of the Department of Steel clarifying the position told the Camnittee: "It is not the case that the entire 100 per cent production d the plant was bad. It is a case where out of 100 per cent production 98 per cent was good and the sleepers were purchased after carrying out the inspections. Pro- bably 7 per cent was rejected. To the extent they can make Ube df that with some additional expenditure, an atempt is being made rather than allowing the whdle thing to go waste. I thou'p;ht I might mention this." Elaborating the positiori from the point of view of the RaiE ways, the Financial Commissioner (Railways) stated: "Our onlv sanrce of suppIv has been Durgapur Steel Plant. They are also unable t6 meet our full requirements and if it came to nur havinp to nromote the sleepen in the private sector we may take that up but at that stage we would naturdly have to consider what would be the materid ~~qiiired:what is the available ihvestment in the Grivate sector, ,what further in&sti$ent may become necessary there and in Durgapur piant: whether to &a6& the desib. or to insist on new desid. All these hatters lidtie to bk wfie ihto and natura~lvwe wit1 prifer to ch:hd* 0 b that lonn ol itjvmmcat which will give us rauIu. The dttpaal a*ani~rntPunha not yet taken place." In qly to &,funhaqwrdwr, tetc Fin;rrrcirl Cdmitwioncr (hilwayr) ruttd: 'We are going in for con. ate sly~rsand that is going to mPlu: a difference in total muire merrts .of steel sleepers." 2.65. The Committee obbe'rve that the Railway Acclt.lenu Inquiry Corunlittee (1908) which teviewecl the problem of use of concrete deep crs matte the following (>bycrviltion$ in thir rqilrll in Part I of their Rej'ort: ', :

"We ~nrlcrbttt~ttlthat prestrcsserl concrete sleepers have been da vcioped in forci~nro~~t~tric\ and :~clol~t~cl~xte~isively. \Ye arc unable to appreciate tfle reasons f.rr thc Administrations' inability to develop the concrete sleepen to wit railwtw' special rccjuircmen ts over the last many yc;m . . . . Wc urge tlir R.~il~ayadministrationr to make special cRorrn for inirml~tci~~gthe ~)resrre~sedconrrete sleepers on the Indian Rnilwnya on an extensive scale in view of the unfavourable supply position 01 wooden sleepers and rhrir inmasing demand for modem rignalling."

2.66. The views of the Ministry of Railways on the foregoing oh- servafion as brotrfit out in one of the documents presented along with the Railway Rudjiet, 1968.69 are reproduced below:

"The intrdwtit-in of mncretr deepen on the Indian Rail- ways has been delayed dur ro nonavailability of elastic fastenings in this countrv. In 1964, a rontract was awarded for manufacture and rupply of concrete deepen with elastic fittings, to an Indian company which entered into collahrakn with a French firm. Unfortunately the I~tdiancompany failed and there was no supply of concrete sltepers or elnstk fastenings. The Railweb Board have since decided to use Panclrnl clips which are used extensively on the British Railways. A rontract has now been awarded to a private campany for its manufacture in India. The R.D.S.0. also has a desim u~derdevelopment for a two- block sleeper with elastic fasteninp. With the finalisation of arranp. men& af supply of elastic 'fastenings, L contract has been awarded for the manufacture of me lakh rn-block concrete sleepers to a re- puted company. Tendm for further supply of concrete sleepers an also in hand. It is expected that introduction of concrete slq~n Indinn Railways will now be possible." t

* 2.67. The Committee are not happy about the pdmr~~eca£ the Duxepp~~Setper Plant in the matter of the sopply of akpcm to tbe mpOut of 8 lot of 4.94 Iakh nambb 04 ilapaa wpplEsd behrcm * i I . Tbc Plant ipwitably ran into heavy weather aa a result of rhe yroduc- aha ofswb a lilrgc number of whYtan

2.68. The Committee note thc view rxprcwd duri~~goidencc &at thae are some "inherent dcfc~ts"in the procers of manufacture crf sleqr em The C.ommittw wnnot, ho~vcvt~,avoid tl~c.~~htlusion illat perhap che Railwa\\ a1.w tanr~otcw.~pc Iroln son11 ~JIL 01 11" ~~pud,ility.lor thb state of affairs sint c the) hail arccytd tfw p occsu of bimultanc~us pressing and punching which gnvt riw to thtw "dclccts". The Railways have on this irccount akcd for a change i~rthe dt.hign of tlrc slrry~rs,but tbis weuld require a complete (lunge in tile prt~cmuinguperatiom and .ic Layout, entailing subtantial capital in\estmcnt. Thc Committcy are dleto understand wtq the process of operation adopted by the Plant ibPa produced such uwtisCactory mulu whcu it har, btwl world su- dully in other countries. This suggests that either thc prewer plant and she dicw an: deftsctive or that thye are not king properly maintained or .qpcntcd. The matter needs cloae invcvtigation by Government. 2-69. A development which is likely to have repmcu.wion9 on the ecq- aranics of the Plant is the propmwl of the Railways to go in for yrcstrd umcrete dacpera The Committee note in th? rerpect that the Railway Anidents Enquiry Cammittee (1968) bvc in Part I of thcir Report urged 8kRailway Administration to make a special efforts to introduce concrete 4epcm on an cxtenrsivc scale and that these sleepers haw bcen found .rrry ouitabl for purpics of track circuiting adautomatic &palling, Modanisation of signaning arrangements on the Railways will require rr of prwfened concrete sleepers on a psrosressively inawing BCPIC. Gaious consideration, thacfote, ncds to be given- to the adverd~?implb of the development on the daaand for 51-s of tbe type produd By the Dwgapur Plant and the economic working of the Plant. ' Non-utilisation of fish plates imported at higher rater

Audit Paragraph # 2.70. Global tenders were invited in June, I%:! for the import of * 12,!%0 tomes of fish plat& of 105 Ibs., 90 bs., and 60 b.soctiona 942 (Aii) IS-3 0 2.71. The! lowat otfa received in rapbne to the global lenders wii$ froa\ a Japan- brm for ib. 916 per tonne. "This der rould~not,how- mr, he avai1,ed ot owing to non-availability of 'Ytn' credit. As pnance from U.S. na-project loan done was then available, an otArr lor tl~c import of 12,500 tonncr was pld in Nowmbcr, 1962. or1 the only U.S. firm who mpnded to the global tender, at 8 high r;ttc of Rs. 1,330 per tome (landcrl wt). No rrbcclessrnct1t of requit etncnts with ;I view to restrictit18 the quantity was made. Import of ;~noiher 4,000 tonnes was. however, suboequentlv arranged with the same Japnncbe firm in Aumst, 1963 when 'Yeti' crcdit kame available at the s.tmc rate of R6. 916 per tonne. Full supplv from the U.S. firm rnaicrialiwd by June. 1963 and that from the Japancw firm bv Marrll, 1964.

2.72. At thc time of at~;~~igingthe imports, tlic: recpirements of fi9h plate5 were adat 32,509 tonne on the- basic of 9.29 lakh tonneb of raik .:~lreadymeivml or eupcctclt to hc rcceived during 196243. Out of the 9.29 Iakh tonncs of rails planned 8.80 lnkh tonne3 of rail9 1verc. actuallv rmivetl by Scptvmhcr. 1M)fi.S(the rcceipts up to 3larc.11. IW3 I~cing d.09 lakh tonncr) .

2.73. Thus, while alnlast the full quantity of rails were received by the time the imported fish plates arrived, the fidl plates were not fully utilised. During I%3-(ii only a quantity of 7,702 tonr~esof fish plates out of 12,625 tonne actually rcc-eivcd from the U.S. firm was utiliseul. A further quantity of 2.Yfi7 tonnes was utilised in 19GI-65 leaving :t balance of 2.556 tanncs to be utilised subsequently.

2.74. The non-utilisxtion of fish plates was partly due to underas- wssment of the indigenous capacity for production. In order to step up the indigenous pyiuction of fish plates the Ministry of Railways and Lht Iron and Steel Contml'ler had arrrnpxt for the import of 22.000 tonnes of fish plate quality billets lfor being supplied to the indigenom re-rollers. These billets, were also actually received by October. 1962. However, while assessing the cap6t:itv of indigenous production, a receipt of onlv 7,032 tonnes of tish plates during 1962-63 was taken into account. Ihe actual receipts from indigenous production during 1962- 63 was 10,405 or 3.373 tonne more than antkipated.

@ 2.75. The import of fish plates from the U.S. firm coy,ld have been mtricted to the quantity that was immcdiatdy required by 1963-64, and thc hiancc unngpi through irnportv from the Jopanm~fim %hat Yen' credit ktomc availabk. Ewn r curtailment of 2,556 mncs (the quantity of fish p1att.s mamining unutilisld by the end of 1964-8) in +e iqon woulb have avoided ;m extra expenditure of R5. 10.6 lakb apart from saving foreign cxch;~ngr to the cxrcrrt of Rs. 2'6 lakhs.

2.76.. The Ministr). & Railways rtrterl (Frlrwr), 1968) thnr since it wpnot knopn at tht time of placement of contract on the U.S. tirnr to wkthcr 'Yea' cwrlit would be available subculLently durirq the muw of next war, the tmtire requim~entof 12,500 totrnts had bccn placed on the 1I.S. fin3 and the qut%tion of u.;tsscsmcnt trl' ~~crpirr- mcnts did not arise. 2.77. The Ministry fwrhcr \r;~tcd that tile cntirr qu.tntity of im- p)~rc(ifish platm could not tw rrtiliscd in view of nlort-, indigcnm~s procl:wtion than expec.tci1 and Icy, receipt of r&.

[Pal naraph So. Ii-.Aidit Repm (Rnilwa!~), IWRJ.

2.78. The Conlnrittce enquirc.il wlwthcr the Railwins cc~nsidt-red the desirabilit! of rcstrirting thc ortlcrs p1;icc.d oil the 1T.S. firm, whocr rates wcre higher than thoce quoted by the Japanese firm. Thc. witnew stated that the Railwnss' rtyuirernents wvrt' "mwh higher", br~t"irnphrt was limited to 12.500 tnntlcr. It wa\ eviclcwti) IIOI possi1)lc to rt.\trict it $till furthn."

2.79. 7'11~Cninmittcc enquirtd 011 wli.tt barn the recluirenicnts of fish plattr were worked out, when thc ortlerr were pl,~cetl with the 17. S. fill11 in Ortnbr, IWX The Committee wcrcl told that the rccjuircmcnt was a- seswci "on the basis of rails received or tbxpcctcxl to he rcceived in 1962-63." Thc total quantity of rails of 105 Ihs.. !MI Ihr.. :inti 60 lbs. sections received or c.ulwctc[l to lw received was 9.29 lakhs thtines as shown below:

105 Ibs. rfl lhs. 60 lbs. Total

Rails received I 951-62 ~1,335 3,3%828 ' 53,444 ~3,697

------For the rails received or expected to be reccivccl as above, the fish plates required were assessed 32,503 tons.. The quantity of fish platm received Frcm~ indigenous sources was 2,182 tons in 1961-62 and 2,032 tons upto. October, t!&2 in 1M2-63. A huther quantity of 5,000 tons was expeted durihg the raidual portion of 1962-63 making a total of 9.214 tons &mll indig~nousswnas. against thc tot;tl.rquircmmt of 32.503. There wzs, theretore, a Mcicncy of 25, I'R!] tons against wMt11 the nrckr\ were pfac- ed with the U,S. firm only for 12.500 tom.

2.80. The Chnmittee cvrcpired what qu:inti\y of rails w;h artually receive& and how it cornpareti with eipertations ul~o

2.81. 'l'llc Cixnmittec cnqui~cdwlret11t.r any :rctioi~was taken I)y Gov- ernmcnt tor beli~tcdsuppl! of r;rils bt tho sitpldier. 111 ;I note, the Depan- ment have slatcd:

"Sinct: no conlrilcts arc placed for the receipt of rails from indi- ~enous,wurccs and no production was plitn~~~rlby the Iron and stwl Contyllcr for supply to the railways who were the only consumer of the rails, no action was powible against the supplier. In respect of import for which contracts were placed. necrssary action for tlw delavcd supplies h;ld been taken in terms of the contract conditions."

2.82. The Committee enquired on drat basis tllc quantum of fish plata likely to be indiKe&sly available was assessed. They pointed out in this cor~nectionthat the import of 22.000 tomes of billets had Imn spedfi- call!, arranged for supply 'to indigenous re-rollers for augmenting production. The Committee were informed that out of 22,000 tonnes of billets. 18, 0 tonnes of fish plates were expected. The witness further stated: "During 1961-62, the indigenous supply was 2,182 tonnes of fish plates. From 1-442 to 1-1042 it was 2.082 tonnes. Evcn then we expected that the indigenous si~pplywill be about' 7.000 tonnes during the year. It was ' too much to expect that they will manufacture more than ohat." He further added: "Althoiigh import of billets had been arranged, it would take c I some time tor the maryrfacturexo to get gerrcxl to yruci\rchn. put the . 'manufac~urin~operation into proper sequence and increilse production ourf fold M7e thought they will go to 7,000 from 2,000. We could Ilot expert that they will go much above that." b )?.83. The Camnittee pointed out that the billets impptd for ;upply to re-rollers wefe actually received in 1962. They eriquired whether a programme for production of fishplates front these billets was actually drawn up. I've Ministry of Railways have stated in a note: As the fishplates as well as the fwhplate quality billets werh controlled commodities at that time, the programme of indigcnoub , production was maintained by the Iron and Stcel Controller without reference to the Railway Board. Whatever quantity of billets had been importcd by the Railway Roard was by arrangement with the Iron and St4 ~okroller.The aIlatment and diw ihrtinn of thc entirc 22,000 icmncs anlor~g~~11c fisilplatt! re- rollers was controlled by the Iron and Steel Controller." The Committee enquired whether the Railway ascertained from the indigenous re-rollers what quantity of fishplate., they would be able to supply. The witnew replied in the negative. The Committee pointed out that the actual receipt of fishplates from indigenous sources was higher than what the Railways had estimated. The witness replied: "We can only assume that because the billets became available the manufacturers took special step and they were able to increase their production." 2.84. The Committee enquired when uxnctly the imported fish plates were utilised. The following statement was in this connection furnished:

Quantity of fishplates Quantity of fish latw utilised out uf the utilised out oP the Year supplies made by M/s. supplies made by MIS. Erba Corporation of Kinoshita & Co. of U.S.A. Japan

Total . . 12,625 n 4014 9, 2.85. 'fbc Committee mnat bdp fcdiag &at t& Rujp .raid.Mt cxpcaditure d Rr 10.6 lalbs h this ar by failing to rrmfj

their ordar for irnponcd fish-plata to thcir ' +dtu fquirQHnu The were pmurcd for meeting vtrquircrnen~ in COD- ncrtim with track rmcwalr, but an usarm~ntwas not made bdm pLc- in8 the ordm to whether the supplies of mila were likdy to rp&llt in time. Tbc rcpnwntrtive of the Railway Board hima admitted in thb respect during evidmcc that the firh plates wmprocurd "irrtupcctirc d whether the rails amid tw. udirnmediatcly or a tit& later." Apuc from this, the Railways aln failed to ammu thc extent to which their fi quircmcntr of fish plates wcrc likely to he mct from indigenous sources. Amgcmeou had in fact 1m.a made helm thc orders for imported huh plater were placed for 22.0 tonnc3 of billc*ts being irnjmrtcvl for augmenting indigenous production of firh plate. However, the Railwap failed to aaccnain thr programme dnwn up by the Iron and Steel Cm- troller for the utilimtion of tlww biilcth and to restrict their purchaaco of imprtd fish plates co~.rcupnclinp;ly. The ovcrall result of these omk I dons war that, of 12,rm tonncu of fib plates irnprtd as an ur~<.ntrequire rncnt .in Junr, lW3, ovvr a sixth (2,556 tonneo) rcmaind wruti1i.d till the end of JWCUi5, due either to railh not kming available or to indi- l~enousupply king higltcr than anlicipatd. Had orders for this cjuan- thy nut Iwcn placed in Navcmkr, 1962, the Railways could have averted an extra cxpiditurc of Rs. 10Ai laklr\ apart fmm saving valuable foreign rxcllangc. 2.86. The Chmmitttw trust that in the light of thc cxprience gained in this case, steps will taken by thc Railway Board to ensure that such rod? .:rrorr in cstin~.ation Ja not I rt W. 0 Avoi&ble mwnditluc on purr haw of iM. (;. Iqic pet1-01 tatlk W;I@B~S .dudit hrnpnph 2.87. In October, I Wil, thc A-linistr ) of Kai1w.1) s (Railway Hoard) placed an order on a film fo~the mnnufacturc of 100 hiG bogie petrol rank wagons at the rate of Rs. 26,000 each to be supplied by 30th June, 1963. In August and September, 1963 the firm represented for cancellation of the order as it had been itlcufring hewy losses duc to difficulties in the procurement of steel casting. The firm also represented that the excess steel be utilised against other wagon orders. The offer was, however, not accepted in view of the traffic requirements. 2.88. In December, 1964, in the context of the considerable shortage in R. G. tank wagon fleet and of hi. G. tank wagons becoming surplus * due to commissioning of pipelines, it was suggested by the CXI Companies that the cancellation of the order for 100 M. G. tank wagons and the possibility of the firm taking up manuhctuk of B. G. tank wangons in lieu might be considered. However, ,the Ministry .of Railways rejected this -tion in Juruug, I=, althqh the Minhy wcm at the srmt tinw. corPJidcring the pPCkm d finding out mcurs af utilidq abut 440 M. G. ~nkwrgonr rmdered surplus amsequent an the commbianiqz of pipe- tine for pdeum products bctwccn Gauhati and Siliyuri. 9 2.89. In Mqh, 1%5, it was ascertained that the firm had nor cam- mend any work on this order and that it was still hoping to get the order either ancellcd or modifid. In J111). 1965. thc film iritcrntrd that they had been awnrclod various types of wagon orclm and requtsted for cancellation of the order for these 100 wagons and furnished statements indicating the details of the raw materials and componentr which could bc usc(t against other wagon orden and which could not be so used. The hrrn also accepted responsibilitv for any mrttcrial received by* them be yond the quantities shown in the statements. The order was, however. not cancelled even at that stage.

2.90. Meanwhile, with a view to utilising the surplus hi. (;. ti~rlkwa- gous the Ministry of Railways (Railway Ha,ird) issued orders as early ax March, 1965 for transport ot POL traffic (both dangerous awl non- dangerous) in bulk in tank wagons from Gaullnti, New Jalpaiguri and Baraurii to Shnkurbasti by the longer all hf. G. route, freight charges being levied at special rates equal to normal tarilf rates for the distance by all hf. C;. route minus 120 Kms. All Metre Gauge movement involves 1,406 Kms. from Barauni to Delhi area as against Broad Gauge movement of of 1,165 Kms. Taking into account the extra freight earned by charging for additional distance and the additional haulage cost over the longer route the net loss incurred by the Railways in the movement of 34,175 tonnes of POI. traffic over all M. R. route fr~m1st April, 1965 to 3lst October, 1965 was Rs. 3.72 lakhs. The recurring loss per annum thus workv out 10 Rs. 6.38 lakhs. (The above freight concession was extended to POL traffic moving to Palam with effect from 1st August, 1967).

2.91. An assessment made by the Railway Board in April, 1967 revealed that as apinst the fleet of 4,132 tank wagons as on 1st April, 1%7 the rcxpirement' of M. G. tank wagons would be only 3,500 on the basis of targets proposed for turn-round of wagons.. 2.92. Thus, on the one hand the Railways are incurring a loss in utilis- iug the surplus M. G. tank wagons and on the other proceeding with the procurement of more M. G. tank wagons at a cost of about Rs. 26 lakhs. 8 2.93. The Ministry of Railways (Railway Board) explained (January, 1968) rhat % cancellation of the order wotlld have meant an extra ex- pnditure of Rs. 2 lakhs in the handling and freight charges in the utilisation of the materials procurred by the firm and in the wastage involved such utiligab. It was also explained that the turn-&nd' anticipated in April, 1967 failed lo otateridise in ;rud wcrking and that tire iwenud rwplus of about 600 wagons remained s theorerfsll exercise. It rors further stared that the 10s of carning by the atlopion of longer hi. G1 route should be appreciated from the overall operational point of vim, parbcularly in the context of the acute shortage of B. G. &nk wapa fleet. 2.54. It may bc ,~atrul that the avoidable capital outlay of Rs. 26 lakhs would i~botcwlc in payment of Rs. 1.5G lakhs of dividend to Gene- ral Rcvrnws cvcry pr. Thus cancellation of the order bould have been finanri;tlly iid\.:~nt;~g~~>~~\to the Railways even if it nicant an rxrra expenditure of RI.2 lahhs. 2.95. It may also be obsenc:tl that the existence of s~itplus wagom would itsell aclvcrscly affect the athievcn~cniof tllc targettecl turn-round Furthey, from a M~rnorirntlun~submiucd to the Public Accounu Ccnn- inittcc Iy the hlinistry of K;iilw;ty~in February, 1968, it is seen that the averagc idling of wagom on both MC; and BG had gone up in 1967-68 as colnparecl to 1966-67. The figures mcntionctl were below:- Average idlingtakndao wagons per fy ----. ------,\I G HG

1967-68 . . 216 208 (up to November). [Pragraph No. 18, Audit Report (Railways), 19681 2.96. The Comrni t tee dkired to know whether the Ministry considerad. the question of cancellation of the order for MC bogie tank wagons and tl~edecision taken at each stage (i) with the commissioning of the Cauhati-Siliguri pipe line; (ii) when the request was made by the firm in August/Septcmber, 1963, and July 1965: (iii) when the oil companies made the suggestion in December, 1964; (iv) when the railways themselvu became seized of the problem of utilising surplus MG oil tankers. The. Ministry in a note stated: . " (I) The Gauhati-Siliguri Pipeline was commissioned in November. 1964. The question of cancellation of the order for 100 MO. bogie tank wagons was not considered at this stage as a dedsion had been taken earlier not to Cancel the order because of the i'nfructuous expenditure involved in the cancellation d the order. I (ii) When the request was made, by the firm in August/Septembab. 1963'and July, 1965 the request was not agreed to as it - 67

noted that &he cano&tion of the order at this stage, when a subtpntial portion of materials had already been received and' which auld not be utilised for alternate use, would hwe mmultedin an infruc~uousexpenditure of Rs. 1.2 lakhs.

(iii) In December, 1!%4. the Oil Companies actually came' up with.. the propition for comtn~rtionof additiorlal.hiC tanks. It was the Knilway who p)intecl out to the Oil Companies that their cstim;~tewab incorrect in view of the cotistruction of the Gauhati-Silipri pipcline and the setting up of the Rarauni Refineries. Dtirin~the tliwissions, the Oil Companies made a suggestion to c i~ncel the order placed for atlditional hfG tank wagons. This ~~l~jiC'>li~llwas not considered for reasont stated in the forcgoir~gparagraph.

(iv) The Railway tl~cmwlvesbecan~e seired of the prohletn of utilising surplus MC; tank wagons ill August, 1964 when MG wagons were expected to become temporarily surpius in the immediate wake of the cornmissiorling of the Barauni Kefine- ries and operation of the Gauhati-Siliguri Pipeline. At this point, however, this specific question of cancellation of the. order for 100 MC; tank wagons was not considered as a decision on this had already been taken earlier." 2.97. nuring evidence. the Chairman, Railway Board informed the Committee that "the main reason for not cancelling the orders was the ons side ration that it involved an infructuous expenditure of Rs. 1.2 lakhs. The MG orders were not cancelled because of the fear of the Audit objec- tion to infructuous expenditure of Rs. 1.2 lakhs. The other reasons was that even though MG tank wagons were surplus, BG tanks were short and these could be used in lieu of BG tanks." 2.98. The witness further stated, "It was also felt that this particular company was not manufacturing these wagons in a day or two and so by the time they manufactured them there would be need for these wagons; therefore, let us not waste Rs. 1.2 lakhs on cancellation." 2.99. In reply to a question the witness .informed the Committee that "the position is that all the taGk wagons that are there in the pool are being used. Now and then they become surplus for various reasons. One reason is that the production in the refineries is also changing from time lo time...... All tbnt be said at present is that the position of tank wagons is easy." 2.100.. The Committee invited the attention of the M'inisuy to,'the. amentmade by them in their 22nd Repthat, as against the fleet of 4,132 tank wagons on 141967, the requireme& .of MG tank wagons would be only 3,500 on the basis of utgetr ploporcd far tm-mund ot wagons. 'rtK surplus tank wagom was thus about 600. The Cantnit-. see enquired why the tag4 tumund was not ?&id The Chair- man, Railway Bod stated, "the targeted turneround whicfi has bun nfrndto is the one which is meant for our own purpuse~.which we set tor the Railways*o.achicve. It is not always the case that it is achiev-d. 'This is an internal target which we set before the Railways in orda to keep diem tight, so to say, that the) must impme their operation and so on ;mcl uo fort11 M'e set a target krlowing fully well that It is tight and rr may 1101 1~:achicvd and the calculation ir based on that decision."

2.101. 'rhe (;ommirtcc twlut~crl wtietha wrplti~w;;gon mpaci~ywos wtaflw~ir~g thcir- tur-~~~ouncl. -1 Iw (hainnan, Kailwa) ik>ard stated, "11 19 very difficult for LI+ to <4v tliat, auw the (ondi~iorlzk~ep on difleri% and I,&-ause of the allcrnative ~ulwlineah. +['herefore, tllc tank wagons which would othenuiw be utiJisc*(l intcnciively, would liavc to be used elsewhere. We would like to use them. as they become surplus. The rituation keeps on r.h;tng~nganti new circumstances arise, and in such ~vcwts,it is not jm~ilActo make any statement that so man! tank wagons would h~omesurplus. If we had lesser cluantities, the onl) effect would be hat solnetirnes we fail sonwwl~ere,and HC would not be able to tarq that traff~rat that partictiler time."

2.102. 'T'he Ch~i~nlttecc~iquirt*d wh;;~ ~vouldbe the surplus JIG tank wagolis if the practice of movilig the POI, traffic by the longer all MG route was given up. The Committee were informed by the witness that, "~ll'thatwe can say is that, that route will not be utilised that way; that is not now resorted to escclrr in the case of emergency. It has been ' .discontinued." i 2.103. In reply to a question wlicther in the light of Lhe reco~nmenda- tions of the PAC made in their 22nd Report the Government had taken any action to revise the procedure of placing orders for varlous types of wagons keeping in view the deniaiids of trafhc, the witness replied, "very much so. M'e are making a detailed assessment of our type of traffic and as to what would be the turn~round. We are calculating it very carefully." The Ministry in a note have further stated, "Review of the requirements 4 wagons and other rolling stock is made every year at the time of the preparation of the Railways' Annual rolling stock programme. In order to regulate the expenditure on the Railwaysv Development Programmes and procurement of-rolling stock in acc6rdance with the traffic materialisa- tbn, it has been decided to conduct periodical reviews of the estimated POW* of rail traffic. The purpose of carrying out such periodical reviews .ofrail vansport grpwth is to ascertain h& far the physical programmes d thc railway can be suitably adjurtcd to match tht u;rElic growth with- uut causing JcriouE dislmtian to the production potential already created.

The proms of conducting periodical reviews has stuwd only mdy *t-iating to he rail tra5i &mate for 1oCis69.. suitable mion with-rrgud ?o :he miew of the ordm for wapwill be uLm as and when nuss- u'Y." *

2.104. The Cammicue enquired how thesc 100 wnk wagons were being utilid, the w!itntlss stated "They are being utilih but the tank wagons are not a3 intemivcly utilised as they would have been if there wen fewer wagons. But then emergency movcment5 would have to suffer." The witness added, "We could have clone with fewr tnnk,wagons also. The only etfect of having these rurplus tank wagons was that the position was easy .tnd wl~erevcrthere was any change in the of movement we were .ible to xneet the traffic fully."

2.105. The Committc~are su~riscdto learn that an placed by the Railways in Octolwr, 1961, for Mctrffiauge bogict petrol tank w*agoas costing Rs. 26 lakhs was not cancelled in spite of dear indications that became available subsequently that thescr wagons would turn out to be surplus. It is all the more s11'1,rising that this should have happened, when the supplier himself repeatedly made representations to the Rail. ways for the cancellation of the order. The reprlwentatives of the Rail- way Board stated before the Cmnmittcv that the main reason which weig;hed with them in not cancelling the order was that the cancellation would have entailed infructuous extra expenditure of Rs. 1.2 lakhs. ?;hq also argued that, though the Railways "could have done with fewer rank wagons", the procurement of these 100 wagons helped to make trampor- tation "easy". It passes the Committee's comprehension how, for the bake of avoiding an epxenditiue of Rs. 1.2 lakhs, the Railways accepted an avoidable capital investment of Rs. 26 lakhs, thereby commiting themselves to a recurring annual liability of Rs. 1.56 labby way OE dividend payable to the General revenues. As regards the vihv that these wagons helped ta ease movements, the C~munitteesee little1 justification in the Railways building up a large cush;ion of wagons to meet unforeseen fluctu- ationa in traffic when the same purpose could well be served by better utilieation of wwoll~. The operational statistics given in the %.&w of Performance of Indian Government Railways' (February, 1969) would indicate that wagon kjlometres per wagon day have pr~Mvelygone down from 60.1 in 1965-66 to 57:6 in 1967-68 in metre gauge eectione. This signifies more detention of wapns in mamhalling yards and at tcf- mhal paints, whicb the Railways should be able to reduce with con@ &mt. The Committee have %heady drown attmtiop to this aspea of wagon huiisatioa as alap the exist-9 of m'phil wwcapacity in the Ripilwayr in paras 1.35 and 1.36 of thit Farty-Nb~LhReport (Faurdr Uk Sabh?). The Commitwe hopc that, in the light of rbore okaootiaa. emmat dbts will be made by the Railways and the Planning Commib rim ta awew the &hqg wa@m capacity and the soq~~fm improved ulilirPtion ot aisting wagon rtock, uo chat praciour and vwce inourca arc not unnawsdly deployed in the pwchac of wagpas during the Fourth Plan period.

2.106. The Cmmmiutx also understand that the Admblistrativc Re forms C'hmmbion is comprehensively studying the working of the Rail- ways. The Cammit tee have no doubt that this aspect of the operation of the Railways will in the coursc of the study receive the importance it dacrvts adthat the.remltn of this study will become available to the Railwaye and the Planding C~mmissionin time to facilitate the fonnula- tion of a correct wagon provisioning policy for the Fourth Plan.

Low due to procurement of' st4 sheets and plates with deficimt tnplwr content

2.107. The S2nd Report of the Public Acronnts Committee (Third 1.ok Sabhit) tledt with ;I case of failure by the India Supply Mission, London, in illspc~tingthc suppI) of steel dicets to the Railways which did not contain copper as per specifications. Although the observations of the Conmittee had been brought to the notice of the Mission on 19th June, 1965 for strict compliance, the omissions recurred in the inspections conducted in May, 1966 and subsequently.

2.108. The Ministry of Railways (Railway Board) concluded, in February and March, 1966, three contracts with a foreign firm, for the supply of 8,353 tonnes of steel plates and sheets containing copper to the extent of 0.2 to 0.35 per cent, to the Integral Coach Factory and Bharat Earth Movers Ltd., for the manufacture of coaches. Bulk of the materials duly inspected by die India Supply Mission were received between August, 1966 and Oaober, 1966.. On a check of the chemical composition in Octbber, 1966 it was noticed that the sheets and plates contained only traces of copper ranging from 0.01 to 0.10 per cent against the required percentage of 0.2 to 0.85. This finding was confirmed in December, 1966 through an independent chemical analysis cdlricd out at the National Test House, Alipore, Calcutta.

2.109. On the deficiency in copper being brought to qe notice of hdio Supply Mission in November, 1966 it was understood that the Mis- aids inspection certificates stating that &hesupplies confcrzlntd to the ~~pecificationswe& hue$ merely on the basis of Mills' oun inspection certificates and only test check with regard to physical dimerfsioxw was carried out. Ncitller chemical analysis uf the steel sheets and plaw nor wrification of the actual furnace cl~nllpsetc., with the Mills' inrpco Giori certificates wn$ ever done. \$'hen the relevcmt records were asked for by the inspection stati of the Missian. ;rfter this irregularity was established. the )am= were not produced by the suppliers.

2.1 10.. Sine more conuacts were subscilucnlly pl;lcec\ with the firm, of which sis contrscts were placcd for ;I cli~autityof 10,370 tonucs of copper f~aringp1;rtes ;tnd sheets valuetl at IO.!)J 1;iklr tlollars after the Railway Ruard came to'know about thr dcfrctivc wpply in November, 1966. Net- ween June and August. 19Cj7, u total clu;~~itityof 3.013 tonries of stcel sheets were rcceivcd agp inst one of these substy uen t conrr;lrts duly ;~n:llysed by the 1ntli;r Supply Mission and ccrtifiid as hrtving thc specifieil content of t.opper. Even thee latcr receipts were found trr he tle6c.ietlt in copper content as per tt-sts conducted by the 111tegr;rlCdacl~ Factory ant1 the fact \\.as brouglrt to the notice of the Intli:~Supply hlission by the hiinistn of Kailwirys. in Juac. 1W7. The I)irec.tor <;ent*ral. Ii~ili;r Supply Mission. replied that the subseq~~critur1ltp1it.s were certified 11). I~inionly ;tftc.r n vcy careful check and chcmic-a1 ;innlysis of tllc sanij)les as having a coppcr content to the estent of 0.21 and 0.111 per cent. IIe. thereforr, callctl for a recheck of the malerial. The National Test FIousc, Aliliore, on recheck. confirmed the findin@ of the Integral Coach Factory Administra- tion, 2,865 tonnes of sheets, samples from which were testctl, were found to contain copper ranging frcxn 0.01 to 0.05 per cent.

2.1 11. Further, it subsequently cane LO notice thitt die hlillb' ceru- ,ficates, on the basis of which thc India Supply Mission issued their inspec- t ion certificates, themselves contained a number of discrepancies. In mat .of the cases the 'heat numbers' indicated in:the Rlills' certificates did not tally with the heat numbers available on the sheets. 111 some cases heat numbers were not at all trirceable on the sheets and in some other cases the details of the copper content furnishetl in the Mills' certificates ap- peared to have been inserted later.

2.112. The copper bring stecl is espected to ofier @.eater reistance to atmospheric corrosion and consequent increase in the life of the steel .is likely to be anywhere between. 50 to 100 per cent. Thus the use of non-copper bearing steel is likely to reduce the life of the sheets to prevent ,. which it would be necessary to keep a watch on the coaches and repaint the surfaces at suimble intervals involving extra efforts and additional .expense.

2.113. I& has so far been established that a quantity of 12,215 tonrmi sf steel sheets have been received with deficient copper content. The

0 raam at which thee hecu and plam were purchased varied from 89 dd- kn per ronnc to 139 dullan per tonne. 711e qwstion of compnsation frmn the fifil is stated to k under negotiation. [P~qrqANo. J9-Aucli t KC~JI-t(Railways) , 19681 2.114. From copies of certain reports iurnichrrl by the Mi~istryof Railways, the Cmmmittct obsc.rvt that the circumst;~rirc~leading 10 the supply of shms Bdicient in c-oplwr were invcstigatd by tSc India Supply Mission. 7hc invotiptio~icliscltr~eti the frrllnwing position:

(i) Throughout 1966, thc ~III whom orders were p1acc.d for suppl) of c ojqwr- bcari~ig \1~~tshad asketl the mills concerncul to manufacte "no11 copper-bcdrinp; unliilltd ordinan. 'I'lromas ($~;tlity sheets." .Ipprouim;~telv4,250 tonncs of such sheets rrcw so manufartured. 'I'he \ires in which tlitsc ' shrvts were manufactured "wc-re lor bigger thicknt.rs (than stipulated in the contmct ) with no plus tolerances, but with as much as 20 per rent min~istolerance."

2.115. Noting the fact th;it tlic inspc~ctio~iol 111~ reI done by the India Supply hfission, thc Committee- rcrallcil thc. ohrc~*wtiom in .their S2nd Reprt and enquircd wht step hat1 lxcn taLcn to streamline inspection of stccl slieets and more particu1;trly to prescribe chemical analysis of shcets as part of the inspection routinc. The Corn- mittee were infornled that "with rqard to the PAC's 32nd Report, an Office Order was issued by India Supply hiision calling npnn the Tns- pcting officers to show extreme caution in insperting goods without reft11e11reto official copies of orders and exercise clue cwe to see that the nlaterial conformed to specifications. This ofice order is kept in view wldst doing inspection. In fact no steel is approved without a phuuical check and chekiilg chemical analpsis test sheets produced by the hlills. After the complaints began* to come from the Integral Coach Factory, the India Supply Mission took the unusual step of carry ill^ out independent chemical analysis tests also."

2.116. The Co~rnittenote that the inspection done by the Jndian, Supply Mission failed to disclose the fact that subsequentlv came to notice during investigations that some of the sheets were of '"biegrr thicknaea" than uipulrtcd in the contract. As rrs;rrcia &mi- aJ analysis d the rhccts, for which the India Supply Mission relied on. tbc Milb' own anihcrta it is seen that rhe investigations conducted. .by the India Supply Midm dixld that "thy were forged" and that the rtitnant test sheets "were falsifkd in terms of chemical composition, puality.ctc?' When th~matter was brought ta the notice of the Mills they wid that "they had no alranative but to accept that somkone in thclr organisation must have been in collusion with' MIS...... (contractor), in being able to get hold of black shects of hlills' production proforma and fill in data by retaining certain works order numben mmtb but'compktclv altering the description of the material. the specification, the chemical cornposit ion. ' tonnap and in mrtain instances the :tlr*,."

2.1 17. The Cammittcv also note in this tonnccrion h0n1 ilrc investigation report that one of the con~plainthI&lge

2.1 18. The (bmrnittce cquirccl what action .\z..ib take11 against the fim~after the defitiencie in the shccts werc reported by thc -Integral Coach Factorv to whom thcw shccts MWC mainly sent. The h,linistr)t of Raiiw.iys in a note gavc the follow in^ reply: "\+%en the sccond complaint of copper dcfciewy was rtyorted by Integral Chad1 Factory in June, 1967, it w:u decided by the &ard to stop ,further (lealings with the firm.

It was also decitled at thxt time. i.e., in JunelJuly, 1967, to ter- minatcs the ourstantling contraits :IS and when the delivcry period expired (to ensi~rethat there was no brcach of contract from our side rendering us liable for claims). In ac- cortlancc with this decision, a total quantity of 12,480 tonnes- has been cancelledlunder cancellation valued at $1,242,150 ..."

"An amount of $1,06,542 due to the firm ,for a consignment of 1149 tonnes of plates shipped in August, 1967 has been

withheld towards compensation ' for ddiciencies in earlier supplies.

Perfomancc Guarantee Bonds executed by the firm have been- enforced npinst each contract and an amount of $45,344 encashed in the first stage and subsequently a further amount *of @1,853.50 bas encashed to make up the compen~ati~ -ted in Marcb, 1%8. Cnmpar~th d $1 78759.50 was qrd upon by the hdh Supply !Ukh and the suppliers, to cover primarily for the defhie"~y of copper and ah far ocher deficiencies mukd during in- vastigation, id., killing and procers of manufacture in rhe &tee1 rupplied. * 9'he performance Guarantee Bonds arc still valid for a further bala'nce of $1 1,671 .50. . Agency commission to the extent of $4,868 payable in tern of the contract has been withheld." 2.1 19. The Comtriittec enquired about the details of settlement m:de with the lirm. From copics of the relevant minutes, it is seen thnt a cornpenration of $1 73,739.50 wnq negotiated as follow^ ... - - ..------.------. -2.-. ------..- (i) Coyper contents r 2,215 tons 67 )r03,R2 7-50 (l'his is the'ccst of $8 5 per ton. repainting reported by the Railway Hoard) ii) Killing 14, 89%t,)ns@ $4.03 S591592 '03 per ton. tiit') Process of manufacture 5,160 $10,320 .oo tons6 $2 per ton. - 'I'otal $173,739 ' 50 ------.- - - - - 2.120. The C;ommittcc also observe from tlic term of settlement ,that I149 tonncs of plate shipped in August, 1967 for which payment was withheld by the India Supply Mission were sheets of Czech origin. One of the terms of the settlpcnt was that this would be paid for in rupeep. I 2.121. The Committee were informed by the Ministq of Railways that after this settlement was reached, the solicitors of the finn with wlrorn the contract was placed indicated that the firm intended to file a suit against the shipping agents of India Supply Mission (an Eng- lish firm) for having shipped the consignments of 1127 tonnes supplied without delivering the bills of lading to the firm to enable them to claim payment. The finn also indicated that they would "refer the qucstion of cancellation of subsequent contracts" placed by Government with the firm for "arbitration" the India Supply Mission had 'indernni- fied" the shipping agents "for charges made against them" and instructed *heir solicitors,to "take appropriate aaion to: ' " (i) have ide Government of India added as a party to the proceedings; 7s (iii stay the action on the grounds of immunity" (as "a f&iP sovereign is involved) ." . 2.122. The ~ommitte$enquired whether in cases involving supply of material to ~a:lwa~sagainst contracts placed by India Supply Mi* sion, inspectbn was being remitted to outside agencieslforeign Rail- ways and if so, on what .terms. The following position in this rpvt was $xplained to the Committee: "In* the contracts placed in U.K.IContinent D.G.II:S.M.. London1 his nominee is nominated as inspection authority on be- half d the purchaser. It is DGlISM who decides in consultation with the Railway Adviser, London, whether to remit the inspection work to outside agencylforeign railway, and if so. to what extent and on what terms. The DGlISM has agreements with the National Railway Undertakings in Germany. Fr;rnce, Austria, Belgium. Wit7erland etc. for undertaking inspection. Generally speaking, inspection of *spe- cialised railway equipment, such as. rolling stock ant1 rolling stock components is entrusted to tlieesc foreign Ri~ilwnys( outiside :~gencies. Ccneral items, such as 'steel' are inspc'cted 1-I!. IShl's own inqpection wing which has qualified cnh'vncers. Inspectio~i of steel orderecl on MIS...... was undertaken by IShi's own inspection wing". 2.123. The Committee asked for data itbout expenditure incurred during the last 3 years in paylncnt of rem~~nerationto outside agencies. Thc information furnist?cd otl this poinc is rcptotlurt~tlIwlow: "The inspection charge9 vary bctween 0.15 to 1 per cent depending on nature of stores and location of stores. The year-wise inspection fees paid to outside agencicslnatiotial railway unclertakings, as advisetl .by the Tndia Sitpply Mis- sion is as under: .

Amount paid to (in Pound Sterling) Year Contrxts placed bv ------Outside National ~pcncies Railwavs 'I'otal ------ISM .9I 297749 1965-66 . 35,991 Directly from India (Inspec- tion by ISM) 4,705 11446 i ISM 7-4 10,069 1 1966-67 r I 2,78 I Directly froL1ndia (Inspec- J tion by ISMI 1,376 1,262 t a ISM Nil 18,323 1967-68 J Directly from India (&spec- J tion by ISM) , 4,728 1,703 ------4 2,124. neCommittee uc dkrramd t6 rroo tbat 1~,1!15 toa~erart d *t 12,000 tanaes of stcd heetr/pleur mpplied by an atarcnr brm to the Railways did not contain copp& occlordiag p coa- qndfia- Beddm wmre of the sbectr turned out to be thicka thqa rtiplpted in th! contract* The inspection of rbae sheets/pktu nor cx)ducted by the India Supply Miwion, London, but they failed to detect that some oi the &ettl,did not conform to contract bpccificatioas in the matter of thicinerr Ar regards the +mica1 properties of tbe sheets, they relied largely oo the MWown &ifi&tas; but thew turned out, on subaequent invdtigationr, to be "forged". In fact, these investigatiom disdoed that the firm, wicb whom the wntrecb w~eplaced did not Psk the Millr to produce copper- bc;uiag L~UW at all, except for a negligible quantity of 40 tonnes and that in "collusion" wiih some of the Mills employees "falsified* the certi- btes. Adquatc facilities were also apparently not given to the Inspect- ing Staff of. the India supply Mission to carry out the inspection.

2.125. In pira 34 of their Thirty-.Second Report (Third Lok Sabha, the Committee had comment& on the failure of the India Supply Mimion to detect the absence of copper in certain consignments of steel sheets sup plied to the Railways. It is regettable that an identical lapse should have recurred and that, in the course of inspection, the India Supply Mimion even failed to detect dimentional deficiencies in the sheets. The Committee would like Government to fix r~qm~bilityfor the lapses that occurred on the part of the Inspection Staff.

2.126. Another aspect of the case calling for comment is the fact that even after the deficiencies in the lots supplied to the Integral Coach Fac- tory came to the notice of the Railways, Six more contracts were placed with the mefirm. The Committee would like Government to investigate how this happened an4 Eix responsibility. e 2.127. The Committee note that the question of cornpenation to be paid for the deficient sheets is still in dispute. They would like to be apprised of the progress made in realisinp: compensation from the firm to the extent it is not covererd by securities held or encashed.

2.128. From the'information furnished by tbe Railway Board, the Com- mittee observe that during the last three years a sum of £ 73,526 was paid an remuneration to foreigli Railways adother agencies for inspeaion of Railway stores for which orders were placed with the overseas suppliers. The Indian High Commission in London has a Railway Adviser and the India Supply Mission, London have their own complement of inspecting staff. The Committee would like Government co examine whether it is not possible for these two agencies to 'conduct inspection in such cases also, 80 that the expenditure incurred on the payment of remuneration to foreign Railways and outside agencies could be saved. North Emstun and Central Rdlways-Injud3cious

0 &es

2.129; 1n;tances have.come to notice where stores were prqcured without due regard in the specificatiokls resulting in non-utilisation of storel ov~long periods. .

North Eastern Railway a 2.130. Indents were placed in November, 1955 and September, 1955 for the procurement of 6,090 and 2,100 axle boxes respectively although due to change in the specification of the journal to new Indian Standards the consumption of these non-IRS axle boxes hAd sharply xomc down. The consumption in 1954-55 was' only 2,909 agaiwt a consumption of 5,618 in 1952-53. A total of 7,990 axle boxes were re ceived by 'the Administration between May, 1956 and January, 1958 against these indents, but only 706 axle boxes could be utilised till 1961, when it was decided to change the specification of the journal in the metre gauge brakevans specifically with a view to utilising these surplus axle zoxes. Howwer, only 5,118 axle boxes could be ukd by the end of July, 1967, leaving a balance of 4,166 axle boxes valued at Rs. 3.21 lakhs. Central Radway 2.131. Out of 494 axle boxes procured in 1957 for the old type E.M.U.coaches which were replaced by new coaches fitted with roller ,bearings, only 88 axle boxes could be utilised till May 1965. The value of the remaining 406 axle boxes was &. 52 thousand, but a Sur- vey Committee, which recommended their snapping, placed the scrap value at Ra. 2,040 only.. [Paragraph No. 20, Audit Report (Railways), 19681. 2.132. Taking up the question of surplus non-IRS.axle boxes in N. E. Railway, the Committee enquired whether there had been any change in the specifications, which had affected the consumption of those boxes. The Ministry of Railways have stated: "...... prior to 1952 during OT Railway times instructions had been issued that non-standard 7" x 34" journal size wheel sets should be replaced by IRCA 7" x 4" wheel sets but upto the time when the indents in question were placed these instructions had not been implemented. Even in 1955 when the position was reviewed, it was found that the workshops were* not in a position to undertake this. conversion work for some time to come as it involved complete change in the running gear compone nu. There fore, even though inlitructions did exist for rep?acement of 7" x Sf" journal size wheel sets and axle boxes, the actual positiog is that this conver- ' cion work has not been carried out uptil now and therefor?, this fact hu had no. bearing on the consumption of axle boxes," 0 2.1 33. The. Committee cnquired whether, with a view to utilisi~gthe surplus boxer, the specification for the boxes to be used in .la-agons was changed, as stated in the Audit paragraph. The position has been explained by the Ministry of Railways as follows: . "...... specification of rhc journal for M. C. brake vans did not undergo any ch%nge. The fact was hat for building new wagons both B. G. antl M. G., there was shortage of I. R. S. 'standard wheelsets and in order to overcome this difficulty instructions wire issued by thr Railway Board in September and October. 1960 that standard JRS wl~eclsetsshould be releaaed and replaced by old type of non-standard wheelsets both on H. G. antl M. (;. open line stock where this change would not result, in redwtion in the carrying capacity. As examples, goods brakc valis, sheep vans, tiepartmental wagons, same parcel vans rtc. were sugcsted foi tl~ibpurpose. Thest. instructions were issued z~idr:Kailwly Board's letters No. 571960j51M (N) , dated 6-!Mi0 and 1:10(i0 and col)ies of these are attached as annexure I and 11. 'I'hcwforc. il will be seen that these instructions were issuccl io~ altogether different purpose and not with s view to utilisc the, stoc.k of 7" x 34" axle boxes held -by North Eastern Railway." 2.154. The Committee askccl wh:~rwas the position in rrprcl to unutilised axle boxes. The hli~;is~ryof Railw~yshaw statrd: "The present stock of these axle boxes is 40.52 nos. For wagonr fitted wit11 7" x 34" axle boxes which will still remain with North Eastern Railway the future requirement has been assessed as 350 Nos. per year ant1 it is intended to retain 5 years stock to meet this rcquirernent. This will ellable utilisation of 1750 axlc boxes which will leave a balance of 2282 nos, which will \lave LO be scrapped."

2.135. The committee. wanted to know 011 what basis the indent for ,\he boxes was placed in September, 1955. The 3finistry of Railwnys have replied: "At the time of placing indent in September, 1955 the annual consumption rate was based on the average of previous 3 years actual consump~ionwhich was as follows:

5618 1952-53 . . 0 1953-54 . . 5544 1954-55 . . 2909 Y 79 fn calculating the quantity to be indented the annual consumptioh rate was taken as 4600 nos. and the stock on hand and the outstanding indenta were taken in to aocourrts." . 2.136. The GSmmittee asked how. if rrs stated by the Railways, the ancients were based on stocks in hand plus consumption, the Railways were fa@ kith the prwpect of having to scrap 2282 axle boxes. It has been stated by the Ministry of Railways that "Axk boxes 7" x 3.)" are fitt& onpld t) 1"' of wagons which started getting condemned in considerable numbers from 1955-54 onwards. The number of wagons condemned during the period from 1952-53 to 1961-62 is given below:- 8 * ------Year .No. of wagons condemned ------1952-53 . . 399 1953-54 . . 16a1 1 954-55 . . I 1-41 1955-56 . . 1562 1956-57 . . 784 1957-58 . . 75 '? 1958-59 . . 412 1959-60 . . 31 1 1960-61 . . 121 1961-63 . . 63 In September, 1955 the average consumption rate was assessed as 4600 .Nos. per year. This was based on the average of the previous years' consumption. Although this is the normal practice followed, but the spa cia1 feature in this particular case viz. that a number of non-standard wagons with 7" x 34" axle boxes were being condemned was not taken into account. This aspect was particul,arly important because with less number of non-standard wagons with 7" x 34" axle boxes the consumption of such axle boxes would be less and secondly a substantial quantity of 7" x 34" serviceable axle boxes would be released from condemned wagons. It was an omission that these factors were not taken into consideration while assessing the requirement and consequently axle boxes in excess of the actual requirement were indented. In September, 1955 when the indents were placed, the stock of the axle boxes in hand was nil but sup ply of 8990 numbers was awaited against earlier indents." 2.137. The Committee enquired about the book value of the axle boxer and the amount expected to be realised by their sale as scrap. The Minis- try of Railways have stated "Based on the book rate of Rs. 78.22 per axle box the total cost of 2282 axle boxes comes to Rs. 1.78 lakhs. The rate at which Lhese axle boxes after being scraped can be taken on books will be Rs. (38.00 pa metric toilne. The weight of one axle box being approximately 19.5 Kg scrap rate per axle' box comes to Rs. 1.91 and the credii for the scr;?? value of 2282 Nos. will be Rs. 4358.62. heref fore; the net loss due to scrapping of 2282 axle boxes will be Rs. 1.74 lakhs." klb8. Taking up the quation of surplus axk baxa procured * E.M.U. coaches in the Central Wway, the Codttec enquired whm the decision to replace the E. M. U. coaches coaches with roller-hear- ixags WPI taken. In their reply, the Ministry of Railwivr have stated: "In ' 1951 decision was taken to star~dardiseroller-bearings for nFw coaches te be ordered in future. The code life of a coach k SO years but q$acement ir made on agecum-condition basis, Sufficient number of new coacher not being available to meet the increased requirement of traffic, cpachh an often kept in service beyond their Code life of SO years. Old E. M. U. motor coaches in question were placed on line during 1925-29. For their maintenance axle bxes 11" x 53" jou~nal cize will rodtinue to be required upto the time these coaches remain in service."

2.139. The G,mmittee wanted to know how many of the axle boxes procureci for the E. hi. *U.coaches had turned oui to be surplus. The position* as explained by the Ministry of Railways is as follows:

"There were 406 axle boxes left ovel on Central Railway. Out of these 177 have bcen drawn by Wcstern R~ilwaywhich has 33 motor coaches on which these ciin be uml. Further I31 nos. . are expected to be utilised on Central RGlway itself during the course of next 8 years for which period the motor coaches are likely to remain in service. This will leave only 98 axle boxes surplus to the requirement which will have to he scrag ped."

2.140. The Committee regret to note that out of 8,190 axle boxes pro- & by the North Eastern Railway for use in wagons, as many as 2282 axle boxes valued at Rs 138 lakhs have turned out to be surplus, and that the Railways are likely to sustxin a loss of Rs 1.74 lakhs due to the proposal to scrap these surplus axle boxes. The Committee further note that the excess procurement occi~rreddue to the failure of the Railways, to take into acmunt the fact that the wagons for which these boxes were needed were being,condemn.ed in large number. The Committee wodd like the Railways to investigate the circumstances in which this failure occurred

2.141. The Committee also observe that as many as 98 xxle boxes out of 494 procured for the old type E.M.U. coaches in the Ccntral Railway hvc been rendered surplus and will have to 4.w scrapped. The Com- mittee would like the Railways to irivestigate the circurnsc-ances in whicb ' thee boxes came to be purchased in excessive numbers. * 8l Sourthan, Nortban and North E;lsrrm Railways procurement of alumi- ' Pium cablea Andit pang rap?^ 2.142. 1n'!3eptember, 1965, the plicy of the Government on sqbstitu- tion of aluminium for copper in the cable industry was outlined in a letta iuyed by the Ministry of Industry to variouh firm; nianu~cturin~ cables. This was followed by another circular letter by the Director Gene- ral, Technical Development in November, 1063 stating that all cables except a few speclalised requirements should he man'ufactured in aluminium instead of copper by October, 1964. 2.143. The Ministry of Railways, however. took up the matter with the Director General, Technical Development in DcctTnber, lcl65'stiiting that Railway signalling cables would necessarily have io be of copper until ex- haustive studies in regard to use of aluminium for copper were made. The Director General. Technical Development had, accordingly, permitted a Bombay firm and two Calcutta firms in May, 1964, to continue the manufacture of Railway signallling cables with capper.

2.144. However, some Railway Administrations procured aluminium cables which could not be utilised.

Southern Railway.

2.145. Against the indent for multi-stranded signalling cables with copper conductors (two sizes) placed by the Southern Railway Adminis- tration in March, 1964, the Director General, Supplies and Disposals advised in April, 1964 that cables of one of the sizes could be manufactured only in aluminium. This was accepted by,'the Administration in May, 1964, contrary to the existing specifications for the cables. Orders for 6,00,000 metres of this size were, therefore, placed in September, 1964 on lour fixms. Three of the firms did not get the exemption referred to above, the quantity ordered on the fourth firm being negligible.

2.146. An attempt to cancel the indent was made' only in February, 1965, as a result of 'which a small quantity of 34,500 metres could be cancelled. The balance quantity of !3,65, 500 metres costing Rs. 3.64 lakhs were received between January and July, 1965.

2.147. The Administration stated (February, 1968) that the cables though not suitable for low voltage signalling could be used in power supply circuits and high0voltage fee& adwould be used in due course. The stork in January, 1968 was stated to bc 1.54, 250 metres, the balance' quantities having been issued to the Signal and Electrical Departments or transferred to other Railways, Norllrcw Railway

2.118, Tl~cSottlicrn Keilwav Administration pl;;red an indent for ' tile bupply of wgt~alli~~gcablts with coppcr conductors on, the Director Gcncral, Supplic.4 81~rtlDiqmrials in October, 196.1 l~rtthe lattsr placed an order in April, 1!1G5 for the 5upply of 2,!M,400 rneucs of cithles with ahminiurn cnnttuctors at a vdue of Rs. 1.17 lall,, Thc m;~te~ialwas received in Jl~ne-luly,1965, but the changc of specificntiolt was noticed only in Aupst. 1965, on receipt of a report from onr 'of the consum- era. On the advice of the Signal Depart~mntthar the ti1 cui~carrying capacity of cables with aluminium ancl copp~rconclwtor~ were the same. tllc Administration decided in December, 1965, to .~ccept the supplies. It was only in March, 1966, I!I.I~ is, almost ,I )ear after the order was placed on fhe firm, that the Administratio11 addressed the Director General, Suplies and Disposals enquiring how the specification in the indent had been changed without informing the Railway. Mean- while, iristructions were issued by the Administration in March, 1%7, an the advice of the Signal Department again, that the cables with aluminium conductors were not to be used in railway signalling circuits konnected to train operation. The Administration stated (Feb ruary.' 1968) that 33,000 metre$ were utilised in circuits not connected with train operation and for other electrical works.

North Eastern Railway. 2.149. Against the indents plared by the Administration for the supply of train lighting cables with copper conductor of a particular size, required for coach wiring, the Director General, Supplies and Disposals offered supply of cables with aluminium conductor of a different site. As the offer was accepted by the Administration the Director General, Supplies and Dispos:!ls placed orders for the cables and a total quantity of 19,300 metres of such cable valued at Rs. 70 thousand was rerf ivrd on the Railway between February and June, 1965. The Admiriistration stated (Februaq, 1968) that about 8,300 metres of cables were in stock in December, 1967. [Paragraph 22 'of Audit Report (Railways) , 19687 2.150. The Committee were informed that, with a view to conserve capper, Government took a policy decision that cables of specified sim should be manufactured in the country with, aluminium as the conductor, instead of copper. This decision was communicated by the *~irectorateGeneral of Technical Development to the cable manufacturers in September, 1963. The Railway Authorities, ho,vever, represented that the switch-over from copper to aluminium in Railway sig- 83 nailing circuits would take time. The Director General of Technical Development, thereafter,,pe~rriittecl thrce firms in May, I!tM to coritinue . manufacture of dl sizes of Kililwq signalling cables with copper.

2.153. The Committee enquired whebcr this decision was konwn to the Director General, Supplies and Disposals, through whom'orders ~IJ Chc qses ~ncnticmcd in the Audit paragraph w& placed. The Ministry of Railwa\* I~,IVCst.tte

2.152. The Committee asked why, if the Director General, Supplies and Disposals was aware that only three firms had been permitted to manufacture signalling cables with copper, the orders for the cables were placed with firms who had not been given such permission. In their reply, the Ministry of Railways have stated: "It is not clear from nirec tor General, Supplies and Disposals' reply as to why they placed the orders for signalling cables' with aluminium conductors in lieu of copper conductors. In fact, the size of the signalling cable required by Northern R.il~s:~ywas never banned by birector General, Technical Development !'o1. manufacture with copper conductors."

2.153. Takmr note of the position that of the two Zonal Railways which proc111t11 signalling cables, (i.., Southern and Northern Railways) , in one Railway fi.e., Southern Railway) the decision to accept aluminium instead of copper cable was taken by the Railway Administration itself, the committee enquired how this came to pass and at what level the decision to accept aluminium instead of copper cables was taken. The Ministrv of Railwavs have stated: "The decision to accept aluminium c~hleagninst item 2 of the Southern Railway was taken by Hn Assistant Signal & Telecommunication EngC neer. It is because of this that ' disciplinary actiofi has been taken aeniltst theo0fficcr concerned who failed to obtain the apprwal at an* ' ,. appropriate level." 84 ? 2.154. The Committee pointed out that in the case at the indenc, pkd by the other Railway (Northern Railwfy) , the decision to accept aluminium instead of copper cables was taken, by the Dimtor . General, Supplies and Dis]x,\als through whom the orders were. ltd 10 (a) to (d) of Li'it of Yaii~tsplaced, without consulting the Railways and elquired whcn the change in specificatiofis was noticed .by the Railwap and what action was taken thereafter. In their reply,, the Ministry of kai'lways 'have stated: #. "The materials were received by the various iudentors during rile j,c:rioti 30th June, 1965 to 30th ~e~tember:1965. The complaints werc madc by the consignees as early as 5th August, 1969." "It was lound that thc current c:irrying capacity of the alw minium con~tuctorwas the same as of the copper conductor for which the indent was placed. Northern Railway, therefore, decicled to accept the cables and utilise it lor circuits other thari safety signalling circuits." "Aftcr rhecki~~gup LIW matter with the consignee9 nboilt thc incorrect supplie\, the m;ttter was taken up by Northern Railway on 143-1966, ix., within 9 months of receipt of the first consignment." "Jt is seen that it w.15 orlly or1 3rd August, 1967, i.e., after a lapse of nearly 1-1 JL ycilrs, that Direr tor General, Supplics and Dis- posals urrotc to ATorthern Railway that their case is missing and the). wnred [lie Norther11 Kailwny to give them the dupli- cate copies of rhe necesary documents. The documents were supplied by Nortlierii R:tilway on 27-9-67. After that, no further action seeks to have been takes by Director General, Supplies and Disposals." 2.155. The following picture of the ii~ilisationof cable was furnished to the Commit tee:

"Southern Hajlu~ov.-Out of 5,655 coils, 4158 have already been issued for cunsklmptlon to other Railways and Electrical De- partment, Soi~th'ernRailway, on demand. Balance, 1,497 coils are still available in the Co'nstruction Depot Arkonam. The cables have been utilisecl in non-vital Power Supply circuits." RniT:~~av.-Outof 2,99,400 n.twss received by Northern Railway, 1,01,305 metres have already been issued and the balance' of I,Qti,(Flr is still*available. The cables have been utilised for tcler(~i1ununication circuits not conimted with train c:~cr;r';an and also for Power Supply circuits. I 8156. The Committee enquired whether the cables issued for use in pow-supply and telecommunication circuits in Southern Railway and Northern Railwa hadoin fact been used. The Ministry of Railtvap bestated: "As tie cables have been supplied to a number of consignees, it has not +en possible to collect information from all of them. It icr, howeveg, ascertained from the Railways that a few consignees, who have replied so far, have intimated full utilisation of the cables taken over by hem:'

2.157. The,Cornmittee note that cables made. of aluminium worth RM.4.81 lakhs were pnmved by the Northern and Southern Railways for use in signalling circuits though the policy of. the Railway Administratiom was to use only copper cables in these circuits. Consequently these cables could not be utilised for signalling work and had to be diverted for use in other circuits. The Committee note from tkinformation furnished by the Railway Board that a complete picture of the utilisation of these* cables is not yet available. Besides. as much as 3.44 lnkh metres of cables out of 8.65 lakhs procured by these two Railways, remain unused. The Committee would Like the Railways to examine whethcr these cables could be put to use. If there is no prospect of the cables being utilised in the near future, expeditious arrangements should he made for their disposal.

2.158. The Committee also note that though the D.G.S. & D. was asked to procure copper cables, orders were placed by his organisatiou in ane of these cases for alumhiurn cables without prior clearance from the Rail- ways. It is regrettable that this should have happened particularly when thc organisation was awarc that the Director General, Technical Develop ment, had not banned the manufacture of that type of cable with copper conductors. It is also strange that though a complaint was made by the Northan Railway in this regard to the D.~.s.& D. in March, 1966 no conclusive action was taken by the latter, except for calling for copies of documents after a lapse of 18 months. The Committee would like Gov- ernment to investigate the circumstanct.~in which the D.G.S. & D. made an un-authorised deviation from the indent specifications while promring the cables and fix responsibility on the party found'at fault. Westam ~dlwa~-~oar.of H/S.D. oh due to seepage Audit Paragraph 2.159. High speed died oil for fueling diesel locomotives was being stored in concrete tarilq at Randra shed from the year 1947-48. Due to hemy seepage noticed in 1960 two mild steel tanks were ordered to be transferred,from another station in June, 1961. In April, 1962 it wab. decided to shift only one tank which was received in October, 1965, but * war ercclcd orrly ill Januasy, 1%;. l'he tat& ir exyecud m be carp- mivoioiletl when the flow meters are' received.

2.1ti0. Meanwhile, an esibated 93 kiloliues of oil costir~gabout Ib. 58 tllousand is reported to have been lost due to seepage in the years 19644% to 1YM-67. #

2.161. The eA+niuibtration b~att'd that part of tllc losses were dtui- bu~ableto llantllirlg, retail issi~cs etc., a11d 111~CS;IC.~ c1uantum of lou due to secpagc could not bc assebbcd.

[Paritgri~pll No. 23, ot , Audit Kcport (Railways) , 19681.

2.162. 'I'lie C;onimittee wcrc informed by the Ministry of Railways .that the steel tank, which was received at Bandra in October 1963, was erected and' commissioned in November, 1967. Explaining the circum- rtances under which tlic delay in erection took place, the Ministry of Railways have in a note stated as follows: "On receipt of tlie tank at Bandra in October, 1963, preparation of the plant showing the foundation details and superstructure for erection df the tank were taken in hand. After finaliring the plans, the Inspector of Explosives was contracted in March, 1964 for approving the installation. (;hailge of the site for erection of the tank was suggested as the originally selected site was too near the shed. A new site was selected and the plans were rcvisetl ;~ccordingly and were approved by the Divisional Engineer, Bombay in September, 1964. Orders were issued for taking the work of providing the foundation. The work could not be taken in hand and had to await the finalisation of new zobal contracts as the old contract expired on 30-9-1964. An agreement was entered into with the new zonal contractor on 24-10-1964 and the foundation work was commenced in April, 1965 after preparing and obtaining approval of the work order.

As the new site plan and the installation were not formally ap proved by the. Inspector of Explosives, a reference was again made to him in July, 1965. The Inspector of E~plosivesrais- ed certain queries and fixed 30131-7-1965 initially and later 18-9-1965 for joint inspection which could not tLkeplace. The Inspector of Explosives inspected the site on 16-10-65 and sup gested certain modifications to the phns. The plans were re vised accordingly and submitted to him on 18-12-1965. The pialls were returned by the Inspector of explosives on 4-1-1966 asking for additional information. The necessary information, which had to be collected from various departments, was ready. by 27-51% *hen it was sent to the Inspector of Explosrva. To ex'jxdite the matter, the Divisional Engineer, Bombay wrote a Demi-Official letter on 305-1966 to the Irlspector of Explosives and contactecl him on telephone on 24-6-1966. The histant Engineer had personal discussion with the Inipector of Explosives on 25-ti-1966 when the latter asked for some more * details. The necessary information was collected and sup plied on 21 -7-1966. The Inspector of Explosives finally ap proi.etl the plans for the installation sand returned them on 9- 12-1966."

The Ministry havc also stateti, "There was not doubt delay in corn. missioning of the steel tank antl the question of Fisiiig the responsibility under the ronsit1er;ttion of thc R;lilwa\ .4dlninih-ation."

2.1tjS. 'I 11r (hnrnittee encjiiiirtl wt~etl~erthe plai~sfor the foundation and sul)etstructure toultl not haw I)ew tlr~wnill:, in advance of the receipt of the tank. The Rlinistry have in their reply statecl, &'The steel tank .it Radhanpur w.is of Iwge dimensio~~s.111 order to gct it to the ground levcl from the mnsoliary conslruction at Ratlhanpur and facilitate its trawport, the tank hat1 to be cut into sm;iller parts. It was not possible to prepare the plam for the fo~~litlationantl ailperstructure in advance as the final ,six of thc t;~nlrrt11 erection was tlilTercnt from the original."

2.164. ?',tki~lg of tht, ~msitioiltl~t~ oil IVOI t11 R\. 58,000 was lost by the Kailwnys, clue to the‘ delay in erection of the steel tank, (luring the pelioil 1961-65 to 1966-67, the Committga enquired about the losses in 1967-68. In their reply the Ministry oE Kailwii\'s have state(1: "During the year 1967-68, approximately 5077 kilolitrt.5 of diesel oil was received at Ranch Loco Shed. The shortage detected during the period was 5 kilolitres. The approximale value of 5 kilolitres was Rs. 4100. The shortagc was 0.08 per cent of the total receipts and was less than the margin oE 0.2 per cent allowed for handling losws. There is', therefore, 1i;mlly any losr due to seepage."

2.165. The Committee regret to observe that it took the Railway Admi- nistration over four years to erect a steel oil storage tank after it was received at the site of wbk. A substantial quantity of oil which was, in the meanwhile. stored in concrete ianks was lost due tb seepage, the loss. on this accgunt. including other sundry losses, amounting to Rs. 58,000. The Committee note that the d$ay in erecting the tank was caused by the time taken to obtain the approval of the Explosives Department for the a acction plans and that Lhe quathn of fixing rarponsiity for the d* & unda cousideration. r. 2.166, Tbc Cmmmittce deprecate the iuotdinntcly long time taken ik ~ttlingpreliminaries and formalities before taking lo hand ,the work of inrtPilation of the tank The Chumittee would like the Rdlway~to im- prar on all concerned the ndfor adopting a puqmive and businaslike appnoocb in rbe execution of work which b necessary in tbe ilrtdi of rropping wastage. Wc%ern,Railway-Defence conwction of presumed. cxhrrete girdeta

Audit Paragraph

3.1. In the Gdhra-Ratlam doubling Project, 20 bridges were constructed with prestressed concrete girder spans. The manufacture, supply and erection of the girders (37 spans in all) was entrusted to a contractor at a cost of Rs. 8.86 lakhs. The contraceor was also responsible for the supply of the design calculations and the working drawing. The bridges were opened for goods uafllt trom October, 1958 to April, 1960 and to passenger traffic from Octohcr, 1959 to May, 1960.

3.2. Certain damages to girder ends were noticed in two of the bridges at Hadap and Panam (14 spans in all) in March, 1962 and February, 1963. Immediately speed restrictions of 8 to 10 Kmph were impdsed on both the bridges. Detailed investigations revealed that the damage was attributable to (i) absence of full contact at the girder seatjbearing plate contact surface, (ii) incorrect seating of bed plates on the bed blocks, (iii) use of softer type of coarse aggregate at or near the surface, (iv) inadequately repaired girder ends where damage had occurred during erection of the spans and (v) inadequate cover over reinforcement bars. A detailed inspection of all the prestressed concrete girders revealed that ,the defect in regard to the improper seating bf the girders on the bearing plates was found in almost all the girder ends. Speed restrictions ranging from 'Deadstop' and 8 Kmph to 50 Kmph were thereafter imposed an I3 other bridges in 1962-63. 3.3. In order to remedy the defects it was considered necessary by the technical experts to replace the steel bearings by 'elastomeric hearing pads, besides attending to some repairs immediately. While the repairs hail cost about Rs. 3 thousand, .the provisidn of elastomeric pads for one bridge (for two girders) had cost Rs. 31 thousand. 3.4. While the speed restrictions on the bridge provided with the "bearing pads and 8 other bridges had been progressively relaxeil up to 75 Kmph and up to 50 Kmph in the case of two other.bridges, the speed is still limied to 8 to 10 Kmph on the Panam and Hadap bridges (59 years after the rlefccta came to notice) thus affe Iling the pareage of trains ' on tlrc irn1mrt;mt Bombay-Delhi main line.

5.5. Similar tlele~t\wc-rc. abo noticed on the girders cqnstructed by the hdmc firm lor 3 bridges (17 girders) in the Indore-Devas-Ujjain constrhion, whilc. ou 22 girtlers constructed, also by the same iixm, in Bhildi-Raniwa+a condtruction, longitudinal baircracks were noticed even at tire time of thcir opening in April, 1958. The firm went into volunt. dry liquidation in 1962.

3.f;. 7'Iw Atlmini~tr;~tiou\t;~tc*cI (October, 1967) that the defects in the girders tor Godlira-Rntl;tm tlrmbling were attributable to certain do rig" defect9 ;~titl that, there w;ls no lack of supervision. The designs werc, howcver, cl~erkec; ant1 ;r plwoved bv the Railway Administration and the Rcscl:~rch i111t1 I)r+i~r~c0rp;ilnisation of the Railways, before the mnqtrr~ction. F~~rtltcr,chr. dcfrrts arising from launching of girders and thr wr of 4oFter :lagr(sp:ttC\ COIII~ haw hrcw ~wevcr~tcdwith atlrcli~ate supcm4sion.

11aI o 2 1-I I Ria19681.

ti.!). '1.11~ Col~~nlitccc*cl~cl~~i~.r.tl ~vhv tlie tlclrctc in co~~structionwerc not notic.et1 tluri~lgtl~e esrc~~~io~l 01' t11c work or imnlecliatc.ly there.,I f ter. 7'1~R1txnlbcr, Engineering K;til\v;l) Ho;~rdst;~tcd, "111 1957 whcn this was started, b~.itlgeswith pest^-csccd colicretc. girders was n new technology ancl tl~csc.were alnlost thC. first I>~.idges011 the Indiiln Railway. There wcrc three or fo~~rbridges buill i11 Assn'm rarlier in 1947-41 but there also it was (lone bel'orc. lndependewe a~ldaprt from them no other prestressed concrete girder bridgcs have been constructed in the country. This was the first time that this was taken up. Theiefore, both the railway engineers in rllc field, the engineers ip the Design and Research Organi- )at1011 and also tll; contractors did not have any good eexperie~ceof doing tnls w~k.Altllough the designs supplied by the contractors were checked and found to be satisfactory, since the technology was new, these facts somehow enme up only after thc bridges were built." 3.10. When asked why th contractor was selected for the work whcr he did not have such expri ce, the witness stated, "This contractor ha 1 entered into collaboration w th a foreigner Mr. Lanen whose firm had built a number ,of such bri abroad. It was, therefore, thought that tnis uew firm, a collabrationi6 between Uttam Singh Duggal and foreign hrm who had the experience woultl be ablc to do the work satisfactorilv."

3.11. In feply to a questi& whether any sl,ecial steps were taken ,to supervise the work, the witness stated. "Supervisors were there but the supervisors wkre also inexpcrienced."

3.12. The Comrpittee enquired why the experiment was taken UD when the contractors and the supervisors had no expaience. ' The witness stated, "In Lhose days steel was in short supply. We originally wanted to buy steel girders but then we had to import the entire quantity. Because this was a new technolw adopted in other countries and pecause thereby we ~ouldsave a lot of foreign exchange we went in for this."

5.13. The Committee enquired whether certain original measurements ot the bridges were not available. The witness stated, "The airder is higher at the centre and a little lower at the two ends and the difference 1s known as camber. That alone is not available. Otherwise evervthing is available." He also informed the Committee that the defects which had corm up had nothing to do with the camber measurements.

3.14. In reply to a question whether any investigation was carried out dter the defects were noticed, the witncss stated. "A joint investieat~on was carried out. It was inspected by the engineers of the railways, RDSO and, later on, the Chief Engineers, Highways, Madras and Chief Engineer, A. C. C."

3.15. In reply to a question why the defects were not rectified even 5 years after they came to notice, the witness stated, "We are trying to do our best. We really do not know exactly whether whatever we have carried out will prove successful. Therefore, we are going slow in the matter. It is a new thing and we cannot take things for granted. We had done it in one bridge and we have removed the restrictions."

3.16. When asked whether the defects were bmught to the notice of the contractor, the witness stated, "Lt was not done. The defects were noticed in the month of March, 1962 and in May, 1962 the firm went into liquidation." In reply to a question why the Government waited for two months, the witness stated, "If a girder is found defective, it takes a little time to analyse the causes." Whe witness also informed the Committee that ivhen they were trying a new technoldgy this sort of thing could happen and it would llbt be correct to hold anybody responsible for this. a 3.r7. The Committee were firrther infor d by the witness that there wbno risk involved. There was only a ques 'on of speed restriction. Al- though in this particular case, they had not etl succersful, thw had suc- cesrfully constructecl prestressed concrete hritps3 in Northern and South- cm Railways.

3.1R. The Committee desired to know thc rxtra operathnal cost to the Kailways due to slowing down of the passen& and gods trains on thcse bridges. They were informed in ;x written rrnly that rhc extra operational cost mainlv 6n .accbunt of fuel cori\umntion was Rs. 4.06.5W,rRs. 2.91.3IO antl Rs. 2.14.000 in the ycars 196.5-66. 1966-67 ant1 1W7-68 rrspectivelv. The Minist? also added, "However, thme lows arr hyppthetical and mav not actuallv accrue in practice as all trains wo~~ldnot necessarily be nrn- ning at the booked speed over these hritlges, had speed retrictions not been imposed, antl as in the case of goods trains, anv time pained bv removal oE restriction! on these bridges may not nccrssarily result in redwtion of total time taken on the enainc run tluc to detention at stations for want of path, prefcrenrc and oF room in tcrminal vards."

3.19. The Committee cnyuirctl whrther it was nossible to cam out rc- pairs to each of these bridacs and what the cost of such repairs would be. The Ministr)r in a note have stated. "Coct of repairs to thesc bridgcs will he Ks. 22.0001- This includes the cost of certite mortnr already in stock .~ncl'cost of other repairs so far carried out. This docs not, however In- cludr - (i) thc cost of jacking up thc cirtlcrs (Rq. l0,0OOl-) which in anv case would have been incurrcd for clcaninq and greasing the hearings due and (ii) an amount of Rs. 28.000)- (approximatelv) ~lrcadvspent in procurrng ncopretlc T):L~Sfor two bridges lone bridpe alreadv povided) us tn experimental measure for establishing the cuitabilitv of elastomcric hearin0 in rnilway bridges under Indian conditions."

5.20. The Committee also enquired about the cost of rc~lacingthese bridges and whether the Railwavs would accent the sneed restrictions ner- manently in case the bridnes were not replaced. The Ministrv stated, "The cost of replacement of girders of all bridges or thc Godhra Ratlam section is estimated at approximatdv Rs. 20 lakhs. Such heavy expenditure is not justified whcn repairs to the existing girders is nossihk and with these repairs existing spccd restrictions can eventually be removed."

3.21. The Committee desired to know whether the firm went into liaui- dation to escape liability for the defective exehtion of works. The Mina- ' tw stated, "It would appear that thk firm did not go into voluntary liquidation to escape liability for defective esccution of the dorks. In kt, the firm had deddcd to into voluntary liquidatim as early as May, 1962, wherels the natur of the damage to the ends of prestressed con- mete girders came to lig t only after a detailtd investigation carried out io May/June, 196$" Inr reply to a question whether legal advice was taken at any stage on the feasibility of taking action against the finn, the Minis- try have,stated in a note:r . "The Ministry of Railways are advised that. whe~a contract is under execution. it will be poqsible to prcvcnt the contractor going into liquidation by resorting to section 559 of the Indian Cornganies Act, 1956 by making an a~plicationto the Court to have the dissolution of the Company declared void. It will thus be possible to exercise this right also during the maintenance period of six months providc~lunder the existing contract in case the defects come to notice during this period. In the case under consideration, the delerts came to notice ply in March, 1962 long after the expiry of the period of main. tenanre, namely, 15-6 1960. In order to s,lfeguard against an ex- ceptional case of this nature. it would not seem advisable to extend the period of maintenance beyond the six month period provided for at present as this will have far reaching repercussions in respect of rates ctc. quoted by the firms. It would not seem to be prudent to srek to make sperial provision. bv wav of long maintenanre periods to cover such excep. tional cases." 3.22. The Committee note from the papers furnished by the Ministry of Railways that legal opinion was sought by Government only in De. cember, 1968, i.e. after this Committee's hearings. The reference made by the Ministry of Railwavs to Ministry of T,aw and the latter's reply are reproduced below: 8 Copy of W7estern Railwav letter dated 1 1-12-1968 1. Mls...... Ltd. rontractors of New Delhi were awarded a contract under Tender No. SCi221 for supplying at site and erecting in position prestressed concrete girders for various bridqes of different spanr on Go- dhra-Ratlam Section of this Railway. The tender documents along with the letter of acceptance are at pages 77 to 60c of this office file No. WC 1771 101 3/39 Vol. I (linked) the said tender was .hverned by the Western Railway's General Conditions of Contract (Revised) , a copy of which iq placed below. The Contract agreement is at pages 116A and 116B. A ropy of the contractors memorandum and articles of association is placed :~tflag 'A' of the linked Qle. 2. The contractors satisfactorily c'ompleted the above' work by 15-12- , I969 and tho maintenance period expired on 15-6-1960. During the maintenance period no defects were noticed on the prestressed 8 con&ete girden and the last dues of the contrac ~rsin respect of the above work were released on 28-10-1961. . 3. The contractors adopted a resolution oni 265-1p2 to voluntarily , liquidate their company and to wind up its affairs appointed one Shri.. : . as Honorary Liquidator. 4. 'The damage to the prestressed concrete kirders on Hadap Bridge was first reported in March '62 and defects on Panam Bridge in Jaguary 63. n 5. Legal opinion is now sought whether the contractors can be held liable for the defective work noticed after the maintename period was over and whether a suit can be.maintaincd against the successors. Shri . . . . was one of the Directors of the above company, whose address can be known. [Copy of Ministry of Law (Departrncnt ol Legal ~ffairs)Bombay, V. 0. No.. 3427168-A. V. 130m'hay dated 17-12-1 968.1 It is not clear from the referring note when the voluntary winding up proceeding terminated and when and whether the assets have been distributed. Once the company is dissolved the only action'that can be taken by any intercsted person is under Section 559 of the Companies Act 1956 by making an application to the Court to have the dissolution of the compiny declared void. Since the company stems to have adopted a Resu- lution as far back its on 26-5-1962 to voluntarily liquidate the company, it seems very doubtful whether it will be powihle to take any action under Section 559 of the Companies Act. It is not possible to say on merits whetl~crthe Railways have got a good case, particularly in view of the fact that no defects were found during the six months maintenance period. Not all the facts are available to give any categorical opinior whether the Railway Administration had a strong case to claim damages for defective work. It may not now be possible to proceed against the Ex-Director of thc Company which has gone into voluntary liquidation. 3.23. Taking note of the fact that the firm which had constructed these bridges, had also undertaken bridge construction in Indore-Dewas-Ujjain and ~hildi-~aniwirasections where defects in construction came similarly to notice, the Committee enquired when these contracts were placed. The Committeew ere i nfoimed that these contracts were placed in Septem. ber 1956, i.e, more or less simultaneously with the contractors for contracts for bridges on Godhra-Ratlam section. 3.24. With regard to the longitudinal hair cqacks in the girders on In- dore-Dewas-Ujjaip section, the Committee were informed, "Some paint has , already been applied and we do hope that perhaps its life zvould not Be affected, but it is anybody's guess. We cannot say anything definite." 3.25. ~nresponse to akwtion it ivas stated that no instructions were issued in regard t? the care to be taken during the manufacture of pres- uessed girdem consequent upon the defects noticed in the Bhildidani- bars conswjxtion. The latter were attributed to inadequate clear cover owr prestressing cables and it was therefore ensured while casting ,the girders for the Godhra-Ratlam doubling. that .the prescribed cover war maintained. 3.26. The Committee were informed that "In respect of prestressed concrete girders' on Bhildi-Raniwara construction, tracks were first noticed on 22nd April, 1958, during the mainteriance period which expired on 15th September, 1958. In respect of girders on the Indore-Dewas-Ujjain construction, the defects in respect of uneven setting of bearings were noticed only in July, 1963 after the occurrence o,f'cracks at girders seats on the girders of Godhra-Ratlam Section, when a detailed investigation of all the prestressed concrete girders was undertaken." 3.27. The Cammittee note that 13 out of 20 bridges built on the ma-Ratlam section at a cost of Rs. 5.72 lakhs developed defects within three to four years of their being opened to traffic. As a result, passenvr and goods trains had to be slowed down on thew bridges, entailiag an extra operational cast to the Railways of Rs. 9.42 lakhs during the three years ending 196748. As the extra costs will continue to recur, the Com- mittee hope early action will be taken to complete repaim to the bridges on which speed restrictions have been in existence in some form or other for the last six to seven years.

3.28. One aspect of the case calls for detailed examination by Gov- ernment. The firm which executed this work and work in other sections., where also defects came to light, went into IiGuidation in 1962. By that time some of the defects in the work had already come to notice. It is not clear why the matter was not quickly investigated and legal opinion taken om the; question whether any general damages could be claimcxl from the firm, notwithstanding the fact that by then the prescribed maintenance period (during which the contractor remained,responsihle for the work) had elapsed. In fact, legal opinion on this point was taken by Government only in December, 1968, i.e., after 'the Committee's hearings in connection with the case, and tile opinion at that stage wils that "not all facts are available to give any categorical opinion whether the Railway Administration had a strong case to claim damages for defective work*', and that, in any case "it may not now be possible" to initiate action. The Committee would like th; Railway Board to investigate why the case for claiming gen,eraI damages was not speedily processed.

3.29. The Committee note that the construction of these bridges involved the use of a new techndlogy with which the Railway engineers film the work were; not fully farpiliar. As a matter of precaution, the Railways should have-considered whether the 'maintenance period' for the work, during which the contractor wobld be liable for delecb, rhoull bave been longer than the normal period of six months. The . omivion in this respect enabled the contractor to escape liability f& defective work. The Committee hope that Government will profit by t& qperience and issue instructions to ensure that maintenand periods for works involving ncw technology are fixed in such a way as a safeg~mrd adequately Covernment'b interesur. * Western Railway-Failure of a contractor in Guna-Maksi Construction I, Project

3.30. 'l'he proposed new line between Guna and hfaksi was divided into bix rec6ons and tenders were invited for the earthwork and constlac- tioi, 01 bridges in ~und,1962. A New Delhi firm were the lowest ten- tlcrers lor both earthwork and bridge work in two of the sections. Though the firm was not on the approved list of the contractols of the Railway, the contracts were awarded to the firm at an aggregate cost of Rs. 44.75 lakhs on verification of their finaiiciai soundness arid considering their experience in developing some housing colonies in New Delhi. 3.31. The firm, however, failed in all the four contracts after carrying out work valued at Ks. 10.32 lakhs. l'he contracts were thereupon rescinded in May, 1965 and ircsl~contracts were awarded at higher rates to complete the remaining work at the risk antl cost of thc firm. The approximate extra cost to the Administration came to Ks. 19.17 lakhs against which the Administration had withheld security deposit antl dues total- ling Rs. 1.89 lakhs. Six guarantee bonds for Rs. 1,04 lakhs were, howcver, not renewed in time and the Administration had lost the opportunity of withholding that amount. 'NO other Railway or Government Depart- ment had awarded contracts to this firm.

3.32. In order to discourage big contractors from obtaining large contracts and working as middlemen by employing intermediaries and petty contractors for the actual work and in order to encourage smaller contractors locally available thereby ensuring better competitive rates, the Ministry of Railways (Railway Board) had suggested in August, 1959 and November, 1960 that; as far as practicable, the contracts for earthwork in doublings and new constructions should be limited to a value between Rs. 50 thousand and Rs. 1 lakh. The division of the work into six sections, the earthwork in each of which was estimated to cost be tween Ks. 6.2 lakhs and Rs. 13.3 lakhs, and tht award of eathwork contracts for two of'the sections at an iggregate estimated cost of Rs. 22. 4 hkhs to one contractor were not in consonance witlf' the above suggestion. [Paragraph No. 25-Audit Report (Railways), 19683. - 97- 3.33. The Committee were iirltonncd that the contractor stopped work In this case in June/July, 1964 and the contract was rescinded in May, 1965. As regards the extra cost due to the stoppage of work it was indicated that "Out of the 4 Ask conuacrs only 3 have been completed so far. Iknce ihe actual extra cost to bc iecovered frqm the contractors could not correctly assessed till IWH. For the 3 contracis already completed the extra cost against the unf~nisliedcontract, which is likely to be completed by *December, 1968, is about Rs. 3.31 lakhs. Including other sundry recoveries the total excess amount to be recovered from the contractor would thus work out to approximately Rs. 15.40 lakhs."

3.54. The Committee were further informed that .the defaulting contractors had "filed a suit in the Bornbay High Court'against the Railway for recovery of about Rs. 8.02 lakhs towards claims and arrears of psi- ment which are in their view due to them. After obtaining legal opinion, the Railway hss drticled that while defending this suit they will put in a counter claim for the entire amount due from the contractors. The Western Railway has been adviscd by the Bombay Branch of the Ministry of Law to ascertain thc exact slnount to be recovered aCter completing the four~hrisk tender and thereafter make a counter-claim against the defaulting contract as indicated above." 3.35. The Cornmiltee enquired whether the government had filed a ~ounterclaim agaillst the contractor. The witnesses stated, "The counter claim has not yet been filed, but it will be filed now. The exact iuuount which had been incurred in three zones is known; but in the fourth zone the work has not been completed and the amount is not known. Before the due date, the counter clafrn will be filed for the ihrec zones and in the fourth zone as soon a%the work is completed, it will be done."

3.36. The Coxnmittee were informed that the point raised in the suit which was filed by the contractor in May, 1967, relate4 to the wrong classification of the earth work and incorrect measurements etc. by the Kailway Administration. The witness also info~edthe Committee after that the suit was filed, the Railbays moved thc court with a plea that the case should be submitted for arbitration but the court dismissed hclr claim. When asked why no written statement was filed in the court, the representative of the Railway Board stated, "We went by the ddvice of our lawyers that the main claipu can be finalised qnly when the cantract is over, in December, 1968." He further stated that the court had not given time for filing and it was confirmed by them that the:.. Cdsc would not be prejudiced by ~t fiiing a statement. The Ministry later informed the Committee in a written note, "In connection with 'be suit filed by the contracti,r, the heilwdy's written stltanent is undex for the work. during which the contractor wo ~ldbe liable for defects, bau1d have &en longer than the normal period of rix months. The omirrton in this respect enabled the contractor to escape liability for defective work. The Committee hope that Government will profit by this qxrience and isme instructions to ensure that maintenance! perid for WMLinvolying ncw technology are fixed in such a way as a safw~ard adcyuately Covemment'b interesu. Wertcrn Railway-Failurr of a contractor in Guna-Maksi Co~truction Project .

3.30. .lkc proposed new line between Guna and hiaksi was divided iiito six beccions altd tenders were invited for the earthwork and constiuc- tion of bridges in ~un;, 1962. A New L)eltii firm were the lowest ten- dcrers lor both earthwork arid blidge work in two of the sections. Though the firm was not on tht: approvcd libt of tlie contractols of the Railway, the contracts wcre awartlcd to tlie firm at an aggregate cost of Rs. 44.75 1;zlrhs on verification of their finailcia1 soundnesb arid considering their experience in developing some housing colonies in New Delhi. 3.31. l'hc firm, however, failcd iri all the four contracts after carrying out work valued at Ks. 10.32 lakhs. l'lle contracts were thereupon rrs- ci~idedin hlay, 1965 and Ircsh colitracts were awarded at higher rates to complete the remaitling work at the risk and cost of thc firm. The approximate extra cost to the Administration came LO Ks. 19.47 lakhs against which the Admiliistra~ioll had withheld security deposit and dues total- ling Rs. 1.89 lakhs. Six guarantee bonds for Rs. 1,04 lakhs were, howcver, not renewed it] time and the Administration had lost the opportunity of withholding that amount. 'No other Railway or Government Depart- ment had awarded contracts to this firm. 3.32. In order to discourage big contractors from obtaining large contracts and working as middlemen by employing intermediaries and petty contractors for c he actual work and in order to encourage smaller contractors locally available thereby ensuring better competitive rates, the Ministry of Railways (Railway Board) had suggested in August, 1959 and November, 1960 that; as far as practicable, the contracts for earthwork in doublings and new constructions should be limited to a value between Rs. 50 thousand and Rs. 1 lakh. The division of the work into six sections, the earthwork in each of which was estimated to cost between Rs. 6.2 lakhs and Rs. 13.3 lakhs, and the award of eathwork con- Lracts for two of'the sections at an Aggregate estimated cost of Rs. 22. 4 ' hkhs to one contractor were not in consonance witH the above suggestion. [Paragraph No. 25-Audit Report (Railways), 19681. 0 91. 3.33. The Gommittee were ~nformcdthat the contractur sioppd work in this case in June/July, 196-4 and the contract was rescinded in May, 1965. As re@ the extra cost due to the stoppage of work it was indi. cated that * "Out of the 4 Ask contracts only 3 have been completed so far. Fence the actual extra cost to be 1 et-oveled fr~mthe contractors could not be correctly assessed till lion. For the 3 contracis already completed the extra cost against the unimislled contract, which is likely to be completed by December, 1968, is about Rs. 3.31, lakhs. Including other sundry recoveries the total excess amount to be recovered from rlw contractor would t!lus work out to approximately Rs. 15.40 lakhs."

3.34. The Committee were further informed that .the defaulting contractors had "filed a suit in the Boliibay High Court*against the Railway for recovery of about Rs. 8.02 lakhs towards claims and arrears of pay: ment which are in their view due to them. After obtaining legal opinion, the Kaihvriy has dt~itled that ~hiledefending this suit they will put in a counter claim for the entire amount due from the contractors. The Western Railway Ius Lcen adviwd by the Uombay Branch of thc hlinistry of Law to ascertain the exact alnount to be recovered alter completing the fourth risk tender and thereaiter make a counter-claim against the defaulting contract as indicated above." 3.35. The C;ommittcc enquired whether the government had filed a counter claim against the contractor. The u71tnesses slated, "?'he counter claim has not yet becn filed, but it will be filed now. The exact amount which had been incurred in three zones is known; but in the fourth zone the work has not bcen compleLed and the amount is not known. Before the due date, the countcr clah will be filcd for the three zones and in the fourth zone as soon as the work is completed, it will be done."

2.36. The Committee were informed that the point raised in the suit which was filed by the contractor in May, 1967, relate4 to the wrong classification of the earth wolk and incorrect nleasurements etc. by thc Railway Administration. The witness also infoamed the Committee after that the suit was filed, the Railtuayq moved the court with a plea that the case should be submitted for arbitration but the court dismissed their claim. When asked why no written statement was filed in the court, the representative of $he Railway Board stated, "We went by the advice of our lawyers that the main claims can be finalised ply when the contract is over, in December, 1968." He further stated that the court had not given time for filing and it was confirmed by them that thei. case would not be prejudiced by wt fiiing a statement. The Ministry later informed the Committee in a written note, "In connection with the suit filed by the contracttr, the Railwily's written statement is under compilation. The Lase has trot yet been taken. up py the (hurt. Accord- ing w the advice of the Solicitor to the Central Government, this is a long cause suit and may not be taken up in lM8 or even in 1969."

' 3.37. The Cornrnittce cnyuiretl why there was delay in r&inding the contract. The Ministry in a note stated: "The conlractors stoppcrl thc work in June, 1964, one of the reasons being the onset of monsoon. They represented to the then Et~gineer-in-Chief(C:),Kota in September, 1964, that they had not been paid lor the lull quantity of work done by them. The whole question was then examined by the Railway and a reply was sent to the cor1tr;tctors in October, 1964, incorporat- ing 7 days' notice in terms 01' Clause 61 of the General Condi- tions of Contr;tct, as the contratmrs did not start the work after Monsoon. 'J'llc contractors thereafter submitted a peti- tion to the R;I~~w~I);Aclrninistratio~~ ill November, 1964, for settling thc clisj~utcs. 'I"11e matter was discussed by the Chiel Engineer (Swvey 8c Constrwtion) with the contractors in Dec- mmbcr, 1964, ;III~ it was tlrciclccl that re-assessment and re- measurement including classifica~io~lof all works done by the corrtr;ictors 011 c;trtI~~ork;tnd bridgrs should be carried out in tlw presence of the c.ontr;~ctors. Acc.ortlitigly, re-assessment of thc work done by the contractors ;rgainst. all the four contracts was carried OUL 11-oln Jan~uryto A~nil,1965, as a result oE which it was obse~.vcdthat an amount ol' about Rs. 90.000/- was payable to the (,ontractors against all the four contracts, in addition io the payments nlreaciy made to the contractors. No payment. could Ilowever be ndc to he contractors as they did not renew the lapsed guarantee bonds. The contractors did not also start the work, and the Railway was com- pelled to terminate the contracls in May. 1965." 3.38. The Committee pointed out that some of the guarantee bonds given by the contractor had lapsed and enquired how this situation arose. The Ministry of ~ahwa~sin a note have furnished the following information:

"S.-- No. Date of the Guarantee Bond Value Date of expiry I 8-1a1g63 . , 20,000 7-9- r yG4 < 2 8-1-1963 . I 20,000 A 7-9-1964 3 8-1-1963 . 9~0 7-7-1964 4 8-1-1963 . :. IO,OOO 7-7-1964 5 8-1-1963 . eL . 239900 1-11-1964 6 8-1-1963 . . . '21,000 1-11-1964" 3.39. In reply to& question whether any responsibility had been fixed for not renewing the Guarantee Bonds, the witness stated that a Senior Accounts Officer and an Exerutive Engineer were charge sheeted for dereliction of duty. A departnlental inquiry by the Commissioner for bepartmental Inquiries had been completed, and the Omcers had LKen asked to furnish their final defence by 10-12-1968. Atter their final defence was received, a report would be submitted by the Commissioner for Departmental Inquiries.

3.40. The Committee enquired why the Acinlinistration considered that a firm experiencd in developing Housing Colonies were capable ot executing earth work and bridge work for the Railways. The witness stated, "This line was given a low priority and his tender was very much lower than the other contractors. They had hot carried out any railway work before. It was a calculated risk taken by the Kailways. The works in other Zones were also let out to such contractors who did not have adequate experience. They have been successtully carrying out the work. This is the only contractor who failed."

3.41. In reply to a quesiion why the contract was placed on one contractor against the instructions issued by the Railway Board, the witness stated, "The limit was Ks. 50,000 to Ks. 1,00,000. That was the instruction issued in 1959. But soon after it was found to be unworkable. Because it was not possible to let out one small lengths such as one or two fur- longs to different contractors." 3.42. In reply to a query, the witness stated, "When we invite open tenders for work, we do not go by the approved list. Any contractor can quote if he has the requisite experience! and is able to produce creden- tials." 3.43. The Committee note that the extra expenditure recoverable by the Railways from the contractor in this case (which is still to be exactly assessed has become the subject-matter of a suit filed in court. They would, therefore, like to reserve their comments at this stage pending the outcome of the suit. One aspect of the case, however, calls for comment. Certain bonds of the value of.Rs. 1.03 lalihs furnished by the contractor as guarantee for his performance under the contract were allowed to lapse. The Committee would like the disciplinary proceedings started against the defaulting officials in this connection to be expeditiously finalised.

Northern Railway-Avoidable extra expenditure in the construction of J 0 gang quarters

Audit Paragraph 3.44. A contract fpr the constryction of 19 gang quarters in Lucknow- Sultanpur-Zafrabad section of Lucknow Division at an estimated cost of Rr 1.9 lalrh, wiu awarded ir~Ma), 1959 stipulati;lg cowpletion by the 80th September, IW. The accepted rates were 40 per cent and 24.5 per cent above the .Schedule of Rates for woocl work and other items re,- pectively. 111 spite of the gr'111t of two csxtrncionu (first upro 30th ,June, 1961 and then upto 3lst December, 1961) the contractor could complete only 9 gang quarferb mainly clue to difl~cultiesin procurement of ,bricks. His request for Iurtl~crextension upto 30th June, 19G2 was not accepted, htno notice for ternination of the contract was served on him.

3.45. Fresh tenders lot the renlainmg work were invited ill Jarluar). 1Yti2, but, a9 the rates oflered were very high, tenders were reinvitcd after a lapse of 10 months, in November, 1962. The original wntractor was also asked' in ~ebruah,1963, to intimate his willingness to complete the work at the rates already tendered by him. The contractor in reply requested for increase in raws, change in the site of some of the quarters, change in specification from surkhi to cement and extension for coniple. tion of work upto 3 1st December, 1964. A fresh contract w~thanother contractor was finalised on the 27th May, 1963, alter negotiations, at 95 per cent and GS per cent above thc Schcdulc of Rates for wood work and other items of work respectively, though, mcanwhile, the existing contractor had delivered a letter, on 25th 1963, indicat~nghis willingness to complete tile remaining job at his original rates. It may be mentiou- ed that the new contractor was allowed change in the site of 3 quarters and to use cernent in place of s~lrkhi.

5.46. In June, 1963, when he Railway Administration infornled the original contractor about his liability for extra expenditure likely to be incurred in getting the work cbmpleted, he demanded arbitration. The arbitrator was appointed in September, 1964. Against Railway Adminis- tration's claim of Rs. 42,978 on account of exlra expenditure the contractor demanded full and final settlement of his contract on payment of Rs. 38,033 and disputed Railway Administration's claims for the payment on the grounds of inordinate delay in the finalisation of the tenders for getting the remaining work done by another agency, failure of the Administration in not terminating the contractor belore letting out n uew contract and his willingness to complete the work at the rates. The arbitrator set aside the Railway's claims and awarded payment of a sum of Rs. 34,975 to the contractor in full and final settlement of all the claims. 6

'3.47. The ~dmin'istrationstated (~ugust,1967) that a letter addressed to the old contractor on 30th November, 1961, refusing extensiok of time upto 30th June, 1962, constituted a notice pE termination. Since the Administration themselves had again asked the contractor in February, 1963 to intimate his willingness to tomplete the. work, the letter dated 30th November. 1461 cod d not have ken construed as a notice of tmi- . nation.. 3.48. If the earlier contract had been terminated with proper notice at the dme of entering into a fresh contract, the Administration would havt been on stronger grounds to press their clain~sfor rhe recovery ot extra expenditure amounting to Rs. 43 thousand. [Paragraph No. 26, Audit Report (Railwa~s),19681. s 3.49. The Committee noted that the arbitrator's award went against the Railways for three reasons: (i) Failure of the Railways to terminate tbe first contract before a new contract was concluded for completio~~of the unfinished work : (ii) Delay in finalising the tenders for the new contract; (iii) The willingness of the first contractor to complete the work. 3.50. Taking up the question of failure of the Railways to serve formal termination notice on the first contractor, the Committee enquired whether the contract contained any provision for works left incomplete hy the contractor being completed at his risk and cost and if such a provision existed, why it was not resorted to. The Ministry of Railways have ~tated: "The contract in question is covered by the No~thernRailway 'General Conditions of Contract Regulations and Instructions for Tendercrs and Standard Form of Contract, 1956'. In terms of Clause 17 (iv) read with clausk 62 of these General Condi- tlons of Contract, the Railway was entitled to carry out the balance work through alternative agency and to recover the extra cost incurred in compleiing the balance work from the original contractor.

Action was taken by the Railway Administration LO get the work completed by an alternative agency.and to recover the extra cost incurred from the original contractor. 'The original contractor, however, took the matter to arbitration. The Mi- rrator unfortunately set aside the Railway's claim for recovery of extra cost from the original contractor. C T'he Railway had sanctioned-the extension of completion date ot t&e contract upto 31.12.61 only and under their letter datedo 24th July, 1961 had advised the contractor to arrange to complete the work in allarespects by 31.12.61 failing which appre prlate penalties would be imposed. Again on 80th Novanber, 1961, Railways had advised the cor~ut\czorthat no more at- won would be given and that the work sh~uldbe completed by 3 1st December, 1'36 1 failing which appropriate penaltie would be imposed as per rules. The Railway Administratum considered the issue of letters dad 24th July, k361 and 3 1.11.61 au, constituting a notice of termination of the contract." b 3.51. The Committee enquired why, if it was the intention of the Rail- ways to terminate the contract, notice of termination was not formally served in terms of clause 62 (i) ,(xii) (a) of the General Conditions of the contract. The Ministry of Railways have replied: "Nan-issue of rescission notice as required under clause 62 (i) (xii) (a) of the 'General Conditions of Contract was a regrettable omission. It may, however, be pointed out that same clause 62 (i) of the General Conditions of Contract includes the following provision also:- 'Provided always that in any case in which any of the powers conferred upon the Railway by sub-clause (1) of Clause 62 hereof shall have become exercisable and the same shall not be exercised, thc non-exercise thereof shall not constitute a waiver of any of the conditions hereof and such powers shall notwithstanding be cxercisable in the event of any future case of default by the Contractor for which his liability for past and future shall remain unaffected'. It is, therefore, felt that in view of the above provision, non-issue of rescission notice alone should not invalidate the Railway's claim for recovery of damages." t R.52. Taking note of the delay in finalising tenders for the new contract awarded for the work left unfinished by the first contractor, the Committee asked what the reasons for the delay were. The Railway Board have stated that "the delay.. . . was partly on account of the time taken by the IXviskn in examining the contractor's liability, best possible manner of getting th? balance work completed and partIy due to clerical delays." The Committee were $so provided with a chronological statement of events in the case between 29th January, 1962, when the tenders were opened and 9th November, 1962, when fresh tenders were again called. The statement reads as follows: "29-1-62-Fresh tenders for ayarding remainingc work to another contractor were opened. These were cancelled as the rates received were very high, i.e., 75 per cent above S~R.

3 1.3.62-As the fresh tenders were 'called for without giving termination notices to the defaulting contractor, DEN referred the matter to DAO, for his views in regard to levy of penalty. e 18.4.62-DAO advi&l DEN that final notice should be issued to the defaulting ontractor,. in consultation with L.O. and in case that couldr not be done, excess payment would have to be got regularised.

21.4.62rDS Office put up case LO DEN (I) for orders. * C& mixed up with other papers and no further progrese was 0 made in calling fresh tenders.

20.8.62-Case was traced lying with Drawing Branch. L 20.8.62-DEN, replies to DAO's note of 18-4-62 and enquired of DAO in view of the position as. it stood what action could be taken against the contractor. He opined that at the most Security money could be forfeited. 10.9.62-DAO advised DEN for taking actim under Clause 62 (1) (4 (b) (4 . 14.9.62-DEN ordered works Accountant to put up case for forfei- ture of Security money of the contractor. 26.9.62-DS Office put up case to DEN for orders about recovery of risk cost from the defaulting contractor and for calling, fresh tenders. 1.10.62-Decision taken for calling tenders for completing remaining work. 9.11-62-Fresh tenders were again invited and opened."

3.53. The Committee enquired why the first contractor's offer to complete the work was not availed of and his requests for increase in rate and change in site were not acceded to, when'the Railway Administration made these concessions to the new contractor. In their reply, the Minis- try of Railways have stated: "The offer to the original contractor to complete the remaining work was made on the specific condition that he would be wil- ling to do it at his original rates, terms and conditions. He however, offered to complete the work at enhanced rates and fresh terms and conditiws as indicated below: 1. His rates would be Rs. 76 per cent and 46 per cent above SOR against his original rates of Rs. 40 per cent and 24.5 per cent above SORIfor wood-work and other items respectively; 2. Gang huts should be located within station's.sites; * 0 3. Brick work should be done in cement instead of Surkhi Lime; 4. hue of priority order for supply of lragons of building materials not locally available; i 5. Departmental material like rails, asbestoes, cement, paint etc. shoulcl be supplied at site of work: C 6. Yrioritv lor c.oal dust ~houldbe issued in advance: * * '7. Final bill should be prepared for each gang hut and not com- hinctl with other gang huts: ant1

H. Extension of period of completion of the work should be given upto 31-12-1964.

It was not intended to negotia;e any higher rates and fresh terms of contract with the original contractor. The rase of fresh contract awarded to all alternative agency was on a different footing inasmuch as it was intended to &cover thc axtra cost from the original contract. Apart from the. above even in the care of fresh contract, the sites of all gang huts were not changed and brought to stations at demanded by the original contractor. In case of frcsh contract, out of 10 gang huts the site of one gang hut only was altered and brought to the station. In respect of other gaq huts, only minor changes in the original site were made with a view to reduce the cost of foundation."

3.54. The Committee note that there was a "regrettable omission" on the part of the Railways to serve notice of termination on a contractor before letting out the portions of work left incomplete bv him to a new contractor. The award of the work to the new contractor itself was delayed due to this omission and the "clerical delays" that occurred. In the result, the Railways had not only to forfeit their claim for a sum bf Rs. 42,978, being the extra expenditure incurred on getting the unfinished work completed by the new!contractor, but were also obliged to pay the contractor a sum of Rs. 34,975. 3.55. The Committee would like the Railways to investigate the circumstances in which these various lapses occurred and take appropridte act ion. IJTILISATION 01: ASSETS

So~rthEastern Railwav-Additional facilities at Tatanagar and Adityapur * .

0 Audit Paragraph

4.1. It1 orter to deal with the additional traffic on account of TISCO's expansion programme for increased production 'of steel from three quar- !(.I. millio~ito:~$ per year by June, 1!).58', tlie South Eastern Railway Ad- ininistration llndertook a scheme, tluring the Second Five Year Plan, for providing additional facilities at Tatanagar and, Atlityapur Yards, at an rstimate~lcost of Rs. 2.23 crores. The abstract estimate sanctioned by the hlinistry of Railways (Railway Board) in January, 1958 prdvided lr~r65 lakll cft. oE earthwork assessed on n rough calculation. Based 0x1 .~ctualsurI9ey undertaken subsequently a revised abstract estimate for Ks. 1.71 crores providing 167 Iakh cft. of earthwork, including 66 lakh cft. requiretl for regarding was sanctioned ill October, 1961. During execution of the work, the was further rrvisetl providing a hun~pin the yard, extension of length of the lines in the Marsliallirlg Yards etc., and a second revised abstract estimate for Rs. 1.45 crores pr&icling 243 lakh cft. of earthwork w;is sent to the Ministry nf Knilwavs (Railway Board) in March. 1967.

4.2. 'The origiiial abslrac i estiinate of 1957, the revised abstract ehti- inate of 1960, and the secontl revivtl abstract estimate sent to the Rail- way Board in March, 1967, were all prepared to deal with the same additional traffic resulting from the expan5ion programme of TISCO. There had been no increasc in the trafic forecaits which necessitated revision of e?tirnates from timr to time. It i~,unclerstoocl that TTSCO have alro 710 further expansion programme till 1972-73.

4.3. Further, according to the original plan the yard was to be regard- ed to 1 in 400 but 66 lakh cft. earthwork required for this regarding was omitted to be included in the original abstract estimate of 1957. This quantity was subsequently ipcluded in rhe first revised abstract estimate of 1960.

4.4. The first contracl for 101 lakh cft. ol earthwork was awarded to a contractor in July, 1958. He had executed about 86 lakh cft. of earthwork by the middle of 1959 and no further progress could be made due 'a 9 105 108 lo non-hvailabiiity of land. The Adminitration arded fresh contracts horn time to time to three other contractors at rates resulting in extra expenditure of Ks. 4.46 lakhs.

4.5. Thus, inadequate planning and inaccurate estimation of the physical requirements resilltcti in the cost of the work being almost doubled and the garthwork increasing by about 274 per cent.

4.6. The Ministq of Railway+ (Railway Board) to whom the second revised estimate was sulmitted in hfarch, 1967, decidxi in October, 1967 that the scope of the work should be brought clown to the extent possible.

[Paragraph 28-Audit Report (Railways) , 7'3681. . 4.7: Noting the [act that the scheme for expansion of the yards at Tatanagar and Atlityapur underwent several changes from time to time, the Committee enquired what exactly was the scope of the facilities planned in these yards at various stages. The information on this point furnished by the Ministry of Railways is tnbulittecl below:

Capacity of the yards Tatanagar Adityapur

,'i) Before additional facilities were provided in 1957 . 1718 360 (ii) as per original estimate prepared in 1957 . *Net I ISO 8 available (iii) as per first revised estimate of 1951 2530 I 180

(iv) as per the 2nd revised estimate of 1967-68 . 3135 I295

Cost of work as per original estimate prepared in 1957 . Rs. 2,22,60,000 as px first revised estim~teof 1951 . Rs. 2,69,38,503 (net) Rs. 2,70,91,500 (gross) as per the 2nd revised estimate of 1967-68 . Rs. 3,79,45,978 (net) c Rs. 3,94m7978(gross)

A- 'The relevant plan has been mis-laid. 107 4.8. The Committee des ed to know the reasons br which the cost of the work doubied and t Xe earthwork went up by 274 per cent. The h1inisu-y in a note stated:

h he original plan 'prepared in 1957 for which an abstract tsti- mate amounting to Rs. 2.23 crores was submittedsby the Rail- Gay was prepared without a detailed survey in view of the urgency with which the work had to be started and additional facilitks provided in time to deal with. the increased traffic anticipated consequent on the expansion programme of the TISCO. TlSCO had at that time indicated that their expansion programme will be completed by June, 1958." . "Subsequently in 1958, when a detailed survey was carried out it was found that the quantity of earthwork included in the original estimate (65 lakhs cft.) was very much on the low side and the quantity actually required was 101 lakhs cft. Subse- quently in 1959, it was decided to regrade the yard to 1 in 400. This involved an additional quantity of 66 lakhs cft. The revised estimate sanctioned in 1961 at a cost of Rs. 2.71 crores included provision for the increased quantity of 167 lakhs cft. of earthwork and some minor changes in other items which were considered necessary.

"When the work as per the revised estimate was in progress, in 1961, the Railway Administration decided that the Marshalling yard should be converted into a hqmp yard, to enable it to deal with the large number of wagons which will have to be sorted out and marshalled in the yard. Besides the expansion of TISCO, the Tatanagar yard had to deal with the traffic from 8 other subsidiary industries which had also their own expansion programme. With the additional traffic generated by these industries, Tatanagar was expected .to deal with a total number of 1200 wagons per day, excluding through trains. The original plan of 1957 or the revised plan of 1960- 61 did not provide for a hump. It was also decided in 1961- 62 to extend the lengths of all the lines in the main as well as marshalling yards to hold 70 vehicles, consequent on the electrification o< the section and running of longer trains The original plan provided for 60 wagon li.nes only. Thc proyision of a hump and the extension of the lines to 70 vehicles resulted in a further increase of 63 lakhs cft. in the earthwork. Later in 1964 it was decided by the Board to mechanist the hurn]~yat-t1 and prqrirle retarders. This meant iurther raisir~g of the hump and consequent regarding and, extenrion of the line9 to provide retarders and ;in adtiitiorlal quantity of e:~rthwork of 28 lakh cft. was i~lvolved in this * prcH'e5s. 'I'hc' total quantity or eirrrhwork as incluckd in tl~ srcontl re\.icctl cstimate since submittetl by the Kailwap ihus comes to' 167 + 53 + 28 lakhs tit.-2.18 lakhs cft. . "111 ordirr to (leal with' thc atltlitional traffic consequent on the cxl);i~"or~01 the subsidiary intlustrics, it was found essential to ~~rovicle5 ;rdditional sorting lines in the marshalling yard. . I'ro\~isio~i1'01. this also hiis hcen inclutled in the second re- vim1 estim;~tc."

l'he work which with startctl ill 1958 is still not c.onlpleted awl i~ is expected to be completed only by end ol 1%8. The remodelling of the Tatinagar yartl % ol' ;in extremely complicated nature involving the regartling and extension of the misting lines without interfering with the day-to-(lay traffic. The work h;is, therefore, necessarily to be taken LI~in convenient stages to avoid interference with the traffic. Almost the entire yard is in a deep cutting. This invol\~sf~~rther con~plications and difficulties in the execution of the job. The work had. therefore, to necessarily drag on for a considerably long period, nearly 10 years, during which period the cost oE materials and labour had up appreciably. The second revised estimate submitted by the Railway recently amounts to Rs. 3.79 crores net. Considering the lam as explained above the increase in cost from 2.23 crores in 1958 to Rs. 3.7!) crores in IN8 is not unreasonable. It may also bc mentioned in this connection that Tatanagar yard as now remodelled will be adequate to deal with a maximum number of 2220 wagons and hence no further expatpion of the yard would be necessary.in the near future."

c A statement showing requirements in terms of wagons for TISCO and other subsidiary industries horn 1957-58 to 1967-68 and the actual traffic that was generated, received from the Ministry is at Appendix I. Ac- cording to the statement the figures d the estimated requirements for TISCO excluding slihsidiar~intlustrics a11d ilw :~ctualtraffic from 1957-58 von~ardsare as follows:-

An~icipateddaily Actual daily average requirement average traffic * Yep in terms of 4-wheel- generated in terms er wagons (inward of 4-wheeler wagons a!~doutward) (inward & outward) - --. - --

1957-58 . 920 Not available

With regard to the traffic of other subsidiary Industries, the Ministry stated, "No forecast inward and outward traffic ol' thc subsidiary industries for all the years from 1957-58 to 1967-68 was received. It was, however, anticipated that there would be an increase of 45 inward a~~d37 o~~~wardtraffic during the Jrtl Plan period due to the' proposed expiu1- sion of some of the subsidiary ilitluatries, which has not yet materialisetl." 4.9. The Committee enquired as fo when the traffic at Tatanagar and Adityapur yards would come upto the level of 2,220 wagons for which capacity had been developed in these yards. They were informed that the traffic at Tatanagar alqne was expected to reach the level of handling 2,220 wagons daily by 1W0-71. , 4.10. The Committe note that the expansion scheme of Tata Iron and Steel Company, to which the development of these yards, was linked was taken up as part of the Sccond Five Year Plan from the Annual 110 4 f reporb of the Department of Steel; the Committee observe that this expansion scheme was largely completed during11959-60. A rated production of 1.5 million tonnes of saleable steel which the company was sqgk- ing to achieve was reached in 1964-65. The latest annual report of the Department of Steel gives the following picturp in regard io t?e production *plans of this enterprise:

I "TISCO at present has a capacity of about 2 million ingot tonnes. In terms of saleable steel, TlSCO are manufacturing about 1.5 million tonnes per year over a wide range of items like bloonis, billets, bars, structurals, sheets, skelp, etc. To maintain this led of production, they are presently engaged in adding certain balancing facilities like mine development and, ore benefication, self-fluxing sinter additional facilities for shops etc. They also contemplate additional coal production and proposals for this are under consideration."

4.1 1. The Committee cannot help feeling that the work on augmenting the facilities in Tatanagar and Adityapur has not been processed in a very businesslike manner. The work was undertaken, on considerations of urgency, without any survey, to deal with increased traffic expected out of the expansion of the Iron and Steel industry located at Jamshedpur. However, though the expansion of that industry got under way in 1964 65, the; work on the remodelling oE the yards is still in progress after ten years. Due to the fact that a survey was not conducted, the cost of the work underwent revision after Elurveys from Rs. 2.22 crores to Rs. 3.94 crores.

4.12. The Committee note that the scope of the work on these yards, as contemplated in the lath estimate for the work, provides for the Tala- nagar yard handling about 3,135 wagons as against which the actual trac that has materialised so far has been of the order of 1,100 to 1,200 wagons. As the expansion plans of the industry in this area, to which this scheme was mainly geared, were completed as far back as 1964-65, it calls for examination whether the acope of the work needs pruning.

Northea~tFrontier Railway-avoidable remodelling of yards at Siliguri and Alburduar

Audit Paragraph 4.13. The remodelling of Siliguri and Alipyrduar yards was sanctioned in March, 1962, as part of the sch,eme for providing Centralised Traffic Control on Siliguri-Alipurduar-Chengsarisection of the qortheast Fron- tier Railway. Although the two yards had just then been remodelled to 111 I $ cope with in& aaffic needs, it was considered necessary to remodel them further to cater to the vatfic leire1 of 7M-wagons (M. G.) per day . east of Siliguri expected to be reached on complethn of the Centralised Traffic Control. The level of traffic handled before the actual rommen- cement of the remodelling was 413.7 wagons per day, the peak having been reached in March,'1963 at a level of 543 wagons. 414. In September, 1963, it was decided to shift part .of Centralised Traffic Cdntrol Scheme to the North Eastern Railway and confine it to Bongaigaon Chengsari section as, with the extension of B. G. line upto Bongaigaon and consequent diversion of traffic from Metre to Broad Gauge, the level df M. G. traffic was not expected to exceed 5501600 wagons per day. The Administration was instructed by the Railway Board even earlier, in June, 1963, to stop all further works connected with the C.T.C. as its transfer was under conter$ation. Nevertheless. the remodelling of Alipurduar (commenced in May, 1963) and Siliguri (commenced in August, 1963), to deal with a level of 750 wagons per day, were proceeded with. Specific instructions of the Railway Board in August, 1964 to curtail the scope of the work to a level of 5501575 M. G. wagons per day had also been ignored and the remodelling of Alipurduar and Siliguri yards was completecl in March, 1964 and August, 1965 respectively.

4.15. ~~ainstthe initial provision (January, 1963) of Rs. 43.20 lakhs the actual expenditure was Rs. 84.45 lakhs (Rs. 413.96 lakhs for Silipri and Rs. 40.49 lakhs for Alipurduar), for which the Railwav Board had accorded post facto sanction in August, 1966, no sanction to any estimate for these works having been given by them earlier. 4.16. The actual traffic handled in these yards was far below 750 wagons (M .G.) per day and the number of wagons dealt with after the completion of the Broad Gauge line in May, 1965 never exceeded 500 wagons per day. On the other hand, the average detention to wagons at Silipri Junction (for which statistics are available) increased from 17.4 hours in 1963-64 to 22.6 hours in 1965-66 and 22.0 hours in 1966-67.

4.17. Thus, the failure of the Administration to take into acco~intthe known impact of the new Broad Gauge rme on Metre Gauge traffic and to stop the subsidiam works when the principal work had alreadv been transferred resulted in avoidable capital exnenditure of Rs. 84.45 lakhs of which safetv works on electrical and electro-mech~nical signalling accounted for Rs. 21.12 lakhs.

4.18. The Administration stated (February, 1968) that the real test of' traftic in the strategically vulnerable points would be during periods of emergency and the facilities sh'ould, therefore, not be considered on the 4 a Iiberal sidc. it may be mentioned that the number of wagons dealt with at Siliprr i in Scptcmbcr, 1965 war also less than 500 wagons per day. [P;rra~rar,h No. 29-Auciit Reprt (Railways) . lW8]. .

4.1 !I. .l'Ilc (;or~~tnit1.c~ were inf'ormetl that the first remodelling of the Silipwi v;rrtl wirs takt~~U~J in 1957-58 anrl completed in September, 1961 at a c,osr of Rt. 16.88 lakl~s. '1-11c f;ic.ilities proposetl in the yarcf were intcl~tlrtlIO cl'r;rj wiih i~pl~rosirnately960 wagon, per clay east rof Siligliri. Tl~cwol.k of' fin1 rclr~otlellir~~of the other ),arc1 at Alipurduar was taken "1) in 1957-58 ;rtitl r~>mplctetIill Arlgtrst, 1962 ;it a cost of Rs. 17.50 lakhs. '1.1~8 ;~~lditionirlk1cilir;'es prol?osed were intended to dral with a level of rr;tfir or 360 wpns per d;rv c9;i\t of Silipri.

1.20. The Cornmit!re pointctl out that, though the first remodelling was, in the view ol the R:rilw;lv\ intended to arcommotlate a load of 560 wagons a day the ;ICLII;I~ traffic Ii;tntllet1 amounted to 413.7 wagon a dav and the peak-traffic to 545 w;rgor~\ ;I day. The Member (Engineering) stated that "This traffic was carried for mme period with difficultv" and roiilrl not h;we been carrietl on ;ill he time rhat was whv the second remodelling of the vartls hecame nrceswry.

4.21. Taking 1111 tlic qrledon or second retnodelling the Committee cnquiretl why, in spite of \lwcific instructions given by the Roard to the Railwav Atlmii~istr;riion in Turlc, 1963, the work was proceeded with. The 4dditional Member (Work,) ~tatctlthat the neressitv for this remodellinp was not in tloubt The- R:lilw,r\ Roatd did ronsider remotlellin~to be necessary. Thev tl~oughtthat tlic scone of the rernotlellinq should be confined to handlinc n tr5ffic or 550-575 metre p.nuac wagons per dav. There was a scheme for introtluction of rentraliscd tr:+ffic control, but it was later decided that this scheme need not be carried out on the Siliwri- 4lini1rdiiar section The main re:lson for this wa9 the e-itemion of the Rrmd Gauge line 1113to Ronqaigaon: as a result the centralised Tr:lffic '+heme was reqtrictcd to Cliet~gssari-Ronqaie:aonsection. The Railway Ronrcl thouqht t11.11.witlio~~t Ccntr:rlisetl T1;tffic Control. the line canacitv Iwvond Silig-uri would be limitrd and the vards need not be remodellecl for liantllinp more than 550-575 wahons. The Railwav Administration on the other hand. thou~htthat ro i~tilisethe CTC canacitv created unto Ronrzai~ann,there, will he "need to brin~a minimum of 500 M. Cr. wagons to Ron~aieaon~lin the Metre C~IIP~route eyt OF Silimri Tlinction." ?\linther 200 wncons ro~lldh~ "s:tfr]v mtimated as the reni~irement~of roadside stations of the Silimlri-Ronsai~aon area." On tPis hasis thev considered an "estimate of 700 M. C,. wqvons nrr dav east ol Siliqw-i a wIV ~.r;lWnalh=ant1 morlmt ns\umptiop '' 4.22. The Committee drew attention to the fact that the anticipated traffic had never been reached; on the' other hand, the daily average of *the number of wagons dealt with, after the second remodelling was 500 which was less than the peat. traffic before this remodelling. The Member (Engineering) stated that. with- the extension of the Broad Gauge line to Bongaigaon. the traffic d;d go down, but "it is again picking up." -He expl~iqdfurther that before the broad gaugr line waS extended and the vnrd remoclBled, traffic booking in Assam was restricted. "Now there is no such restriction" arid the remcdelling that had been carried out would come in handy. The witness further stated that the number of wagons lia~ldled in 1968 was higher tli;111 in the previous year and went upto 526. In reply to a question whether the peak c~pii~ityof 700 wagons per clay which was planned for had ever been reached, he stated that "it had not been reached so far." To a firrther questiott whether Ft would ever be reached. the witnms stated. "It mav not he reached: perhaps it (the traffic) mav go upto 600 or $0 on an average." Jn reply to a further question. the witnes\ stated that the traffic "will go up, but I am not sure ;11>out the number."

4.23. The Committee cnquirecl what benefit had accrued from the secorit! remodelling. The Rlernber (Engineering) stated that "the average speed of trains east af Siliguri increased from 12 Km. to 15 Km." The Committee pointed out that after remodelling the average detention of wagons at Siliguri had artuallv increased, as stated in the Audit para- ~rapli. The witne5s explaining the position statcd that the Railways were forming block loads to go to a lone east to Gauhati. These loads were formed in this yard with the result that detention increased.

I -1.24. The Committee enquired whether considering that the wagon t~ affic had failed to materialise and the period of detention had actually increased, it could be said that the expenditure of Rs. 44 lakhs on Siliguri \,~rdremodelling and Rs. 41 lakhs on the remodelling of the other yard ,it Alipurduar wa\ justified. The Chairman, Railway .Board replied: "Looking at the case I feel that the General Manager could have erred on the side of caution and in view of the B. G. line coming he should not have proceeded with Alipurduar ahd Siliguri remodelling . Even if wme commitments had been made, he should have stopped at the level which he could have possibly stopped." The Committee enquired how much of expenditure was inqirretl by Railway Administration after issue d instructions for stopping work. The Ministry informed the Committee ' in a note that t$e expenditure incurred after issue of instructions bv the Railway Board in August, 1964 was Rs. 16,57,662 at Siliguri yard and R5. 15,20,409 at Alipurduar yard. , 4.25. The Committee enquired why the work was commenced withwt detailed estimates. The witneass crbted: "At that time there were Ibnor- ma1 conditions obtaining in that area soon after the Chinese -ion in 1962. They found difficulty in moving the traffic in those conditions So, a decision was taken straightaway to submit an urgency certibte and go rhead with the work and make a ddetail&i survey later."'The Corn- anittee were also ivformed that preparation of a detailed estimate would have taken only about two to three months. In reply to a question the Ministry of Railways have furnished the following reasons for the diffc- rence between the original estimates of the cost of work and the revised catimates: ------' SILIGURI YARD: Original Cosr Rs. 16.99 lakb Revised Cost ' Rs. 43.96 lakhs Excess Rs. 26.97 lakb . -.- .. . ..-- ---.-.-- -. ---- "The reasons for the excess were mainly as follows:'' "(a) To deal with a additional metre gauge traffic alterations in the Marshalling yard was necessary. This had not been provided for in the original abstract cost. This resulted in an excess of Rs. 9.24 lakhs." "6)No provision had been made in the original estimate fa Carriage and Wagon Deptt. and Repacking Shed with yard and platforms. These were found necessary after further review of the scope of the work and resulted in excess cost of Rs. 6.69 lakhs." " (.c) There was an excess in the cost of additions and alteration6 to passenger yard, metre gauge transhipment yard and parcel yard, amounting to Rs. 6.91 lakhs. These additions and alee rations were found necessary during actual execution of the work. A part of the excess was due to higher tendered rata than originally anticipated and also due to provision of QW permanent way instead of second hand." " (d) It was found necessary to provide coloured light singallinv and with this change in the sdope of the work and cost of materials going up there was an excess of Rs. 4.03 lakhs under this head." ------ALIPURDUAR Original cost Rs. 2f.21 lakh Revised cost Rs. 40.85 laklm Excess Rs. 14.64 lakhm 'The reasons for excess were mainly as follows:"

"(a) Due to additional quantity of earth work on account of resit- ing of the yard at Damanpur to avoid homestead areas- Rs. 1.97 lakhs."

"'(b) Ptovision *of additional permanent way points and-crossings and new permanent way materials required consequent on rbifting of the yard-Rs. 1.94 lakhs."

"(c) Provision of ballasting which had .not been included in the original estimate-Rs. 3.48 lakhs."

" (d) Provision of additional permanent way at Alipurduar Yard due to additional facilities provided.hRs. 3.60 lakhs."

"(e) Additional cost of signalling-Rs. 0.94 lakh."

" (f) Miscellaneous items including electrical, machinery, tools and plants, establishment etc.-Rs. 2.70 lakhs."

4.26. During evidence, it was stated in this regard that "the position in regard to the various items of work in that area was such that nobody could estimate at what rate these works could be done."

4.27. The Committee consider it unfortunate that, in spite of specific inatn~ctionsto the contrary issued by the Railway Board, the Northeast Frontier Railway proceeded with the work of remodelling of Siliguri and Alipurduar yards for a capacity of 700 wppns on the basis of their own as8essment. The trends of traffic atter completion of the remodelling have belied the anticipations of the Northeast Frontier Railway. Against a capacity of 700 wagons provided in these yards at a cost of Rs. 84.81 lalrhs, the maximum araffic reached in 1968 was 526 wagons. It was also indicated during evidence that, though traffic will "go up", the peak tr&c anticipated "may not be reached." As admitted by the Chairman, Railway Boar& during evidence, the Northe.ast Frontier Railway "should have erred on she side of caution" and stopped work at the level it could have been stopped. Had that been done, the bulk of the expenditure of Ra 31.78 lakhs incurred, after iwe of the Board's instructions. could bave been avoided. *TheCommittee trust that the Railway Board will ensure that, in future work of such magnitude is executed after careful advance planniw and the prior approval of the Railway Board who would no Qubt weigh the operational gain/necmity of the work agaht the ex* diture to be incurred. 116 . Nornewt Frontier Kailwav-Avoidable provisian of facilities at crossing etatioris Audit Paragraph

.l.L'!I. 'I'llc three. cwssirig statioils were completed at a cost of Ks. 7.25 Iitklls bcrwecti Sep~embcr,1964 ant1 March, 1Wi. They wcrc opened for rlxlilc brtwcen. April, 1'3tj(i a~rclA~lgi~st, 1966 but were closed in Novem- I)cr, l!)fi(i. as tl~traffic cwni~igswere meagrc. .1.30. I'lle Atlnri~lis~r;t~ionsti~ietl (l)ecembcr, l!)(i7) that the construe- ti011 01' 12. <;. linc \.\';IS imtlcrtaken on top priority basis to meet defence rlcwtls irlitl ;I tr;tti~t.sclrvey w;rs neither called f'or nor undertaken. It may I>(. st.;ctc~lt1i;rt the c~onstriic~tior~ol tile st;ttiom c.omrnenced in September, 1964 ;tntI tlierr was adec.ju;~t.ctime to itscertailr traffic prospects at these s~arions. '

24 .J I. 'l'lle f';~c.ilities ~)i.ovitlrcl ir~clutledstation buildings, platforms, ;i!)proacli roitcls eld cjuurters I'or tllc track ~nailitenanceand traffic staff. I~:xc..l~rtlirlgtlre station b~lilclir~gsitntl quarters for ,track maintenance staff:, the wsr ol' ilvoitlahie facilities mnc to about Rs. 4 Iakhs. (P;iragral)l~No. 30, .4~1tlitKepori (Railways) , l%8) . 4.32. The Colnnlittee pointed o~tthat, though the construction of the Broad Gi~~geline was iintlert;~kcnin October, 1963, the construction of the crossing stations and other itnxilia~yfacilities was commencecl only in September, 1964. They enquired whether this time interval did not provide adequate margin to conclwt ;I traffic survey and whether, if such ;I wrvey had been carried out, it would not have helped to avoid the expenditure of Rs. 7.25 lakhs on the three crossing stations beyond New Rongaigmn, which were ultimately closed down. The witnesss stated that the work was "done in $hurry" and. "proper thought was not given whether these were required to be done." He added that between Rongaigaon and Joghighopa, there was a proposal to establish an inland port for transhipment of goods into barges. Unfortunately, this port did not tome up and thc traffic in these three statio&, therefore, "did not coFe up to expectation^.^' The ?tation; were closed down %!most im- medialelv" after it was found that there were no traffic prospects. The witness pintcd out that the elltire ~vorkof constructing the line was undertaken on strategic considerations "as a top priority work". "The decision of the Cabinet was that it. should be finished in two years. It was a herculean task, because it was a very difficult terrain. Yet it was built in a record time and it was done in a hurry.''

8 4.33. The Committee enquired whether because the work was done in ;! hurry, it was necessarv to have incurred expenditpre on stations, platforms etc. without a survev. The1 pointed out thit the comment in the Audit paragraph was not about the line itself, but about the provision of these facilities which turned out to be nqdlew. The witness replied: "I am not defending it at all. 1 plead guiltv that it wns done without proper traffic survev...... Since there was no traffic survev, we decided to have stations 6 or 7 miles apart. Tf we had carried out survey of the line and traffic. the location of the stationsBwouldhave been different." In replv to a question whether the creat'inn of these unneceswry facilities would not result in recurring maintenance expenditure, the witness stated: "That is tnie ...... v

4.34. While the Committee appreciate the fact that the constructio~~ of the line had to he undertaken in a hurry to meet strat+c needs. thev feel that it was not prudent on the part of the Railwavs to havc'undertaken the construction of crowing stations and the provision of auxiliav facilities without a prior- traffic su~ulvev. The subsequent closure of the stations rendered the investment of Rs. 7.25 lakhs on that account entirely infructuous, besides saddling the Railways with the respomibility for recurring maintenance expenditure on the facilities created. The Com- mittee trust that action will he taken hv the Railways to avoid the recur- rence of such costly lapses. . Western Railway-Remodelling of Station Yard at Jaipur Audit Paragraph 4.35. Additional facilities for handling goods and parcel traffic were provided at Jaipur station at an approximate cost of Rs. 10.85 lakhs, as an all rolind rapid development of parcel and goods traffic was expected due to the increasing importance elf Jaipur, being the capital of Rajas- than. It was anticipated that the parcel traffic would increase from 1400 maunds to 2800 maunds per day and goods traffic from 89 wagons to 164 wagons per dav. The work was completed in February. 1963. The anticipated traffic did not. however. materialire and the traffic handled diwing 11965-66 was 895 maunds of parcels per day and 97 wapncr of eoods traffic,per dav Lowing a decrease in the ~arcelstraffic and a marf$-. nal increase in gods traffic compared to the traffic h~ndltvlprior to the nndert,aking of the work. a 4.36. The pard facilities inciudtd provision of 2 parcel sidings with platformu, each capable of holding .I1 four wheeled pard vans for, inward and outward parcel traffic. The got& facilities included provision ' of a new covered goods shed with platform to deal with 50 wagons fcrr inward goods traffic, a seperate covered goods platform, capable uf dealing with 10 wagons per day, for uotward t%afEic, and. a separate uanshipment platioirn to deal with 16 wagons per day for transhipment purposes. 4.57. If the iacilities had been created on a more realistic amicip;tion of the traffic needs, an expenditure of Rs. 3.25 lakhs auld have been avoided. [Paragraph- No. Y 1-Audit Report (Railways) , 19681. 4.38. The Committee enquired why additional goods traffic at Jaipur failed to paterialive 911 the scale expected. The Ministry stated as fQllows: "The goods traffic was anticipated to increase from 70 to 126 wagons of inward traffic and 11 to 22 wagons of outward traffic daily, or from a total of 81 wagons to 148 wagons of both inward and outward traffic. The figures of inward traffic included not only the wagons to be dealt with in the goods shed but also in departmental and private sidings. Apart from this there are 3 stations in Jaipur area, namely Jaipur South, Jaipur West and Gandhinagar at distances of 2, 5 and 6 Kms. from Jaipur station, to which considerable amount of inward traffic has been diverted after 1957 as a result of closing Jaipur for booking of inward traffic in loose commodities from 7-6-1957 and closing the station for outward booking of similar coinmodities from 1-12-1962. The dailv average inward & outwa;d traffic dealt with at all the stations during the last four years was as undm------.- - -- I964 I965 1966 1967

Jaipur station & Private sidings 86 PO 79 80 Departmental sidings . . I I I I Jaipur South . 28 3 3 30 29 Jaipur West . 21 20 14 10 Gandhinagar . .2S I 8 26 34

- 1 -- 161 162 Total 150 I54 Before the transfer of loose ' traffic from Jaiyur goo& shed to Jaipur South, the total volume of goods trafhc dealt with at Jaipur South, Jaipur West and Gandhinagar used to be ( 4, 5 and 5 wagons per day respectively. Excluding this traffic i.e. 14 wagons'from the total volume of traffic dealt with at all

% stations in Jaipur area during the last four years, it will be seen that traffic has materialised as anticipated earlier."

4.39. In reply to a question, the Committee were informed that the work of remodelling of Jaipur yard was commenied in July. 1957. Asked whether the facilities were curtailed in view of the diversion of inward trafic in June, 1957, the Ministry stated, "Consequent on diversion of inward loose traffic in June, 1957 from Jaipur, facilities were not curtailed. The new inward goods shed which was proposed to be provided after yard remodelling was planned to deal with 50 wagons of damage- able and valuable goods and not loose traffic."

.1.40. The Committee were informed that no additional facilities have been provided at Jaipur South and Jaipur West stations to which the traffic was diverted. At Gandhinagar station also, no additional facili- tics were provided until 1964.

"However, with the rapid development of Jaipur, the city expanded right up to Gandhinagar, which is 6 Kms. away from Jaipur, and the traffic dealt with at Gandhinagar increase. To handle this increasing tralfic satisfactorily, the following facilities were provided in 1964.

(i) A goods lock-up ZO'x20' and a parcel case. , (ii) A goods loop, with capacity for'20 wagons. (iii) Goods platform with capacity for 10 wagons. (iJ) Motor loading ramp. (v) Approach road.

The total cost of provision of the above facilities was Rs. 1,55,1341-. These facilities had, howkver, nothing to do with the diversion of traffic from Jaipur to this station."

4.41. The Committee asked why the parcel traffic declined sizeably. The Ministry stated: . "It is,stated in the Audit para that the parcel tra9ic would increass from 1400 maunds to 2800 maunds per day and ,the traffic 11ar1Jled durillg 15Mi5-ti(i &as 895 maunds of parcels per day. 11c figure of 1.100 ulauncb per Jay mentioned in the justih- cittioll lor the work was the maximum traftic handled on any ollc day prior to remodelling. On the other hand, the iigure . ot 895 mauld referred .for the yea; 1965-66, howe;er, rep- Ieselus the average tor the whole year. ?'he two figares ~wnel),'1400 maunds and 895 maunds, are, theredre, not comparable.

Uclore re~IIoddlillg, the average daily traffic handled was 350 mauntls ou~warclad 800 maunds inward or a total of 1150 mauntls; no*ildica~ion, however, is available whether his daily average 'was worked out over a sufficiently long period or was the average for a short period in the busy season. Corn- pared to this figure the parcel traflic handled at Jaipur in 1965-66 has gone down.

Besides the setback in the agricultural and idustrial growth due to Chinese and Pakistani aggressions, failure of monsoon in 196546 and sluggisliness in the country's economy, the main reason for the drop in parcel traffic in the year subsequent to the remodelling was the rapid and intensive development of road services in this area."

4.42. 'The Committee enquired whether, before undertaking the work of remodelling, the fact of rdad development was taken into account, the Ministry stated:

"Before undertaking the work of remodelling the estimates of increase in parcel traffic were arrived at taking into cons~deration all relevant factors, including road transport. The growl11 of road transport underwent a very significant change after 1969, when the 'Central Government conveyed their decisions on the recommendations of the State Tarnsport Cornmis- sioners)Controllers made at their meeting held in Mussoorie in 1957. As a result, in,ter alia, permits for distances up to 300 miles were issued freely. No su'ch radical change ,was anticipated at the planning' stage or when the work started in March, 1956 and while the work was in progress.c It may be mentioned that the remodelling. was completed in 1959. The 121 latest avail;~blefigures of permanet1t road permits for lorries in operaticw lor Jaipur region of K;~jasthiinare given below:-

. --Jaipur - - - Region- - - N~I.of increase in T~tul Service . - On Regional S1.ate-wise Permits I'ermits

------Besides, Jaipur i4 servetl b) lorries registel-ecl outside the' Jaipur Kegion but holtling permits lor inter-State ant1 inter-St.ate operation. In keeping with the trend of rapid developments generidly, their n~unbermwt have also increased conltide- rably."

4.44. The Committee are constrained to ohserve that the expellditurc of Rs. 3.29 lakhs incurred on the provision of additional facilities for handling goods and parcel t~afficat Jaipur pation was largely avoidable. The facilities were meant to help the station to cope with an anticipaterl increase in goods traffic from 81 to 148 wagons. apart from an increase in pardl trafiic that was also expected. However, the actual goods traffic that materialised at Jaipur station ranged from 79 to 90 wapns during the years 1964 to 1967. The Railway Board have pointed out that if goods traffic at adjoining station, i.e., Jaipur South, Jaipur. West, Gandhinagar I and a few private and departmental sidings are also taken into account, the increased traffic should be considered to 'have rnaterialised. The C~mmittkare unable to appreciate how increased traffic at these station* and sidings was related to the facilities provided at Jaipur station. As regards parce;I traffic, the Committee note that it declined, instead of -eming, due to "the rapid and intensive development of road services in tP e J4.44. T& Committee hope that, in the light of this experience, the Railway Board will ensure that splanning for provision of facilities to cope with anticipated incrcaweti in traflic, is done only after a redistic estimation of oraffic growth. is In the pmof such &tion, it vital that the , impact of the sizeable growth in mad communications is also takem into* account. W- Railway-Premature doubling of ~hksi-uj jain wctibn Audit paragraph 4.45. In order to cope up with the additional traffic of 3 trairts expected to be moved on the new Guna-Maksi Line, it das decided to double the Maksi-Ujjain section (40.4 Kms.) ot Katlam Division at an estimated cost of Ks. 2.2 crores. This section had a capacity of 18 trains belore the doubling was undertaken against the actual traffic of 11.5 trains. It was expected that by',the end of the Third Plan, with the completion of the Guna-Maksi line, 21 trains would be required to be moved on the section. The actual number of trains moved in the peak season of 1965- Gfi was, however, only 14.6 trains, that is, less than the capacity available before doubling. 4.46. The Gunii-Rlaksi line, the construction of which commencecl in April, 1962, had been slowed clown in view of the general shortfall in traffic coupled with financial stringency and is now expected to be completed only by October, 1969, the overall physical progress by the end of February, 1967 being only 46 per cent. The doubling of Maksi-Ujjain section was, however, completed and opened for goods traffic from March, 1964 to October, 1965 by stages. Thus due to lack of synchronisation of the two connected works, additional capacity generated by the doubling of Maksi-Ujjain section at a cost of Rs. 2.2 crores remained unutilised. 4.47. The ~drninistration'stated(October, 1967) that the shortfall in tralfic on this doubling was due to shortfall in coal production in the Central India Coal fields and Pench Chanda fields. Apparently the doubling work was proceeded with regardless of the progress towards targetted production in the above coal fields and the progress of Guna- Maksi line. [Paragraph No. 32-Audi,t Report (Railways), 19681.

4.48. The Committee were informed by the Ministry of Railways that the doubling of Ujjain-Maksi section was undertaken in December, 1962 as "an essential supplement to the Guna-Maksi railway line". The original scheduled date of completion of this line was June, 1964, but it was actually opened for goods traffic in secticrns progressively between March, '1964 and October, 1965. The line was opened for passenger traffic in May, 1967. The charted capacity available in the line kfore doublin: was 18 trains each way. After doubling the charted capacity increased 183 to 48 trriar, each way, giving an effective capcity far 35 trains. The number oL wains that actually ILIOV~in the peak season of 1965.66 was . 143 U&S each way. &ter doubling the Ujjain-Maksi section was to ca&y tr&c received via Bhopal and via the new Guna-Maksi railway line. 4.49. Explaining the cbnsiderations ml which the construction ot this line was undertaken, the Ministry of Railways stated in a dlote: "The coal production anticipated at the end of the Third Plan was 104 million tonnes. Accordingly it was estimated that 660 wagohs ol coal (457 wagons from Central India coalfields, 145 wagons trom Pencli and Chantlrl and 58 wagons from Benpl- Bihar) would move daily over Ujjain-Maksi seotion. In ad&- tion 110 wagons of general goods traffic was also expected on this section. For ~riovingthis volume ottraffic and including passenger and departmental trains, the number of trains which would be required to be run on the Bhopal-Ujjain section was assessed as IS. With the complction oE the Guna- Maksi line, another three trains were expected to join from Gum, making a total of 21 trains each way eyer the Maksi- Ujjain section. To enable 21 trains to be run each, way effectively a potential capacity ot 24 to 25 trains would be necessary. The existing charted capacity was 18 trains each wa) (effective capacity. 16.2 trains and actual utilisation 11.5. Since rhe length oE the block sections ranged from 4.8 to 9.6 Km. it was not practicable to increase the line capacity by having new crossing stations. Introduction of irnpsoved methods of signalling and block operation such as tokenless block weic expected to yield only a marginal increase in capacity. Henre in order to meet the main line traffic via Bhopal as well as the traffic via the new link, doubling of hlaksi-Ujjain section was con& derecl necessary." 4.50. As regards the Guna-hlaksi line to which his scheme was sup- plemental, the Committee were informed that it was included in the second Five Year Plan with the intention that it.woultl provide an alternative route for the movement of the increased coal traffic from the cehtral Indian coalfields to the Westan Railway and thus avoid doubling of Bina-Bhopal section and also develop a new area. As the line was expected to take four years to complete and was not ready for handling the increased traffic 6y thc'end of the Seccmd Plan period, padat doubling of 69 Krns. on 3ina-~hopal'sectionwas sanctioned during 1957- . 58 for the traffic expected during the Secund Plan. It wa& 14a(Aii)fi.S:--3 wnnidered that the facilities provided on the Bina-Bhopal sech mid not prove infructuous, as the bection wu working to saturation being pait ol tlic oi,lit~ Trunk route. Further, in regard to rhd coal traffic' moving from lhc- Central Illtlia Goalfields lo the Wc~telnRailway one- way trrrlllc wo~tltlhave to be moved on the Bina-Bhopal scction,wen after the 'Gun:,-.\l:tkri line had been constructed. With the c3tal,Iishment of , Heavy Elec 11i~i81Plant :~tHhopal and other developments thq haif taken plarc in the Third Pl;rn, the caj~acityon thir main trunk toute would Ix hllv taxed and the far ilities provided on the Bina-Hl~opalsertion would ;bet onle handy. 4.51. In reply to the Cot~~lnit~ec'squery regarding the doubling ot the fiina-Hllol~dlbec tion, tlie Ministry informed that doubling oE 146 ' Kmu. long Iha-Hhdpal rertion llad been camictl out in tito btages i.e. (i) 69 Kms. doubling*was progr;unrned during 1957-58 am1 completed in J.tnui~y,1Yfil (ii) 7.4 Kms. doubling was programmed in 19(ilI.ti3 of whir h (i2Kms. had bcen ccnnpletctl by 31-3-1968 and the balant e was to be ready by Ilet ember, I!)(%. 7'1ie charted line capacity at allable betore doubling was 21.5 train, cath way (eftective 20 trains) ~hichincreased to 28 train, (ellwtive 23 trilinh) c;rch way on 31-3-1968 .is ,t result ot doubling. .\rtuill utilisitiion was 20.1 trains in 1960-61 .~nd25.5 trains in 19674i8.

4.52. 'I'he Conlniitiee enquired why it was decided to complete the doubling of Irjjain-ll:~k$iline without correlating it to the actual progress made on main Guna-hfaksi line ant1 the targetted production of Cellera1 India co;rlfieltls, ant1 Pet~chand Chanda Coalfieds. The Ministry in a note ,rated:

0 "The doubling 01 Ujjain-Maksi section was undertaken on the basis of the estimated coal production of 104 million tonnes at the cnd of the Third Plan. This target was not revised downward till July, 1964, when the Study Group set up by the Ministry of Steel, Mines and Fuel concluded that the total coal p'roduction at the end of the Third Plan would not exceed 75.98 million tonnes. By that time, the doubling of two block sections had already been completed and the overall progress on the doubling as a whole was 67 per cent. Ml contracts for earth work, stafE quarters and bridges had been ac cepted and the contracts executed. Commitments for e- tions not yet doubled had been dntered into in full. It was thus no longer possible lo postpone the work on the doub*& Moreover, even after the overall coal producti6rl estimate WS revised, there was no drastic change in the anticipated payrn 0 of mcntvia Bhe& to justify the doubling being given up, even if his wse feaeiblc" 4.53. The Committee were also informed that the latest trfic prob pkts of the Guna-XLaksi line taken into account the capacity already seated by doubling of Bina-Bhopal section and the need for diverting wains 081 the ~una-~akjmute was being assessed. These u-affid pros- pmt~would be considered before a fillal decision was taken b) the Rail- way BoaIV regarding the completion of remaining works on the Guna- Maai line and .opening it for traffic. 4.54. The Committee regret to note that, due to lack of coordination, &e doubling of the Maksi-Ujjain line was allowed to proceed, even after the work of doubling of the Guna-Masi line to which it constituted "an -edsential supplement" had been stopped. The stoppage of the doubling work on the Gum-Maksi line was done appare&ly pending daailed .ucueeswnent of its traffic prospects in the light of the doubling ot the Bina- Bbpal line which had in the meanwhile taken place. It is, theretore, a matter for surprise that no effective action was taken to suspend the supplementary doubling of the Maksi-Ujiain line. .is a result. after this portion of the work was completed at a cost of Rs. 2.2 crores, it was found that the peak traffic developed was only 14.5 trains which was eveh lem than the capacity available lxfore the doubling was undertaken. The Committee would like the Kailway Board to investigate why there was a failure to stop further work on the line and initiate suitable action. The Railway Board should also evolve a procedure for ensuring that line .capacity works are undertaken or proceeded with only after the most care- W wwey of traffic prospect8 in the light of such works undertaken In -complementary sections. South Eastern Railway-Delay in the utilisatioh of Kottavalasa-Bailadilla line Audit Paragraph 4.55. (a) The construction of a new Railway line from Bailadilla mines to Kottavalasa (448 Kms. in length) was undertaken on an urgency cQtifi- cate in 1960, to provide annual transport of 4 million tonnes of i-&on ore commencing from 1966 for export to Japan under Indo-Japanese agreement. An abstract -timaw amounting to Rs. 55.32 crores was sanctioned in 1962 and the Railway line was targeted for completion and opening for goods traffic in January, 1966. 4.56. In November, 1964, it was inticipated that the iron ore mine at Bailadilla would be commissipned only after '~ctobar,1966 and the traffic at the gate of 4 million tonnes per annum would materialbe-only in Octobei., 1967. The target date for opening for goods traffic was accordingly revised to October, 1966. 467. While the line had ken cuapktcd in January, 1967 and b being udfor departmental traffic. movement of ore traffic commenced in May, I!Hi7 and, upto I)etenrt~cr,l!,fii, only about '1.1 lakh tonrles were moved. (b) A contract for prositling St;~ndard I11 interlocked signalling for this line Wit5 awartletl ir~Scl~tcmber, 1965. 'I'l~ework was to be completed' by March. 1468. ilfcairwhile, the Adrllinibtlatic~n untlcrtcmk the provision of non-interloc kcd hign;tlling iit 28 stations Ixtween Aptii. I!K6 and h'ovcri~ber. 1966 at ;tn e\tirn;itcrl coht of Ks. 3.Y2 lakhs (out of which materiels val~reditr Ks. I .fig 1.tLhs onl) wrtc lerlaimalk) though it was quite clcar even au earl? as So\ernl~r,1%4, that the expected traffic of 4 million tonries was not likely to niaterialise before Octolxr, lw7. On il mferenre n~i~clelo tlle K;~iltriiy Hrmrtl ill July, the litter ha& directed tile Atlministrntior~ it1 Nvve~nl~cr,I9GF to expctlite the temple- tim of Standard 111 interlocked signalling as originally p-nitled so that provibion of non-in t erlocketl signalling was avoiciett. The Administra- tion had, however, already incurred an cxpencliture of KI.57 thousand in providing the interim arlangemclits at five stations, of uhicli Rs. 28 thousand was stated to be rctoverable with the introduction 01 full iriter- Ifxlcing. I [Paragraph KO. 33, Audit Report (Rnilwa)s), 1968J. 4.58. From a note gi~tnto the Conunittee, it is been that against the target of 4 ~iiilliontonnea of traffic that actually materialised was 0.21 million tonnes in 1967 and O.Gi million tonncs in 1968 (upto August, 1968). The Committee enquired when Railway cxpectecl the traffic to reach the target of 4 million tom. The Ministry stated, "The National Mineral Development Corporation haw recently indicated that about 3 million tonnes of iron ore per antturn is likely to be moved in 1969-70 and beyond' 1970 the target is likely to reach 4 million tonnes per annum." 4.59. The Committee were further informed that "the quantity of ore expected to bc transported by rail over this line during each of the next five years as indicated by the hl. 11. T. C., and the approximate expected earnings therefrom, are given below:-

In Earnings @Rs. 301- Year million per tonne-in mres tomes of Rs. ;iCi.$E). When asked to state the loss suffered by tht . kailways due to &lay in the tatlisation of the line, the Winistry stated: ."the iron ore tnffic on this line commenced from May, 1967. Dur- ing the financi~lyear 1967-68. 4-60 lakh tonnes of i~onore and during the period from Aprit/68 to August/68, 5.08 lakh tonnes were moved for export, against the capacity of 8 lalrh ton- % ner per year on the basis of one heavy train a day and 16 lakh tonnes per year if two trains are run a clay.

Shortfall in movement during 1967-68 lakh tonnes : 3'32 I I '$2 Bamings @ Rs. 301- per tonnes-In lakhs of rupees 99'6 339'6 Adoping .Operating ratio of 68.17% for 1967-68 loss in lakhs of rupees . 31-60 108.09

This loss however is hypothetical ;tnd the figures only represent the shortfall in earnings, that have not accrued, due to the &ability of the N. M. D. C. to offer adequate ore for transport by rail. It is understood that there was delay in commissioning the crushing plant initially due to the difficulties in transporting the machinery until after the rail link was completed and later for want of electric power which was available from March. 1968." * 4.61. The Committee wanted to know to which countries ore moved .on this line were being exported. The Department of Steel have in a mote stated:

"The entire export of iron ore being moved along this railway line is through the port of Visakhapatnam and to Japan, The development of mining in the Bailaclilla deposits (Madhya Pra- desh) , and the construction of this .line. was taken up cone quent to an agreement reached in 1960 between the Covern- ment of India and the Steel Mills of Japan whereby the latter agreed to take 4 million tans a£ Bajbdill? ere p year for a period of 15 years in the first-instance, with the prices to be settled from year to year. Dn the mining side, detailed preppect. iw was embarked upon in the Bailadilla area and, subsequen- * tly, In consultation with the buyer deposit No. 14 in that area was chosen to be first developed by the National Mineral Dm lopmen t ' Corporation for this purpose. 0 131 Tbe ininfag project that was .mctioned involved, apart fnnn opclt. iag up oC mining benches for m~icalminiag, the tion of a fully mechanisecl ore crushing plant on thc hill tv at depoeit No. 14. Further, from the bottom of that ore cru& fag plant, a long conveyor system had to be laid, sukmtfi) part of which pam through a tunnel, to the lower slopes over- looking the valley below where the conveyor -tern r@a tbe crushed ore to the ore lcrcening plant. From the screening plant, the ore is carried by further systems of conveyors to separate stackpiles lor lumpy ore and for lines 'at the terminal point of the railwu) line. iit Kirindul station. Mechanical loading facilit) has had to Lc installed at that loading station to put the ore into thc riiilw~ywagons. Such' complete 'and somewhat complex mechanised operations had to be adopted it1 view of the fact that the rated capacity of the particular mine, when it reache9 full production, is to be 4 mi!- lion tonne5 of lumpy ore apart from about a million tonna ot uon ore fines. It is the largest single mine of this kind not only In India, but, as far as is known, on mainland Asia ;IS well. Initial production, by way of trying some parts of the mine/plant, was commenced by the N.Tl1.n.C. in the middle of 1967 and during 1967-68, 450,000 wet tonnes were moved over this line from the mine to Visakhapatnanl port. Out of that. allowng for necessary build up of stockpile at port, 360,000 wet long tons were shipped to Jqmn during that year. For the current year 1968.61). contract has been made with the Steel Mills ol Japan for the shipment of 1.55 million dry long tom of ore with a further option, if the buyer so exercises it by 31-12-69, for an additional 0-25 million dry long tons (Export contracts are in terms of dry long tons; allowing for moisture. the aforesaid figures corre3pond to about 1.656 million wet tonnes and 0.267 million wet tonnes respectively). In the first six months of the current year, already 0.733 million wet tonnes hiwe been moved over this line to the port and shipments have totaliled 0.716 million wet long tons (equivalent to 0.727 million wet tonntk). In addition to the output from the complc- tely mechanised mine that has now gone into production, some rupplemmta~ympplits axv also being made from manual min- : ing an ths "b&' om dcpoaits lying on the side of the hills and nearer the valley level. With the mechanised mine now picking up momentum, according to present indications the shipments of Bailadilla o& likely during the coming year (1969-70) should total 3.5 million dry long mn(l and. along with the supplementary float ore referred to &om, might exceed 4 .million dry-longtons degthe next Ula

year (1970-71). + ThePe fiyTW8, like tlm ~t m0-q rt. lue to tbe lumpy ore suplilia only; in addition, after -8 time, vrtsalts of bes are also ruatuuphted; the buy- arc also examining that possibility already. Recently, decision 46also been taken to develop a sea~ndmfnt of qua1 capacity, on deposit No. 5, in the Bailadilla area for pur- pesof apt.to Japan. Itsoutl~utwauld,inpart,& inrep'. kaement for the ports of 2 inillim tons of Kiriburu ore that haw been continuing through the rrame port of Visakhapatnun since 1966; as the ore of the liiriburu mine (on the Biharl Orissa borclcr) .ia destined to be diverted t11tim;ttely in 1970-71 to meet the requirements of the Rokaro Steel fhnt under cona- truction, in replacement thereof the Japanese buyers have id- re;dy agreed to increase their commitmedt to purclmc Baila- di1l.i ore from 4 to 6 million tom pc~tear. Kecpi~igin view the ~)roductionof both these mines in Bail:dill;~ (inrlt~rlinpl fines) when they go into full production, discussions have also been commenced with the buyer to increase their purchases ultimately to 10 million tons per year. According to present indications, that full level might be attained in stages by 1974- 75." ! 4.62. In reply to question whether the proqxcts of exporting the ore wouId be aftected bv developments in Australia and if so, to what extent, it has been stated: "The emergence in a big way of Australia as an exporter of iron ore does pose a serious challenge not only to India but all other irol~ore exporting countries. Steps are being taken at our end to compete with that country on an equal footing. The quality of Bailadilla ore, both in iron contkrt and physical chracteris- tics, is such as should enable it to compete effectively with Australian ores. The reserves available in the Bailadilla area are also adequate and the Japanese Steel Mills have already expressed their willingness to accept additional quantities from the Baiadilla area. Considering the large export potential of the Bailadilla deposits and the continued interest in Bailadilla ore maintained by the Japanese Steel Mills, it ik proposed to develop a new ore loading facility outside the pre sent port of Visakhapatnam, the feasibility of which has recent- & been established and has also been accepted by the Japan-. The Outer Hqbour at Visakhapatnam, when developed, will in initially be capable of ,receiving ore carriers of 1,00,00@ DVT but could later be able to accommodate even larger vessela" - 4.65. fbe Commit+ yuired whether befox bdddking t&e work. af interim signalling arrr)ngement in April, 1966, the Administratiom rpbdfrcally chocked with the National Mineral Development Corpordr the quantum of iron ore trafiic rcquired to be handled before interlock& signalling was in position. The Chnmittee were informed that 'we quantum of iron ore traffic required to be mwed from October, 1965 wat ascertained from the National Mineral Developp~ent Coqmtig, before undertaking the work of providing non-interlocked sipalling arrangements, at the fbordinrtion meeting held among offlcr~rof D.P.K. Wai!- way Project, N.M.D.C., and South Eaatern Railway on 2lst April, 1966. At this meeting, the General Manager, N.M.D.C., stated that he woulcl be in a position to load at the rate of 1,000 tons 01 float'ore a day irom Outober, 19G6, which could be increased to 2,000 tons a day by about January, 1967. (A copy of the minutes of the meeting is at Appendix 11). 4.64. Jn a notc to the Committee, the Ministry intormrtl, "As Standard I11 interlocking ;~t;,I1 the sti~tionswas not expected to be completed by March, 1967, it hvi:\ anticipa~ctlthat non-in~erlockerlsignalling might be required at 28 stations at ;in estimated expenditure oE RI. 2,24,000/- in addition to the provisions in the estimate. As this constituted a material modification in terms of para 10lO(f)E, it required Board'\ approval. The Board were ;~ccortiinglyaplmx~ched for sanction to tllis work in July, 19GG. The Board, had directcd that Standard I11 signalling should be expedited, so that provision of non-interlocked working as a phase work is avoided. ns far as possible, when the line is opened lor traffic. How- ever, in ;~nticipntionof Board's sanction for the wholc work, non-interlocked signalling was provitled at 5 stations involving an expenditure ot Rs. 40,000/- only.

, 4.65. In order to avoid sucll recurrences, works, which may have to be brought into use in stages, will be so planned that, as much of tho .stage work as possible, will be utilised to form part oE the final work, and suflicicnt provision for the stage works will be made in the project estimates." 4.66. The Committee note that the Kottavalasa-Bailadilla line constructed specifically for movement of ore meant for export carried a tra&~ of 0.21 million tonnes in 1967 and 0.67 million tonnes in 1968 (upto 20th August, 1968), against thd targeted annual traffic of 4 million tonnes. The consequent loss of earnings in 1967-68 has been estimated by the Railways at Rs. 108.09 lakhs. The Committee observe that the traffic failed to materialise due to the delay in the development of the mines and that from 1969-70 onwards. traffic of 4 million tonnes or more is expected to be moved on this line. The Committee would like to watch the position in thib .- b respect. n 4.67. One point incidentally arising out of the information made avail- .able to the Committee needs emphmisidg. The Committee notice that AParlt brr aanged ''in a big my" u pn exporter of iron ore podng 'k muious challengen to Indian imn ore exports to Japwhich arc moved q~thia liw. Govanmeat are apparently confident that this chalknge *roaM be met and that it would be possible to compete with that country an an qlul footing. The situation that has developed underscores, how- ma, the neccsllity br a close and continuous watch on the quality of our aplrrt oping adits price.

Eastern, Southern, North Eamrn and South Eastern Railways-Non- I utilisation of tropenaz converlora

Audit Paragraph 4.68. I11 mity, 1957, the Ministr) of Kailways (R;iilw\.;tyBo;11i1) tlccidect to make suitable tropenu stecl ingots from scrap in the 4tet.l foundry at Ajmer ancl have them rcrolled in the rerolling mill at J;~m;~llm..Accord- ingly, the Jamalpur \2'orkhops obtained lilB tons of ingot\ llonl Ajmer Workshops between September, 1957 ancl March, 1959. 011 rerolling. the round ingots showetl trrinsversc cracks wllic.11 were ;~ttril,utetlto high sulphur and phosphorus contents. It was l~clclt11~t tropcn;r/ (Rersemer) steel was not witable for loco component\ or nut\ and ri\et\ but can be used for rero!ling tie bar flats.

4.69. The Railway Board, Imtvew-, clircctcd 211 I lic K;~il~c;~ysin Julv, 7961, to provide, in one of ~lieirworli\liol~s, ;I ccm~bini~tion of n~eltin~: furnace and a rolling mill in ordcr to, u~ili/e5tccl wrap ;irisings on the Railways to the masimuni extent posd>le :~ndLO give cxpcrirnt c to Rail- way engineer in steel converaon. In pursuance of this dire( tive steps were taken by some Railways to set up tropena convertors in thcil workshops but these melting units rcmainetl unutilised because ol i~n\;ltislactory working of the plants.

Eastern RaiEwav 4.70. The convertor installed in Tamalpur ~~ol-ksbpto~:1r(14 the end of 1960 at an expenditure of Rr. 78 thousand ~wntinto regular operation from May, 1962, and produced 399 tons of castings till March, 1965. From the very beginning the castings were of kb-standard quality owing to high sulphur and phosphorus contents. The working of this plant was stopped from April, 1965.

4 Southern Railway 3- 4.71. A hon convertor and cupola was fabricated and erected I~L Perambur workshop at a cost of Rs. 2.62 lakhs. Though the blower was instalIed in July, 1966 the,corr&ct quality of steel could not be obtained until July, IfM7. ?'he oonvertor heu not been ppnt to uu? on prductitw bash so far (February, 1968).

a North Eastern Rnilruny

4.72. A 2 ton convertor and cupla was fabricked and erected in Im- nagar workdiop.in July, 1966 at an estimated cost of Rs. 35 thousand. Regular ,)rrdur ti& was siartc

South Iimtrrtr Rnilruny 4.73. A 2 ton convertor and a~~siliitrierwcre transferred from C:l~itt:r- ranjan 1.ocomotiw Wor;ks and erected in Klinragapur workshop in May, 1965 at a totiil cspcnt1ittv.e of Ks. 25 ttiousantl. The tropen;c/ cxmvertor was tun intermittently oli an experi~nentnlbasis for a couple of monllls hut since it was not possible to restrict the sulphur and pl~osphoruscon- tents 'it war not cnnsiclcrctl :rdvisable to continue produc~ion of sula- stanckrd castings. Thc cr.opcn:iz convertor is at present lying idle in tlw workshop.

4.74.' If a propcr evalua~ionof the results of providing the units at Ajmer and darn;~ll)urIiad becn done hefnrc deciding on the extension 01 thc scheliie to thc other Railways, the expenditure of Rs. 3.22 Iakh\ incurred on Southc~~n.North Eastern, and South Eastern Rnilwa\\ could have been nvoidcd. [Paragraph No. 34, Audit Report (Railways), 19681.

4.75. Tlie Conmittee were informed that out of four convenors installed in the vnl-ioiis Railways, the convertors at Jamalpur ;~ndKharagapul- wcre not being utilised. The convertors at Izatnagar and Perambur were heiii~utiliscd for manufacture of snlall q~nntitiesof steel castings. The combined rated capacity of these convertors was 1360 tons of steel castings per annum. The actual output from these convertors was 82 tons of steel castings from September, 1966 to August. 1968 from Izatnagar convertor and 13.88 tons of steel castings from July 1967 to September, 1968 from Perambur convertor. '

4.76. In reply to a question whether the earlier experience in the Jamalpur workshop was kept in view when directions were issued to all Railways in July, 1961, for the installation of tHe convertors, the Mini- 4try of Railway have stated, "With a tiew to ascertaining the suitability of steel ingots produced in Tropenaz Convertor for rolling if~tosmaller sections, a trial was carried out in 1957 in Tamalpur Workshops. The inw were supplied by Ajmer workshop$ ah4 these were suttquentl~ ' Iolled in Jartlalpur workshops the experiment indicated that ingots d abut 4" square or of smaller sizes could be surcespfully rolled into smal- la sect& and that tie bars, cotters and keys reqiilpd by the Civil Engineering Depanment for the permanent way could b0 made from ingots ol these sizes. In 'order to meet the requirements of these fittings andealso keeping in view the other needs (esplained subsequently), a directive was issued to the Railways to sct 1111 a conibiiiation of melting unit and rolling mill at one major workshop ot each Knilwn!. It will thus be seen that the espeririient at Janialpur ~yi)rk4iopsn.au kel)t in view while issuing the directive in July, 1961."

4.77. Asked why the orders for installation of convertors on the various railways were not issucd i~fterl'u1I trials initially ill ale or twa worksllops. it was stated, "the decision to set 111) facilities I'or melting/rolling of si,d and manufacture of steel ( s st in go at one major workshop or c;~c.llRailwny was, the dircct consequelice of the shortage oE melting/rolliug capacity in the country and the poor availability of stccl castings Eroiii the trde."

4.78. The Con~mitteeenquired why this exl~eriment did not prove succesoful. The reply received from the Ministry of Railways on thi5 point is reproduced below: "Between the time when the instruction for setling up of melting units were issued (1961) and now there has beell considerable expansion in the capacity of steel foundries in the country. In 1961 the licensed capacity of 17 private sector foundries was only 62,260 tonnes. During the Third Plan, additional capacity was licensed to the existing established foundries and with the licences given to 22 new foudclries, the licensed capacity of the 39 foundries became 2,02,OGO tonnes. In addition to these 39 foundries, which have taken elfective steps to establish production, 42 other foundries were licensed during the Third Plan. The total licensed capacity of these 42 foundries is l,8O,OOO tonnes.

In addition to the expansion of the private fountlrics mentioned above, there has also been expansion of existing foundries and establishment of new steel foundries in the public sector. As a result of the tremendous increase in foundry capacit! in the country, including the setting up of new steel foundrie3 at Chittaranjan Locomotive Works and Jamalpur Workshops h;)ving an annual capacity ol 10.000 and 2,000 tons respectively, the need for intensive utilisation of the existing Tropenaz :Convertors no 1onger.exists. Moreover, the cost of steel rast- ings from the tdde has recorded a downward trend and the conditions which prevailed when the convertors were first in* tailed no longer exibted afterwards. Considering all that f4uzon, continued use of all the convertors was not economically or technically jubtified.

5 Keeping in view the clranges that have taken plarc in the country (luring the Ii~st 5/fi years, it may l>c possible to utiljse the 2 Convertors at .\jmer arid I/atnagar only for imeeting the demand for nrm-\t:rntl;rrtl castings and small quantities of other casting\ which arc either not readily available OI cannot be pro

4.79. The Chmmittee cannot help feeling that the expenditure of R4. 3.Z lakhs incurred by the Railways on the provision of these convertors was avoidable. Two out of four convertors have been closed down and the total production from the other two convertors amounted to 96 tons against their capacity of 1,360 tons. The Ministry of Railways have statcd that the need for intensive utilieation of these convertors "no longeq exists" iq, view of the coneiderable expansion in the capacity of steel 'foundries in the country during the Third Plan. These convertors were also fe; up during the same period and it is not clear why, before embark- ing on the project, the Ministry of Railways failed to take note of Gov- ernment's plans to licence additional capacity in the existing foundry units and also to set up new units, some of which fell within the Railways' own jurisdiction.

North Eastern Railway-Xon-installation and under-utilisa tion of cranes

480. (a) A crane cos~ingRs. 54 thousand procured for the Gorakh- pur Stores Depot in July, 1967 is yet to be commissioned (December, 19137) . (b) In order to handle heavy lifts offered for transhipnlent at Garhara, two road mobile diesel cranes were purchased at a cost of Rq. 3.85 lakhs in October, 1964. Though the puts were assembled by January, 1965 the cranes could not be commissioned. It was decided in May, 1965 to operate the cranes limiting the load to the lifted to 50 per cent of the capacity oC each crane (10 tons). One of the cranes was accordingly commissioned but capsized while lifting a bunge of iron rods weighing about 3 tons as it had been operate4 incorrectly and the ground was --k unsuitable. (? 4.81. The other crane was commissioned in September, 1965 and was being operated with 50 per cent of its cipacity. After about 8'monthr' working, it, l~oibtmotor got clamaged in May, 1966 but was again brougl~t into use t)) utilising the motclr of the other mine. Even with the res- . tricted capcit!. the cram was operated in a station- position and was shut down 011 ;I number of cxcasions. (c) !\'bile esaminip~the mechanisation of handling facilities at transhipmen t poin is the hfinistry ol Railwa) s (Railway Board) decided to I)'w~ea crane similar to Taylor Jumbo Speed Crane for trial purposes with n view to ascertaining its efficiency in the transhipment work and directed the North Ea\tern Railmy in April, lM3 to procure one such crane urkently for usc in the Garhnra transhipment yard. The Railway .4tlmini\tration purchased an imported crane costinp; Rs. 1.08 1akhs from :In indigenous firm on single tender basis. The crane was ~eceived:~t C;:~vli:tr;i in October. 1965 but was brought to Gorakhpur in November. l!)t;5 for use in the goods shed at Gdrakhpur. However, a9 the crane was fast moving it was considered dn;lgerous to lire it in.tlic goods shed\ and was. therefore, transferred to Gorakhp~u-\t'orkshop in November. l9tX where it is now working for about six hours it week on an average.

[Paragrilpl~No. 36; Aidit Kcl)or~(Kailways). I!tC,H].

4.82. The Committee enquired why it took over ten years 'for the crane as Gorakhpur Stores Depot to be installed. They were informed: From June, 1958 to end of 1960, the area in which this crane was to be installed in the Gorakhpur Stores Depot was cougested with large accumulations of heavy ferrous scrap. This type of crane needs a special Railway track for operation. Before the Railway track could be laid, the area had to be cleared of the scrap by moving it to a new scrap depot ander constrwtion at Pipraich n few miles a;way. This scrap depot could be completed towards the end of 1960 by which date the estimate of KF.2.11 lacs for the whole work was also sanctioned." "From April, 1961 to April, 1962, the Railway Board who had to arrange for enhancement of handling capacity at Calcutta port on Rail- way account at short notice to accommodate a manifold increase during 1961-62 in the volume of imported materials required mainly to develop. the wagon bliilding capacity in the country, issued instructions for transfer of this crane to Eastern Railway to help in stacking the material in the Paharpur Dump inside the Calcutta Port Trust area. Because of bunched receipt of ship loads amounting to more than 6,000 tonnes a month on the average during the months September to December, 1961 against a normal level of about 1000 to 2000 tonnes a month, the stacking at Paharpur had to be handled with the existing resources and stacks of- 12 to 15 feet had been built up. This crane with a headroom of only 12 feet was, therefore, found unsuitable on further investigation and advicc- war, sent accordingly in April, 1%2 by Eastern Railway to the North- Eastern Railway." "From July, 1962 to A~>ril,1965, owing to the development of another depot in late 1!)6:! to feed the newly set up bridge workshop at G~raLh- pur Cantt. and :ifter ronsitlering the relative needs, a decision taken in April, to instal the mane in an alternative site in the bridge 1963 I depot :lt Gorakhpur Cantt."

"From .,\l~ril, I !Ni3 to Febru;iry, 1965, the revised estimates were worked out, work taken in hand and completed."

"FIom F~l~ru;rr),1965 to October, 1967, on testing, howcvcr, some of the ekctric.11 ~.cl~lipnwiitneetlecl overhauling and rertain relays needed rcplarement whit11 wex procuretl, installed and after wtisfactory testing ant1 completion ol fin.11 ,~~~U\III~CIII\hy the Ele~tric;iI,.\letlianical and Cit il Engineering nepartments, I I IC c rane wts romnii~sioiietlon 28-10-67."

"IVhile tl~cfactual history has 1)eell briefly intlicatctl above, the basic -cause of the clelay has hcen s lmc-edural lacuna explained below: (:apital works arc progr;~n~metleither through the annual (i) Machinery and Plant Programme; (ii) Rolling Stock Programme; or (iii) Works Programme. (i) al~ovenorn1;rlly covers i~emslike machine tools; (ii) covers the requirement of' nlI types of rolling stock; and (iii) all other schemes. The cost of this particular project ultimately came to over Ks. 2 lakhs out of which about Rs. 0.5 lakh was accounted for by the crane and the rest by civil and electrical engineering works. The all-inclusive cost should have been estimated even at the stage of inclusion in the Machinery and Plant Programme or alternatively the project should hive been included in the Works Programme."

"Suitable instructions on this subject are being issued to avoid a .I cc nrrence."

-1.83. Pointing out that the crane was shifted from place to place, the ~Committceasked whether its purchase was based on known and definite requirements of any Depot. The Ministry of Railways have stated in a -note: "The crane was originally intended to be utilised fcr Izetnagar l'urkshop against a sanction in the M & P Promeand the order for the purchase was placed in Novembeq, 1954. In the meantime it Was 1 3decided that the cram may be utilisd against another sanction actually accorded in 1955-56 M & P prW& for a similar crane for Gorakhpur Store Depot. The crane was rcquired to handle heavy items of stores such as wheelsets, axles, tyres. boilen, plates and other bearing sections of steel in the Depot. a The crane, however, could not be installed immediately after its effective 'date of supply i.e. 27-6-58 for want of suitaI.de accommodatio~~ inside the Stores Depot at C;oralihpur, as the scrap yard area inside the Depot, ~vherethe crane was to be installet1 was .having large accumulation of various scraps (which ultimately had to be shifted to the proposed new scrap yard at Pipraich) ."

The conrtruction of Pipraich Scxap yard sche3uled for cbii~pletionin

1958 was del;i)eci upto ]!)GO. nt~ringthe time the construction of 0 the Piprnich !art1 had been completed ;~ndthe work for the clearance of the scrap yard at Gorakhpur Stores Depot was taken in hand, alternative ures were explored nnd the Xorth-Eastern Railway was ntlvised in April, 1961 to transfer the crane to Eastern Railway. Towartls the end of .4pril, 1962, the C.O.S. Eastern Railway, however. intimated North Eastern Railway tlut this crane was not suitable for use on his Railway. Thereupon North-Eastern Railway initiated steps I'or inrtalling the crane."

"By this time the bridge \\'orkshop at Gorakhpur Cantt. .had expanded and it TVaS felt ne,cessary to have a heavy crane at that place to handle heavy consignments. The relative merits of setting up the crane at each of the two locations-Gorakhpur Stores nepot as originally planned and Bridge MTorkshop at ~orakhpbrGantt.-was reviewed in detail. It was found that whereas Gorakhpur Depot could handle atleast some of the heavy consignments by using the 2 tan steam crane which was available, the Gorakhpur Cantt. Llepot being situated far away from the traffic yard could not utilise the crane available in the yard and accordingly the need for a crane for the. Cantt. Depot was considered more msentiai. In September, 1962, it was decided to instal the crane at Bridge Engineering Stores Depot at Gorakhpur Cantt. in preference to Gorakhpur Stores Depot in view of the earlier utilktion of the crane and the need there being greater."

4.84. Taking up the ,question of the performance of the two heavy duty mobile cranes installed at Garhara, the Committee asked what their capaciw was and how the performance compared with the capacity. " The Ministry of Railways have stated that "the crane is rated in terms the maximum tonnage that it can lift at a time and this is 10 tons for ! each oE the claw&" As regar& their pertgl~t~e~,drt fm prScdon ha5 been indicated:

+ *Craw KO. 21 122: From 26-7-1967 the date from which the cralie lras txen continuousl! working upto 1-7- lC16Bt it transhipped 1,445 wagons. Tliir workc nut to an average of 4.2 wagons per day. . Crane A-o. 21 1'23: Ihtrinp; the period from 6-9-1965 to 1l-6-lkW when it was working, the crane tranrhipped 3,260 wagons i.e. 5.2 wagons per day."

The craltc No. 21 122 capsized on 21-5-1965 on the very day of its tornrnissio~rit~~and got damaged. The firm was asked to supply the broken parts but the quotations were received piecemeal and very late. A4 a re~ulta number of purciiase orders had to be placed an the firm :tnd the crrtnc ws repaired nt~clrecommissioned on 26-7-1967. The crane has been con1 inuously working since 26-7-1967."

"Crane No. 21123 was working from 6-9-1965 (the date of its com- ~nissioning) ill 2-5-1966 con~inuously. On 2-5-1966, its hoist motor was damaged. The motor of the other crane No. 21122 was utilised from 4-5-1966 and it was working upto 11-6-1967 when, it was sent for P.O.H. The crane is still under P.O.H. as some of the spare parts required are still to be supplied by the firm."

4.85. The Committee enquired whether there were any manufacturing defects in the cranes. They were informed:

"So far as the manufacttire of the two cranes (Nos. 21122 and 21 123) is concerned, there are 110 defects. The crane were tested with full loads on 10-2-1965 ;md 11-2-1965 ant1 at that time workecl satisfactorily except for certain minor defects and deficiencies. The defects were rectified and deficient parts were despatclied by the firm by the end of March, 1965. These, were installed and one of the cranes No: 21122 was c.ommissimed on 21st May, 1965." "This crane, however, capsized and got damaged on the same day owing to intorrect operation and sinkage of ground. The replacement for the damaged parts were supplied by the firm piecemeal over a period of nearly two years and the crane was recommissioned on 26-7-1967." t "In view of the experience with fie first crane, the ground was con- solidated before the other crane (No. 21123) was cammDsioned on 13-9-1965. It worked satisfactorily till 2-5-1966 when its hoist rnotar

< ammc dcdcctive the imdatb of tht canmutator cosv got ha@d -king in r tlvb-atva due to oontnmination with oil addirC was mommission& orr 4-51% wing the mom d crane NO. --21122" "The damages referred to above cannot be attributed to any mant* hcturing defect and as such the question of claiming campcnsath Qrats. the wpplier in terms of the warrandy does not arise." F "Because of the condition of the ground on which these cranes operate, the cranes have been working to half their capacity from a stationary position. Crane No. 2 1122 has been wbrking from 46-7-1967. During the period from 26-7-1x7 to 1-7-1968, it had transhipped 1445 wagons, i.e., 4.2 wagons per day on an avenge. The other crane No. 21123 had transhipped 9260 wagons from 6-9-1965 to 11-6-1967, which on an average, account for 5.2 wagons per day.1 With these cranes, it ha\ been possible to hnt~dlethe traffic offered."

4.86. The Co~ilmitteepointed out that the third crane for Cbrhara was purchased without inviting tenders and had been vysparingly used. The Department have stated in a note:

"In the context of mechanisation of handling facilities at winship- ment points on the Railways it was decided to procure this crane for trial p~wp~sesto find out its efficiency in transhipment work. As it was purely a trial order, the question of inviting competitive tenders etc., did not arise and the purchase was effected on single tender basis." "The operation of this type of crane was examined; it was ascertained that such cranes were in extensive use on British Railways and had .certain advantages for using them at transhipment points."

"The requirement of mobile road cranes for the Third Five Year Plan was assessed at 18 Nos. In 1961-62, it was decided to procure 1 cram of this type (out of the 18 assessed) and it was decided to work it at Garhara transhipment yard as the handling facilities available there were inadequate to cope with the traffic then offering and, further, an appm *;able increase in heavy lift traffic to the extent of 70 to 80 B.G. wagons per day was expected during the Third Plan."

"As the anticipated increase in traffic did not materialise, and the aPffic offering at the time of receipt of crane at Garhara (October, 196V) .cotld be handled by th; two road mobile cranes and one Goliath cram already provided there, the subject crane has not been used at Garham I 0 SO far." 142 (Aii) LS-10. caindtfec M onup.iord hat dl rbc lor a*&. * '& la-oune dm,wm purchased by the Railways in &b case witbout drawing up a ' * propa prosrrmme for their inrtlllntion and the execution of works c61)- m.tbacwi&b. The aaac purchased for the Corakhpur Stores Depot hi958 nvu moved from placc to place from 1958 to 1962, withoyt being put to any me. In 1963, the site for its instdlation was chosen, and it Coalt ova: four yearn thc~eafterfor all the attendant work to !M c~n~pltfred,

4.88. Two other mobile wants purchased for Garhara yqrd in October, 1964 worked "to half their capacity from a stationary pobition" lmuw aP "the condition of the ground from which they operated." A thirq acane purcharved for thib yard in April, 1967 as part of sd~cmefor media- nisatfgn of handling facilities in thc vard has not been used as the traffic Mering could he handfqfl by the two mobile cranes and one C'liath crane already provided. 4.89. The Committee do not feel happy that after expending over b 5 lakhs on the purchase of these cranes. little attention was given to rhe question how effectively and quickly they could be put to use. Tl~c Committee trust that suitable action will be taken by the Railways to ~nsure.that expnsive items of machinery are purchased by the Kailwn).~ only after proper asrressment of requirc1ments and that they are put to edFective use without dclav.

Lnss due to delay in the installation and Commissioning ol' weigh 1~idge.s Audit Paragraph -. 4.90. The non-utilisation of a weigh bridge purchased in 1956 for over five years on the TVestem Rqilway was com~nentedupon in Para 22 of the Audit Report, Railways, 1964. The Public Accounts Committee in their S2nd Report (Third Lok Sabha) desired that the Ministry of Railways should take suitable steps to ensure that such abnormal delays in the utilisation of costly plant and macliinery be avoided.

4.91. A review 9f thc utilisation of weigh bridges revealed that 43 weigh bridges and one loco balancing machine purchased between March, 1956 and September, 1966 on seven zonal Railways at a total cost of Rs. I6 lakhs are lying idle j~ebrdar~,1968) . 4.92. Of these, 15 weigh bridges have not yet been installed for various reasons such as delay ill erectinfi foundation by the Engincuing 'Qepartment, transfer d the weigh bridge Mione station to another due to change in location, certain paf-ts being found missing or damaged, &lay in getting replacement of the missing and damaged parts and the rrfusal d the suppliers to supervise installath before settlement of cq- Cain disputes. \ ++M.Of +C wcighbriw wt ~t iMt*lte$8 wbridpw(nr Qai ~ri&to January. 1962 on the fiorth Eas&m and Il;j&i la Railways at a cost of Rs. 4.40 lakhs. rnle location of one of thri) -t.ridges on the North Eastan Railway is stated to be still undct deration) . 4.94. Thc remaining eight weighbridges and one loco ba?ancing machine, wbkh were installed after delays ranging from 2 to 4 ycarr are ly-' ing unutilised for reasons such as inundation by n16-soil water, defective working, absence ot components and non-inspection. 4.95. The non-u~ilisationof thew machines resulted in avoidable pay ment of dividend to General Revenues amounting to Rs. 2.50 lakhs upro 1966-67 on the cost of the assets without deriving any fruit from the investment. 4.96. Besides, the non-utilisatiori of weighbridges results in bookin% the wagons without weighment and entails loss of rcvenuc d:le to untlet- ' invoicing as wagons may cscnpe weighme111 pn rotttc also. 4.97. On the Northeast Frontier Railway, clue to delay in the utilism- lion of weighbridge at one oC the stations, the wago~iswere being haul4 to another station ova an extra distance of six K~ns.belorc Lht s:1111c. were despatched to destination. The voidable expenditure on this hw- lage was Rs. 2.0.5 lakhs from April, 1962 to Jnne, 1967. [Paragraph No. 38, Audit Report (Railways), 19681. 4.98. 'The Committee were inlormeil that out of 23 weigl~blidpmen- tioned in the Audit paragraph. I1 had been commissi~nedon various dates between February, 1968 ipd August, 1968, five had been installecl, but not yet commissioned for want oE certain parts or pending comple tion of certain minor jobs, six were still to be ipstalled and one weighbridge which went out of order after working for over 18 months was itr the process of being repaired. 4.99. The Committee enqulred whether the Ministry of Railways had rnvestigated the reasons for the non-inrtallation and the nori-ucilisation ni these weighbridges. ?Tie representative ol the Railway Board stated that an investigation had been conducted. The investi~ationhad disclosed that the foliowing were, "broadly speaking", the reasons .for non-utilisation of the weighbridges: (i) "Delays in laying the foundations for the weiphbridgeu;" (ii) Lack of planning as to the siding where the weighbridge were to be installed: ' (iii) Chango e in location from one itation to another; (iv) 'Missing of parts"' of weighbridges and time taken to get reg- lachnents.. 9 4.100. The witncss further stated: "We are aware of the fact thPt.rhir* piition was takcn up by Audit previously also. In April, 1965 we had sued instructions to all the Railways pointing out that t$ac saioua dehp in the installation and cwnmisrioning of weighbridges \rere takiq plqe and riutioning them to avoid these in future. The latests-cnhv made laas rcvealed that since then there is no improvement in the position and we arc now pursuing the question of fixing responsibility for earh of thew weighbridges *hose installation has been delayed."It is wry compll- catcd proem. There arc sd many departments involved-the civil enp necring department, thc mechanical engineering department and the slow tlepartments." . 4.101. When it ;:is pointed out by the Committee that the wei& bridges were commissioned only after the matter was brought to dltl notice at' thc Railways by the Audit, the witncss stated, "Originally it wnu hrought to our notice and we Rave instructions to the individual Railways pointing out the delays which were taking place. We expected the Rail- ways to react because it is day to day work and this is not a matter which rs Vmkhc-t-4 from day to day at the hlinistry's level. Now, when it was pointed out to us, we started pursuing it and it is we who haw been tol- iwing it up and seeing that the delays do not take place."

4.102. The Cmmmittee enquircxi why the administration had not taken steps to install a weighbridgc at Borgolai on Northeast Frontier Railway, when it was illcurring additional expeiiditRIre on infructuous hauIage of wagons. The Committee were informed, "This case of the weighbridge at Borgolni is a case of uery wrong planning initially. It is a station of only two lines :\nd at a two-lines station, it is absolutely impossible to have weighment arrangements. It was a case of absolute wrong planning. Because the pressure was put in 1964, the weighbricige was actually installed and it was commissioned. Thc commissioning was defective because there was some water-fall on that weighbridge and, after 3 or 4 months, 11 gave way. we have been told that it was again commissioned. I ;lm looking into it. There is the infructuous expenditure of Rs. 2 lakhs lminted out by ~udit'.:''The witness further stated: "My feeling is that there should be no weighbricige at this point because putting a weighbridgc means developing a big yard on which I will have to incur the cap- tal expenditure and all that"

b 4.103. The Committee are not very happy about the state of affairs in regnl to the commissioning and utilhtion of wekhbridp Out of 23 weighbridga which were reported to be idle, 11 have h been commivsioned after delays, five have ,been installed but not yet mnrm* \ joocd,8iac~mtok~aad~iaUPdCTnprir.Thcrcpzwca- marire ot the RPihvap Board hicaodf admitted durfn(Z: evidmce &at "dl thieucarcrof-dncgkcrondtbaeLmddenceforony of rhae CIUCL" The Cammfuec note that donto 6x responsibility ia thre cad has been idtdtd by the Railmy BoPrd. The Committee aprt that the Rdlway ibard will .laa arsure that such of the ,weighbridp an am not tet bekrg wed are apeditiously put into couhddon. It is PLO naagly to ensure that ordera for new weighbridges arc not ptad debout. &tailed p1,lanning in advance of their ipatalbtion and that wci$- bridga arc dT4wly maimabed. I 0 OPERATION ' ,@c;niral R@way-Unpndudve haulage engine, c

5.1. From 1st Apd, 1965 the engines of Deluxc/.Soutt~ernExpress. ham- cd at Jhansi shed, were working thc T.aj ~xpress,(up and down) for OW day before returning to Jhansi. On dieselisation of Deluxe/Southenl Kx- press trom 1st April, 1966, this engine link was broken. Instead of rvoiv- in^ a sui'tzble a1tern;ltive link from that date, the engines meant for T~J 'Express were run double headed with Punjab Mail between Jhansi and Agra (215 Kms.) on alternate days. This resulted in avoidable exnenditure to the extent of Rs. 17,760 per month on runnin~allowance to staff and the cost of fuel, water, tallow, oil and repairs. 5.2. After the matter was takcn up in Audit in February, 1967, a combined link for Janata Express and Taj Express was introduced from 1st April, 1967 resulting in discontinuance of the double heading. The extra expenditure incurred on running the engines double headed from 1st April, 1% to 31st March, 1067 was Rs. 2. IS Inkhs. 5.3. The Rnilw.ny Administration explained (F~b~.t~iiry,1968) that the same became operationally feasible after the opening of the 1)elhi goods avoiding line in 1967 betweeti Delhi and New Delhi. It may be mentioned that the number of train paths required between Delhi and New Delhi for this p&pose remained the same before and after 1st April, I967 and movement of light engines could have been arranged by double heading any other train between New Delhi and Delhi Jn. (4 Kms.) .

[Paragraph No. 42, Audit Report (Railways), 19681.

5.4. The Committee enquired why it 1451s necessary to run the engine double heatlcd betwe'm Jhansi and Apa for lull one year incurring an extra expenditure of Rs. 2.13 lakhs on fuel, running allowances to staff etc. The Member (Mechanical), Railway Board stated: "The position is, when the Southern Express was taken over on diesel traction, the Taj Express had to be worked by Loco having joller bearings for which the Central Railway found that they. did not have maintenance facilities at Apa. In fact previously they had homed the engines at &pa and found it difficult to maintain them there. Therefore, since they could not link with any other trains they found that the engines shouId be homed at C Jhvui d Should come...... (to Agra) co work the Taj Ex- f: * +t consider this to be the mast edonomical way of woriag ipd we lrcrrr examining ihe situation, bn all the Railways We are tiyiirg t6 get intor- mation from all sections. We will see that tiik most economical way Of using these locos are employed by the Railways. This is not examined by the ~ail6a~Board. This is each individual railway's ~UQC- tiop. But since this matter has come to our notice we are asking ewf other rdlway to tell ns whether there is any similar case at other plm and other sections also and we will now make sure that the most tcond cal wa! of working is followed."

5.5. Explaining why the double-heading was resorted to, the witnear rolcl the committee: "The railway feh that if we had to home these engines at Agra they would k spending 4516 Lkhs'to,dev&lop facilities for maintenance of only these 2 locos which are r&ning to Agra with . Taj Ixpress. This they felt was not justified because lot of capital expedi- lure would be there. Therefore they felt that best way 06 working woukl be to keep and home these engines at Jhansi where these facilities dread)' exist and bring them here to work the Taj Express from here. As the audit para says, this has becn cliscontinuccl from the clay that the line capacity between Dehi and New Ddhi has become available by themopening of goods avoiding line. This goods avoiding line connects Gaziabad with New Delhi without involving a movement through Old Delhi and theretore the line between Old Delhi and New Delhi which was very congested has become now comparatively easier. And therefore it is possible to tab the engine light between New Delhi and Old DaUu and tbao is why tram 1st April this was discontinued." The Committee were informed that the goods avoiding line between Delhi and New Delhi was opened in October. 1 966.

5.6. The Committee enquired whether the traffic was so heavy that one engine could not run between New DeIhi and Old Delhi. The witasa sated: 'This section has gat capacity of 30 trains each way. They arc $running alhosr full to capacity."

5.7. In reply to a question why, if the traffic was sa heavy, the en@* c~uldnot be double-headed with one of the trains, the witness stated: "When a train is double-headed the assisting engine is put behind the leading engine and this means difficulty of shunting operations both at New Delhi and Old Delhi. That is the reason why Northern Raihva~ 'felt that it was not pdble to double-head the train." In a note on this point, it has been further stated: "Whenever an engine is sent as, assisting nd required, it is invariably attached within the leading engine as the second engine. This is necewq as the leading engine crew are responsible for observhg signal, controlling the train and also main- tahing thdArupoingtimcb CZ I "When rheK adsting not required engines work right through # the next engine changing station, both engines arc detacqd and rcnt to the rhed and a new engine is attached to the train. Howevtr, should the acoond engine be detached en rqrrtc, extra shunting has to be performed. The shunting involves detach- ing* the second engine and the leading engine mmipg bkk to attach itself to the train formation, recreation of vacuum and thm starting." a "From the above, it will be seen that there is no difficulty in moving an additional engine attaLhed to Mail/Express or Passenger trains if the engine is moved right up to the next engine chang- 'ing statioh. Considerable shunting is however, necessary it attachment -or detachment is required 01route and extra time will haw to be provided for the train for performing this shunting." "Delhi to New Delhi is a heavily congested section. Movement of light engines between Delhi and New Delhi can only be possi- scheduled or Passenger . , ble by double-heading Mail/Express trains. During rush hours, it is almost impossible to provide either additional time required for performing shunting to detach the second engine or to keep free any additional line tor the shunting to b; performed." "AH these points and difficulties were considered by the administration before a decision was taken to run Taj Expresf double- headed betwen Jhansi and Agra." 5.8. Audit have made the followirlp observations on the cast: "It has been stated in reply that movement of light engines between Delhi and New Delhi can only be possible by double- heading Scheduled MailJExpress or Passenger trains. It is ah- served that the engine link eventually introduced with effect from 1-4-67 involved running of light engines between these LWO stations .without any doubleheading."

"It may also be mentioned in this context that the number of train paths required between Delhi Junction and New Delhi for introducing this link was the same as before 1-4-67 and movement of only light engine was required between New Delhi Junction. The arrival time of lanata Express at Delhi Junction was 18.20 hrs. and the departure time of Taj Express from Deki was 7.00 hrs. next morning. There was thus a gap of more than 12 hours for the movyent of the light engine fmm Delhi Junction to New Delhi. Similarly, the arrival time of Taf Erpras at New Delhi was 22:05.~hrs.and departure time of Jaa?ta Express from ~ehiJunction was 11.35 hrs. next mmm- irrs; leaving adequate time for the movement of the lwt en- @"=* I$ has also been stated in reply that dl the points and difficulties were considered by the Administration before a decision ww , taken to run Taj Express double-headed betwkn Jhansi and Agra. No papers to bear out this statement have been shown to Auqt at any stage so far." 5.9~ The Committee find it hard to understand why engines for lading the Taj Express had to be run doubleheaded over a distance of PIS Kms. from Jhanai to Aka, when they could as well have been movd from Delhi Junction to New Dew, a distance of 4 Wms., by establishing a suitable train-link. The procem of double-head& cost the Railway Ad- ministration a sum of Rs. 2.15 lakhs over a period of one year, after which it was given up, when an engine link was established with effect from 1st April, 1967. The representative of the Railway Boanl himaelf stated during evidence that he did not "consider this to be the most economical way of working." It was, however, argued that the ent$nelink that was established could not have been established earlier, as coagestion on the Delhi Junction-New Delhi section did not permit of movement oE an engine till a 'gnods avoiding line' was built. Even conceding that such movesllRna was impossible, the Committee do not see why the engine link was not established in October, 1966 when the go& avoiding line was built, instead of April, 1967. The Committee hope that the Railway Board will review the position regarding double-heading whenever it is in vogue in the Railways and ensure that it is avoided as far as practicable. South Eastern and Northern Railways--Avoidable expenditure on staff employed on an experimental Scheme Audit Paragraph 5.10. On the recommendations of an Officer appointed for introducing cost accounting system on Railways, the Ministry of Railways (Railway Board) issued instructions to five Zonal Railways between December, 1956 and February, 1957 to introduce the system of maintenance of engine-wise cost data and other subsidiary cost records for all classes of locomotives. Since the scheme was expenmental, periodical reports on the cost data so collected were also called for. The Administrations were also instructed to advise the Railway Board of any difficulty in complying with their instructions. . 5.11. 0; the South Eastern Railway, the scheme was implemented from August, 1957 by operating 15 posts of clerks sanctioned for varying periods between liupst, 1957 and February, 1966. Although monthly mpom were be& mtto the Rdlway Boardeneither the Administration nor the 148 '. Railway Board epecifically evaluated the uccfdnas of the rchana d the (lorirabillty of olontinuing it. After nearly 8 yem, in June!, "15, tbe Ad- ministration infonned the hibay Ward that the main @bjectiveof tbb . &me, namely, control of the overhaui costs of locomotiva was not &hi- eved. < 5.12. On {he Northern Railway, the scheme was implemented ,from July, 1958 and 5 clerks were employed by October. 1959 but athe scheme conld not be implemented due to difficulties experitnced in the booking ot expenditure on stores. Rut nn report was sent to the Railway Board. 'The latter did not aim watch he receipt of such reports. A report was sent by the Administration only in March, 1964, that is, after operating he dieme for nearly six years.

5.13. +he =he& .had been irnplemenmed urr Southern, Eastem and Western Railways, but no additional staff were appointed. 5.14. The scheme was withdrawn in February, 1966. The Ministry of Railways (Railway Board) stated (February, 1968) that the scheme was withdrawn because control of labour cost was to be effected under incentive scheme. 5.15. The continuation of the experimental scheme for such long periods without a proper appraisal of the results thereof meant an avoidable expenditure of Rs. 2.97 lakhs.

[Paragraph KO.48-Audit Report (Railways), 14681. , ,. 5.16. The Committee desired to know why the Railway Board did not evaluate the experimental ,scheme of maintenance of engine-wise cost data and other subsidiary cost records for all classes ot loc'olnotiws till 1965-66 although monthly reports were being received from the Railways since 1957. The Ministry of Railways in a note have stated:

"The Ministry of Railways woultl like to clarify that the working of the .scheme in the selected workshops was constantly under review as can be seen from the following. Joint Directors of the Finance 'and the Mechanical Directorates of the Railway ma& an inv&tigatiun in Much. 1957 and suggested certain modifications to the existing procedure. A Senior Cost A~countantfrom the Railway Board examined the progress made at Kharagpur alld suggest* further modifications in May, 1957. Further invc;stigations were carried out by Senior Officcrs of the Railway Board in November, b9.57. Detailed discussions were held with the Railway Authorities in January, 1958. The Working of fie ,Scheme was dhcud iki ' le C.M.Es' conference 'in Novemheri 1958, and ftiizhd*erriimfh& b *-: " ' $*< . by the Director, Mechanical. Engineering, Railway Board in the middle qf 1959.

The question of continuing the experimental sdmm or otherwise was apin gone into detail in 1960 but a final decision auld not be taken as the main file on which the matter was being pursued was lost about that time. The xhmne continued as there was no really pod alternative immcdiatelv available. A final decision was taken when the incentive scheme was fully i&plemented, in the context of which the cost of labour was automaticaliy controlled, while dl:. bt~camlining of the production Office made available an adequate bystcm of control over the cost of stores through pre-itlspection.. However, the Ministry of Railways regret that the matter wu not progressed with appropriate expedition mainly on account at the relevant file not being available."

5.17. The Committee enquired whether any comparative study of the cost of maintenance of lommotives in different Railways had been undertaken and w-hat steps had been taken to ensure that such expenditure was kept to the minimum. In a note, the Ministry of Railways have stated:

"Studies have been made by the Railway Board of the cost of overhauling broad gauge steam locos 011 different Railways. ?'here is substantial variation in operating conditions on different Railways, in the condition of boilers, the type and age ot locos. The amount of work done in each workshop is also dependent on the facilities available in the workshop and in the running sheds. Thereiore, a comparison of cost of overhaul within even the same Railway cannot yield any worthwhile conclusion. much less a cornparim1 of POH costs on different Railways.

The cost of overhaul of steam locomotives is being regularly analysed by individual Railway ~dmikrtrations;md all possible measures taken to keep it down. The cost of overhauling !ommotives is made up of the cost of labour and of material and with the overhead charges relating to each. It has been possible to %tandardise the labour cost element after the introduction of the incentive system of payment. 0 Control over the cost of materials has been achieved a$ the incentive JcAeme epvisagts predetermination' of the components to be complhte~replaced anew and the components ta'be repair- D ed and fitted during overhaul of l~c~motive~with an independent agency, viz. production conuol, being rcsponrible for . indenting fop material&"

5.111. The Committee observe from the data in theqbwt docummo to Paliarnent that the position of I~~~motivcfleet in ,fhe Indian Railways &er the years was as shown below:

Year Steam Diesel ~lectric Total

It will be seen that in 1968 the total number of locomotives had increased by over three-eighth of the number in 1951. It will also be seen that since 1966 the number of steam locomotives in use has been coming down.

For the repair and overhaul of rolling stock, including locomotives,.

there are SO major and 18 minor workshops on the Indian Railways. ' The total number of locomotives of all tractors given periodical overhauls and repairs in the workshops is shmbelow:

Broad Gauge Metre Gauge Year -- . Overhaul Repairs Total Overhaul Repairs Tota 1

5.19. It will be seen that ova a .third of &e total lonrmotive fleet annually undergo overhauls or repairs. C

The repairs and maintenance of rolling :tali constitute one of the major item of revenue expenditure on the Plways, the expenditure

t amibutab1c to toannnrim kiag the major component of this itcm of cxpmditure as &own kLow. -- 1965-66 1966-67 1967-68 ------t . Rs . Rs. Rs .

Carriages and wagms 41r51,512000 44,67,75,000 48,82,96,000 - - _-- . ---- Total . 85,14,14,000 91,06,48,000 100,34,04,000

The average cost of repairs and maintenance to locomotives for three yearb encling 1967-68 is given below: r

(G~sryet equated engire Km)

Steam 0.69 0.73 . , 0.80 Diesel 0' 15 0.19 0.25 Electric 0.36 0.06 0.08 All Traction 0.61 0. 65 0.70

It would be seen that the average cost of repairs has been going up. * 5.20. An analysis of the figures of cost of repairs and nnintmance in uhe various Railways indicates that they varied from Railway to Railway. Thus for 1967-68, the following was the cost of repairs and maintenance of all tractions of locos:

------. - ---.-- ---.A Northern Eastern Westerr South- Cer tral S.E. ern

Steam . . 0.40 0.71 0.51 0.84 054 0-51 Diesel . 0.57 ...... 0.44 . . 0 Diesel electric . . 0.07 0.34 0.30 0.05 0'20 0'15 Electric . 0.04 0.29 . . . . 0'32 0.~3 8&. The Committee obwmc &at an cxperimcatrt rdranc far umr of amt data on laccrmotivas in tbe varioum lkd!ways in- kt- December, 19s and Fdnuay, 1957 was not "pr- with rppsopnrppsopnatc- expedition" from 1960 enwards, whm the file on the subject Wotr Ulost." The ecbeme continued till 1966, whea it was given up after the fatraduction of an incentive scheme in the worksttops. Tbe Mimisvy d Railways have stated that as a result of the incentive scheme and tht procedurm evolved' "for control over the cost of stores through pre-iasper- tion", it hao been possible to check effectively the cost of repain, and over- haub of locomotives. The trends of expenditure over the years on the repair and overhaul of locomotives suggest, Imwcver, the need for devising more dectivc checks in this respect. The Railways have duriq the last three years Ixcn slwncling Rs. 85 crores to RR. I0crorcs 011 tl~crepair and maintenance of rolling stock, a little ovm half of this expenditure being pourcted for by l~comotives. The average cost of repairs and maint&ance of rolling stock, a little over half of this expenditure being accounted for by locomotives. The average cost of repairs and maintenance per equated enginc kilomctrc for all the Railwayq togethcr has gone up from Rs. 0.61 in 196566 to Ks. 0.70 in 1967-68. The cost has been subject to very wide variation from one Railway to another. Thia sug- gate the need for a closer study of the problem. The Committee would in this connection like to comrnc~idthe following lines of approach: (i) Detailed work studies sho~~lrlbc conducted in the various loco sheds where overhauls and major repairs arc undertaken with a view to effecting improvements in the methods of operation and achieving efficiency and economy. (ii) The various operations involved in overhauls and major repairs should be standardisecl and suitaide nonns evolved on thk basis. Such norms would facilitate comparative evaluation of the performance of different workshops and stimulate healthy competition amongst them.

(iii) Based on the standardisation of the various operations, some suitable form of batch costing should be evolved. For this. purpose, the experience of undertaking like the Chittaranjan Lommotive ~orkkcould with advantage be drawn upon.

(iv) There has been a progressive reduction in the number of steam Iocomotives in use since 1966. due to increasing dieselisation and electri6cation. 11 would, therefore, he necessary for the Railways to assess to what extcnt idle capacity has ken created in thc steam loco sheds and such capacity could be ugefully diverted for maintenance/repairs of diesel/elecuic locomotives, so that duplication of facilitb(cou1d be avoided. 0 s Audit Rragrapb

5.22. Four out of xvuu major timber booking stations on. the B.C. d h1.G. sections of South Central Railway do not have weighing facilities. "The, wagons booked from three out of these four sfations are marked for weighment en route at Kazipet. I11 practice, however, only a few wagpns are beiv weighed at Karipet on account of inadequate capacity of the yard and other operational considerations. In the case of consign- rncnts which could not bc weighed en route and e\en at the tiestinatinn stations frcighe is collected only for the minimum chargeable weight of 150 quintals in the case of H.G. wapns and 110 quintals, in the case ot M.C. wagons.

5.23. A test check of wagons booked from Lhe stations without wcigli bridge facilities during the period oi tbur months from October, 19titi to January, 1967 disclosed that 74 per cent of R.G. wngons and 48 per cent of M.G.wagons were loaded beyond the minimum chargeable weiqhts. The loss of revenue due to non-weighment was assessed at Rs. 8,179, that is, about 4.5 per cent of the inv;oireci frci~!~tof Rs. 1.80 lakhs in rtspert of the wagons covered by the test check. [Paragraph No. BY-Audit Keport (Railways), 19681.

5.24. The Comniittee enquired what the annual revenue l'rom timber traffic originating from the four stations was. They were informed that the revenue in 1967-68 from timber-traffic originating from these stations, namely, Bellampalli, Sirpur Kaghaz Nagar, Mancherial and Dandeli was Rs. 10.13 lakhs. The Committee were also informed that "proposals for provision of weigh bridges at Bellampalli, Sirpur Kaghaznagnr and Man- cherial were examined in the past but it was not considered justified on the basis of the quantum of traffic requiring weighment to install weigh bridges at these stations. The proposal to install a weighbride at Dandeli is still under examination. The present position is that all the four stations are without weigh-bridges."

5.25. The Committee desired to know whether any comprehensive review had been carried out regarding the provision of weigh-bridges at major timber booking stations on the Railways. They were informed that "The Central, Eastern and Southern Railways have reviewed the neeti for provision of weighbridges for the weighment of timber wagons and. have corn to the conclusibn that the facilities for weighment of tim- - her as already existing are adequate. Northern Eastem Railway carried out a review in the past and as a result, 5 weigh-bridges were instalhi

1 krwacn January, 1960 and August, 1965. Other Railways have WK yet CUrjed out a comprehensive review ob arrangements of weigh-btEdgco for rhe tccigtunent of timber and hare been told to do so."

6.26. The Cormnittee note that a test check of w~gonrcPyiag timber bodred from October, 1966 to January, 1967, at four stations in&e Ccn- tml Railway, which lack weighbridge facilities, dieclod of wagons beyond the minimum chargeable weights and o coquent & af revenue of Rs. 8,179. As the annual revenue from the timber vaatic originating at thew four statione iu of the order of Rs. 10, lakhs, it w pro- bable tbt the loss ova a period of one year will be fairly aubtantial. The losses might ahcontinue to recur. The Committee note that at three out of these four stations the Railway Board do not consider the installation of these -weighbridges justified on this basis of crafFic. Aa thtw statiorvl carry timber traffic originating in the Chanda forests, the Committee would like the matter to be kept under constant review. Pen- .ding the installation of weighbridges, the question of intensification ob swpriae chedcs should be considered. The Committee would also like a speedy decision to be taken on the question of installation of the weighbridge at the fourth station which the Railwayfi are at present mted to be cansidering. Easrtern Railways-Delay in recovery of charges in respect of sidings.

Audit Paragraph

5.27. Para 27 of Audit Rcport (Railways), I901 brought out the delay in the recovery of interest, maintenn~tceand establislmlent charges fronl the siding holders on the Eastern and other Railways. * 5.28. The outstandings on this account, however, continued to accumulate. On the Eastern Railway an amount of Rs. 56.85 lakhs was outstanding at the end of December, 1966. Out of this amount, Rs. 5.82 lams related to periods upto 1961-62. The arrears were particularly heavy in Sealdah, Asansol and Dhanbad Divisions of the Railway where the outstandings at the end of December, 1966, amounted to Rs. 11.93 lakhe. Rs. 20.25 lakhs and Rs. 20.15 lakhs respectively.

5.29. The balance at the end of June, 1967 (in a few case to end of August, 1967) was staled to be Rs. 33.27 lakhs.

[Paragraph No. 43-Audi t ,Report (Railways), 19681.

5.130. The Cammittee were infornled that on the Eas~~uRailway a -sum of Rs. 56.85 lakhs remained outstanding at the end of December, I%%. Thio amount comprised Rs. 27.80 IaLhs on account of interest and maint- charges and Rs. 29.04. lakhs on account of establishment charges. Out of Rs. 56.85 lakhs, an amount of Us. 13.03 lakhs was outstanding on 30th September, 1968 from all siding owners the balance hiving been recovered. The bulk of outstandings related to National Coal Devdopment Corppration (Rs. 4.98 lakhs), Calcutta Port Commis- sioners {~s.2.74 lakhs) and Hindustan Steel (Rs. 1.01 lakhs). The detailed position in regard to recovery from these three parties were as followl: "National Coal Development Ckqmration-Rs. 4,97,780.8(33 A meeting was held with the N.C.D.C. authoritlcs on 25th April, 1968 with a view to securing expeditious recovery of the outstanding dim horn that party. It was decided in the meeting that by the end of May, 1968 all outstandings on account of interest and maintenance rharges for N.C.D.C. sidinej; opened to traffic would be paid by them. In respert of additional cost aud interest and maintenance charges on account 6f bfd estimates pertaining to the sidings, these would be sent to N.C.D.C. for their acceptance and immediately on receipt of the same, they should pay the amounts due. As regards Gidi 'A' siding, there was difference of opinion regarding &iargiug of capital cost and the interest charges to the N.C.D.C. who wanted to represent the matter to the Board for reconsidera- tion. Regarding question of payment of tollage by the Rel- gara Colliery for the use of a portion of Gidi 'A' siding over which their wagons have to move, an agreement was proposed to be signed after which payments would be made accordiqly with retrospective effect." "Calcutta Port Commissioners-Rs. 2,73,996.48: The dispute with the Calcutta Port Commissioners has since been sorted out with the execution of a new agreement with retrospective &ect from 15th August, 1947. It is expected that it will be possible to persuade the Port Commissioners to pay the outstanding dues of Railway as early is possible."

I "M/a Hindustan Steel Ltd. (a) Dugda Coal Washey-Rs. 67,321.08: The accumulation of the outstanding dues is attributable to a dispute raisedoby Hindustan Steel Ltd, over the apportionment of the cast of different categories of staff posted by the Rail- way at the Exchange Yard. A series of carrespondmce wee excbqd between tfre Wash- rullabl.itias and dra lbilq and a number of meeting* were held to solve the disp\lad pohts. After the dispute was fcydlved, all the staft bilb hed to be recast on the basis of apportionment of cost agreed up, and mrubmitted to the party. The Washcry authorities hare now contended that the mutiny of thebills has revealaj mmC discrepancies and it was agreed that the party would send their repr&tatives to the Divisional Office at Dhanbad fqp. jdht check of the bills to resolve the discrepancies. The fbint chedc of bills has started from 29th April, 1968; The pvty has assured payment after the joint check of bills is cump1eted. (b) Patherdih Coal Washq-Rs. 5 I ,963.45: An ampunt of RQ. 18,285.64 has already ken paid by the party. The bills in regard to the balance amount of Rs. 33,647.81 are being checked bv them and they have assured early pav- mmt." 5.31. The Committee desired to know why he charges were allowed to accumulate. They were informed that there were as many an 506 Ablrirred and 152 Private Sidings on Eastem Railway. 'The outstandings dated to a small number of sidings and the majority oE them had not defaulted in this respect. Although bills for the recovery of charges were prdarcd in time, certain big undertakings and Public Sector concerns who accounted for over 80 per cent of these outstandings (to the end of September, 1968) raised a number of objections. It was mainly due to the delay+In resalving &hedisputes that the char~esrecoverable from them had remained outstanding so long. 5.32. The Committee were informed that there was no procedural lacunae or negligence on the part of the staff in prelerring biHs and chasing recovery of outstanding dues. 5.93. The Committee note that, out of a sum of Rs. 56.85 lakhs re- velrable as at the end of December, 1966, from various Pding boldem in the Eastern Railway, a sum of Rs. 14.68 lakhs was still awaiting rearvery at the end of July, 1968. The bulk of the recovery related to public undatalrings who have disputed the basis of charges. The Golamittee hoped that the matter will be speedily sorted out and the outstanding dues expeditiously realised.

Central Railway-Delay in recoveries from ,Defence authorities Audit Paragraph 5.34. Interest, maintenance and depreciation charges in respect(. of rolling staL built or exclusively reserved for pefence authorirl6 W rC. wild It;o be reamed from &em. After it was pointed out by Audit 1n 3eSin;lruy, I963 that recoveries in respect of the year 1958-59 for 55 coaches were not made from the Defence authorities, the Railway Administration ' preferred a claim for Rs. 5.26 lakhs in July, 1965. This t lain1 was rejected by the Defence authorities in September. 1965 as time-barred. Further chips by, the Administration for a sun1 of Rs. 5.32 lalrhs on account of 9 coaches and 172 wagons for various periods from 1958-59 to 196344, pra fwd in June, 1966 and April, 1967, were also similarly .rejected as time band. At this stage under-recovery of Rs. 5:40 lakhs for the years 1953- 54 to 1963-64 also came to light. Recovery of amounts aggregating to Rs. 15.98 lakhs thu'i rcnnainh tn 1~ settled.

5.35. The Railway Administration stated (February, 1968) that the question of recovery of these charges was being cjosely pursued by the Ministry of Railways with the Ministry of Defence, and that disciplxnary proceedings against wme st>& were in progress. .

'[Paragraph No. C4-Audit Report (Railway), 19681.

5.56. The Committee enquired whcrher the delay in raising the claims had been investigated to ascertain whether there was any lacuna in procedure and what steps had been taken to ensure that charges were promptly riiised in future. The Ministry in ir note stated, "The delay in raising the claims against the Defence Department is not attributable to any lacuna in procedure, which provides for maintenance of up to date regis. ters both by Mechanical and Accounts Departments and billing of charges in respect of a11 wagons/coaches. The lapse is mainly due to failure to follow the prescribed procedure and action is being taken against the staff responsible. The procedure is further Wined and a detailed joint procedure office order has since been issued by the Central Railway pre viding for rigid watch on the timely preparation and submission of bills and to ennwe against any omission."

5.37. In reply to a question, the Committee were +formed that disciplinary proceedings against the staff found at lault were at an advanced stage and were expected to be finalised by the ehtl of November, 1968.

5.38. With regard to the present position, the Committee were informed that the Defence Authorities had not resiled from their original stand and the claims were tinre barred and, therefore, no recovery could be made in regard to the outstanding issues. The matter was, however, being .pursuedoand the question was proposed to be discussed in a meeting . the Officers of the Defence Ministry. * s 5.39. The Committee regret to note that ifaims amounting to R* 15cdll laldu for maintenance and other cxpnses incurred an rolling aaf d tqvDefence Authoritits were not preferred by the Ctntral Railway in the and were rejected by the Defence authorities as time-barred. It is mupdahg that the claims were not raised till Audit brought up the math ud even after Audit had drawn the attention of the Railwavs to khe position, it took about two and a half yem to prefer the claime. The Conunittee note that action for fixing rc~pnsibilityin this case is mda way and that the Railways are negotiating with the Defence authorities for settlement of the claims. The Committee would like to he appriaed of the final outcome of thew efforts. EXY~NDITIIREON STAFF Cent& Rqilway-Avoidable expenditure on a scheme for brevention of thefts Audit Prapragh 6.1. The prinicipal duty of the ailw way' Protection Force is the protection and safeguarding of Railway propcrty. In Jhansi Loco Shed, homing about 142 engines, there were 72 men of the Force. The loco shed was protected by a boundary wall except for a few yards which was covered by barbed wire fencing ant1 the Railway Protection ~orck 5taff were posted at each of the five entries into the shed. 6.2. Notwithstanding the posting of these Railway Protection Force men (at an annual cost of about Rs. 85 thousand) the authorities of the Jhansi Division introduced a scheme, with effect from 10th August, 1965, for eliminating thefts of costly fittings from locomotives, accotding to which one engine was to be entrusted to one shunter throughout the period of its homing and repairs in the shed. Accordingly, 32 running staff were put on this special duty round the clock in three shifts and the resultant vacancies were filled by chain promotion from lower categories, the vacancies in the lowest grade being filled by casual labour. Sanction of the competent authority for the employment of running staff in this manner was, however, not obtainefl. The scheme was given up after about a year, with effect from 27th August, 1966, without any recorded reason. The expenditure on the scheme was Rs. 46 thousand.

6.3. The Administration stated (January, 1968) that the post fncto sanction af the competent authority had since been obtained and that the scheme was intended to ensure that engines were. not handled by too many men. It may be stated that the multiple handling was not avoided as men were employed in shifts. ~urtkkr,the thefts were not eliminated. paragraph No. 45-Audit Report (Railways), 19681.

6.4. In a note to the ~ofnmittee,the Ministry of Railways stated that on account of ,thefts of loco fittings 'in Jhansi Loco Shed the Railways sustained a loss of Rs. 7,360 during one year before the posting of shunters (viz. before August, 1?65) . During the period the shunters wert. posted on this duty (i.e. tram AU~WL,l%5 to Aqpc, 1966) the lam amounted to Rs. 3,030, whereas for the rubregwnt two yean after thc "heme was abandoned, the losses amounted to Rs. 1399 adRs. 2,186 respectively. 6.5. In reply to a quevtio~~whether the question of improving the security arrangements in the Jl~atlviLoco Shed wa not taken up by the Divisional autlloritics with the Chief Security Officer at the Head- quarters Oflice belore the scheme was introduced, the Ministry of Rail- ways have repliccl in the negative. 6.6. The Committee are suqdsed to learn that to prevent thefts of k'o fitting3 which amountcd to Ks. 7,400, one of the Divisions in the Central Railway initiated a hcl~cmefor detailing loco staff on duty during dae 'homing' of locotnotivruj at a cost of Ks. 46.00. It is regrettable that, before introducing the scheme, the Division failed to obtain the sanction of the compctont authority or even to consida in consultation with the Chief Scmtrity Ofiicer whether the existing security arrangements could be improved. The Committee. note that the scheme has since been given up. The Committee desire that action rrhould be taken to ensure that case; of this rype do not recur.

Southern Railwiiy-Avoidablt. t.xpctnclitilrc* on Railway porters Audit Paragraph 6.7. 'flw extant rules pwirlc. illat sa~ictionsto posts with a long period of curreric~its well iis sanctions of a permanent nature should be reviewed periotlic;~lly so that the sanctions may be revised iT such a course is prompted by any event. 6.8. It was noticed in Audit in April, 1967 that, in respect of 16 stations, while employment of only 184 porters was justified on the basis of yard-sticks laid down by the Administration, the number actually employed was 41 1 involving an avoidable expenditure of about Rs. 5 lakhs per annum. 6.9. The Administration stated (December, 1967) that application of the yard-stick to individual stations had to take into account the layout of the station platform, the nature of the traffic etc., and hence the avoidable expenditure was not of the magnitude indicated. It was further stated that on :I special review conducted o: receipt of Audit observations for the 16 stations, 59 posts were surrendered and that a further review in respect of other station; was in prop. avoidable expenditure in the o~erationof these 59 posts for the years 1965.66 and 1966-67 was Rs. 1.22 lakhs. b paragrap$ No. 46, Agdit Report (Railways), 19g8J # QlU TPc CwMiuee were infdthat gausally qpenking, M, yam&kk for pmvi.ioa d srilwly portcn had been laid down bj tht . eW~ay&wrd. The Zolul Railways prescribed yardsti* f+r main ~tejpiawhenever considered nuwary and feasible having regard to the locJ csnditioas db woricing. Whur such yardsticks did not aust, t.+c mqth of staff was &tennineti from time to time on the brrsls of actual work-load and other attendant factors. In ~ar&1968, i~~uc- tima were issued to the Railways that, in view of the fact that there had been a considerable change in the conditions d working due to provision of additional facilities, labour saying devices, standard of communications etc., the ground conditions used for evolving the yardsticks earlier might have changed and might be no more relewnt to the pre- smt working conditions and that therefore, an jmmediate. review of the yardsticks in vogue on each railway should be undertaken. Besides, according to the standing practice as embodied in Rule 307 of the'Rail- way Code, a periodical review was carried out of all sanctions for post8 including permanent ones. "la the present context of difficult financial position, all Railways are making a concerted effort to make reduction in staff strengths and substantial economies have been effected.':

6.1 1. The Committee enquired during evidence why the kouthern Railway appointed 227 porters in excess of requirements. de Mem- ber (Staff) Railway Board stated: "The Southern Ralway laid down that there shouId be for every 200 mauncb of pods one goods shed porter and for 85 maunds of parcel, one parcel porter. hat was a general yardstick laid down for assesing the porters. This yardstick was not to be taken as sacrosanct for all the stations under all the conditions...... This is a general yardstick hr the weight portion of the work...... This yardstick was to be applied to the quantum of bad only and did not allow for other factors...... The other conditions are: stackinq of consignments, reweighment of narkages and consip ments which are damaged, taking out an inventory, loading and unload- ing of cash chests...... etc...... So in actual analysis the Railways fint apply the yardstick for the load and then thke into account the

other factors." I 6.12. The witness explained that the figure of 184 porters mentioned in the Audit paragraph took into account only the weight factor. He added: "The actual requirement of porters decided on weight yardstick is 184 and the actual crn~lovmentwas 411. The requirement on other facton worked out by the Railways for other items of works was 3%extra poam. men there was the auestion of restqivens for all catmodes af dass TV staff at the station, which was provided for in the porn category. All this combid, the total figure medawn to 952. The fore, the Railway surrendered 59 posts which were found surphu afta applying a11 theie fktors." The witness further stated that even More the Audit paragraph was received, 31 ports had not been opv~tcdby the Southern Railway and the total of the 59 surrendered. "It will not be " quite correct", he said, "to say that there ha been any avoid;rbk expenditure by keeping the surplus staff. It is a question of carrying put a review as quickly as possible...... 6.18. The Committcr enquired under what circumstances the 59 posts of paten originally sanctioned for these stations subsequently kcame excemive. The Ministry of Railways have in a note stated: "Out of the 59 posts, 49 permanent posts were created prior to 1951 and the balance 10 temporary yosu were created in 1953 for Mach6 Egmore Pala1 Office. A11 these 'bts were created on the basis of the work-load then existing. Parcel traffic at individual stations shows fluctuating trends. But a review of strength of staff has to be based on the poaitive trends of traffic movement rather than any sudden spurt or decline. When It was found upon a review of traffic trends that there was justification for surrender of posts, 59 posts were surrendered. This surrender of posts wG given effect to only after proper assessment of the work-bad." In reply to a further question whether due to change in ground conditions, due to provision of additional facilities, labour saving d& etc., a review of yardsticks for different categories of staff had been carried out, it has been stated: "Only the Western, Southern and South Eastern Railways have so far sent their comments and wen these are not complete." "The review of yardsticks is laborious and it will be some time before any significant progress can be achieved." 6.14. The Committee note that during the last three years the wage- bill of the Railways was as follows: (In crores of rupees) -. -- Cost nf Staff Class of Staff - 1965-66 1966-67 1967-68 163 6.15. The Cornnuttee note that the Southm Railway carried on its rol!8 59 posu of porters in excess of requirements, 49 of than smcdoned pliar to 1951 and the resC in 1953. The posts were surrendd some time in 1F7. This suggasts that a periodical review of the strargth of the establishment was not carried out by the Railways as provided for in the sthdhgprocedure. The Committee also note that the Railway Board themselves feel that, due to the change in ground conditions that have occurred over the years, the yardsticks in vogue for the provision of various categories of st& on the various Railways need mview. The Railway employ a substantial establishment. and their wage bill is annualky of the order of Rs 330 to 350 crores. The need to effect economies in tbia field, therefore needs no emphasis, partidarly as the Rajlways have now run into a deficit The Committee hope that the Eflticiency ~ur&uof the Railways will under take a systematic study of the major categories 01 staff and evolve realistic norms for those categories taking into account the local conditions obtaining in the individual Railways. OTHER TOPICS OF JN I'EKf31

Audit Paragraph . 7.1 Particulars of lows adjusted in the aLcounts for the year are mentioned 'in "Annexure 'H' to the Appropriation Accounnb of Rail- ways in ,Fndia-Part, 11-Detailed Accounts." The total amount of losses adjusted during the.year was Rs. 228 lakhs as against Rs. 184 lakhs ad- *. jued in the previous year. The details of the losses under broad categories arc given below:

Reasons fi-w losses Amount) (In lakhs of rupees)

r. Damage to Iia~lwayproperties caused by accidents . 65 2. Thefts (including thefts of fitii~gsin Rolling Stock) . 53 3. Loss of'stcel duc to sinkage of a vessel in December, 1962 . 55 4. Losses caused by natuyl cdamitics such as floods, storm, fire, etc. . I7 5. Loss arising from civil disturbnilccs 13 6. Inefficient balances under suspense heatis and irrccoverablc overpayments t.) staff, conrxtors, etc., written off 8 7. Other losses ' . . 17 , Total 228

7.2. The losses due to accidents were adjusted on six Railways, namely, Central (Rs. 26.6 lakhs) , South Central (Rs. 15.1 lalrhs} , South-Eastern (Rs. 7.6 lakhs) , Northern (Rs. 6.6 lakhs), Southern and Western (Rs 4.4 lakhs each) Ra'ilways. No loss on account of add- ents was adfisted on Eastern, North Eastern and Ndrthaast Frontier Railways for the three years ended 1966-67 4 184 . L 7.3. me?hewnenal incrmR a the wl amount d Lor .ttdb+c@ to ihdta durmg lMS-66 was commented upon in para 14 of the Audit Pbpt, Railways, 1967. The total amount of lam on this account ad- jwtel during the year under repcrrts ahowed a funher increase d 'Rs.3 Utu over that in the previous year. As in that year, bulk of the Lors wqadjusted on the lfollowing Railways:

(In lskhs of rupees)

I. Southern 13.8 17 .I

2. Central . , . 11.2 9.8 3. South Centr~l . . 6.3

4. Eascrn 14.1 11.9

5. Northern s 7'8 4'5

Total 46.9 "1 49.6 .--- 7.4. The Public Accounts Committee in their 32nd Report (Third Lok Sabha) desired that the losses attributable to theft of fittings should be assessed separately. These losses have, however, not been exhibited separately except by Northern (Rs. 2.87 Iakhs), Northeast Frontier (Rs. I5 thousand) and South Central (Rs. 6.24 lakhs) Railways although the Ministry of Railways issued directions do the Railway Administra- tion in November, 1965, as to the procedure to be adopted for determining the losses due to thefts of fittings and as to the method of assessment of their value. The Ministry of Railways also instructed that the losses should be investigated with a view to taking adequate rcme- dial action. [Paragraph No. 8-Audit ~epoit(Railways), 19681. s 7.5. The Committee enquired whether the Railway Board had investigated the reasons for heavy incidence of thefts, particularly in South Eastren Railway, Southern, South-Central, Central, Eastern and Northern Railways. In a note on this point, the Ministry of Railways have state:

''The cc~lcentrationof crimes on thia Railway is around the Metro- politan towns of Bombay, Nagpur (Ajni) , Bhusawal and Jhansi. The worst affected division is #the,Bombay Division which ?a due to um- mtration ofhdustry, large number of floating population and &irdiuda The terminating point ot several important trainr is Bombay where thefts occurring elsewhere are recorded. 'i 7.6. Special measures were taken by way of pasting of escorts on running trains on vulnerable sections, stabled coaihes in vulnerable yards and surprise checking by supervisory staff over these arrangempts, strengthening of crime intelligence branches, developing of intelligence, organ is in^ raids on receivers of stolen property with the assistance of police. Eastern Railway 7.7. This Railway covers thickly populated areas with indiistrial and labour population. The law and order situatior~in this area was also far from saiisfactor~. "rhis had givcm greater scope to criminal elements to 'indulge in thefts. The stolen articles like OHE, cast iron equipment etc. found ready market in the ancillary industries abounding in these .areas. 7.8. The black spots in this Railway are the following sections and yards: - daily-~handerna~ar Howrah Coaching Yard, Bandel Yard, Sealdah Coaching Yard, Moghalsarai Yard,

Intensive measures taken inklude patrolling by armed parties in affected areas which resulted in a large number of encounters with armed and desperate gangs and opening of fire by the R.P.F. Several trains in vulnerable areas were also escorted by R.P.F. 7.9. The assistance of the GRP and State Police was sought at highest level and raids conducted have ~ieldedlarge nmounts of stolen property. Northern Railway. 710. Northern Railway passes through densely populated areas and has largest mileage and a number of branch lines susceptible to thefts. Industries in and around DeIhi and Punjab as also a large number of metal industries find a ready market for stolen goods. C 7.11. Some of the affected areas arc areas around Delhi, Delhi-Palwal. 'Tundla-Shikoabad, Moradabad-Hardoi, Lucknow-Faizabad. c 7.12. Strengthening of Crime Intelligence Branch in the affected Ifivisions helped in organising raids a$ai&t thieves and receivers of stokn property. , Southern Railway

7.13. Prior to its bifurcation, th& was one of the longest and mwt important Railways. Even now Madras and Bangalore have liwge industrial belts around them. The other affected areas are Basin Bridge yard, hklras Central, Guntakal, Renigunta. Mysore, Villupuram. 7.14. On the Southern Railway also the Crime Intelligence Branches have been strengthened. Extensive use of dog squads'on Southern Railway has yielded good results. 7.15. Similar special measures which include study of crime pockets and intensive patrolling thereon by armed parties, patrolling in akted yards by armed parties and dog squads, strengthening of intelligence an& cleveIoping of sources as well as keeping a watch on Railway and outside staff suspected to be involve

South Central Rniluwy 7.16. The concentration of crimes on this Railway was mostly around' Secunderabad, Vijayawada, Guntur and Masulipatnam, as also on Hubli Division. 7 7.17. Strengthening of crime intelligence in the affected places, as also surprise raids by the RPF in co-ordination with the Police, against the thieves and receivers of stolen property, have resulted in recovery of large number of Dynamo belts etc. along with the arrest of notorious criminals. 7.18. The Committee note that over the years claims paid by the Railways have been increasing. The claims paid, the portion thereof relating to goods lost or pilfered and the exbenditure incurred on the Railway Protection Force during the three years 1965-66, 1966-67 and! 1967-68 are tabulated below:

(In crored of rupees) (i) Net amount of claims paid (ii) CIaims paid attributable to lossltheftl pilferage . 3-84 4-30 5'87- (iii) Expendim on R.P.F. J. ("1 Average Np. of days for settlement of claims 31 '07 29.2 32.8 7.19. The Committee enquired why the losses on account of thefts of fittings were not being exhibited separately, as recammended by them in their 32nd Report (Third Lok Sabha). In a note it has been uta&d that main instructions were issued by the Railway hard in Novem- btr, 1965. r

"These instriictionu prescribed how the loss on account of dtficienciea of fittings attributable to theft should be assessed and included in Annexure H-Statemet~t of losses etc. to the Appropriation Accounts; but did not, however specify that this item of loss should be shown separately in the aforesaid statement. As stated in the Audit Para itself, these losses for 1966-67 had been shown separately by Northern (2.87 la.), Northeast-Frontier (15 thousands) and South-Central (6.24 lakhs) , but it has been ascertained from other Railways that they also had duly +ssd them but had grouped these losses with other losses on ecoMlnt of theft. During 1966-67 the losses of fittings falling within the purview of Rajlway Board's aforesaid instruction$ were as under:- -. - Railway Amount (in thousands of rupees)

Eastern 9387. Northern . 2,87

North-Eastern , 14 ~orthastFronier , Southern '30

South Cenral ' 6324

South Eastern . 18. Western . I4 t - ..-. - .. . .- . ------*This is under verificatbr~by Aujit; , Tbe total Iars due to dsmpge cadby acddenb during and is bdcn0: . 1-7 &~DWPY-~SC Railway 196465 1965-66 1964-67

(Amount in thousands) s

Cen-rtd ' ' . 7930 23;09 2665

South Central . , . . . b .. South Eastern . 3,35 * 17~68 7263

Total . 34936 64.04 64979or or 0 r 34 lakhs 64 lakhs f$ labs

The account, for 1967-68 have been closed only recently and the preparation of the Appropriation Accounts and the supporting annexures is in hand. The figures of losses on account of accidents relating to 1967-68 are. therefore. not available at this stage."

7.20. The Committee are concerned over th& increasing incidence of thefts on tbe Railways. With the growing number of thefts, the Railways have a150 been facing claims from parties on an increasing wale. Some idea of the magnitude 04 the problem can be had from the fact! thaq claims paid on account of "losses", theft and pilferage increased from Rs. 3.84 crores in 1965-66 to Rs. 5.87 crores in 1967-68. These accounted for Over threefifths of the net claims paid during these years. The fact that during this period the expenditure on the Railway Protection Force bcreased from Rs. 9.63 mms to Rs. 11.97 crores raises the question whether the Railways have been able to obtain results commensurate with, the heavy expenditure on this Force. The Committee would like the Railway a to examine how bat pe Railway Protection Force could be made dmipe to minimise the vingincidence of thefts. 7.22. The Committee had in their 32nd Rcpan (Third Imk S.bh) mammedd that losses on account of thefts of fittings sdboaki k atdy ahibitd in the Appropriation Aamuntn The Cornmitree dmne that this is i~atbeing done by some of the Railways. The CbmdWe~ desire that their recammendations should be implemented

Crntral Railway-Law due to short recovery of'coal ashes

Audit Paragraph 7.23. The residu-il droppings from coal consumed by the engines etc., arc recovered and utilised for construction purposes and quantities blrrplus to the requirements of the Railways are sold to the publk.. An Expert Committee, which had gone into the question of coal consump tion on Railways in 1958, had estimated that the quantity of coal ash- produced was about 22.5 per cent of the total coal roi~sumed.

794. A test check made in the Jhansi Division of the Central Railway revealed that the coal ashes collected were far below the percentage estimated by the Committee. The coal consumed by the Division was about 6 lakh tonnes in 196465 and 1965-66 from which about 1.35 lakh tonnes or 66 lakh cft. of ashes could have been collected in each year. Against this, only a quantity of 26 lakh cft. in 1964-86 an& 27 lakh cft. in 1965-66 were collected by the Division. 7.25. Apart from the estimation of the Expert Committee, the quantities of coal ashes to be cbllected at each shed were fixed in 1963 on the basis of trials conducted by a Divisional Officer. A total of 57 lakh cft. weto be recovered in the Jhansi Division. in each year, according ta these quantities. 7.26. The coal ash? actually collected and disposed of in the Division fetched rates ranging from Rs. 8.70 per hundred cft. to Rs. 67.50 per hundred dt. On the basis of these rates the loss suffered by the Railways due to short recovery bf ashes with reference to the quantities fixed by the Divisional Oficer was Rs. 10.36 lakhs in 1964-65 and another Rs. 9.65 lakhs in 1965-66. 7.27. The Administration stated (September, 1967) that the asscst. ment made by the Divisional Officer was uilrralistic as it did no dhv for the differing yields on accouat of various imponderables such ar type of coal, type of engine, load of train, etc. The total quantity 6xed by the Officer for recovery was about 19 per cent of the total cad arwb

0' sumed in d-tc Division. The actual iecovery worked out to less than 10 per cent in each year. (Paragraph No. 49-Audit Report (Railways) . 1968)

7.29. The Committee enquired why ash collection in the Division of the Genttal Railwav was so low. They were informed that: "The figures for the percentage of recovery of coal ashes are worked by taking into consideration the quantity of coal ashes accounted for at the tlme of final disposal from the stacks at various locations on the Railways, and the total quantity of coal consumed. Regular accountal of collection of coal ashes is difficult because ashes are dropped from steam locos at numerous ash pits, near water cohmns. on the? line, in the traffic yards, in the loco sheds and at industrial and coiliery sidings. To gct ;iccurate figures for coal ash recovery, it is necessary to appoint adequate staff to colect the required information which would be very expensive and may not be justified. On those Railways, where the ashes have a good demand, and they are easily disposed of by sale. it is worthwhile to make greater efforts to keep detailed accounts. Where the ashes cannot be easily disposed of and form large accum~~lationsin loco sheds, station yards etc., the Railways will not 'find it advantageous to collect and keep detailed accountal."

7.29. In regard to the percentage recovery of coal ash from coal in the Jhansi Division as compared ta other Divisions in Central Railway and some of the other Railways. the following data was furnished to the Chmmittee:

For 1967-68

Approximate percentage of coal ashes Name of the Divkion . recod-

(1) Bombay

e Jhansi 9'94 Other Zonal Railways

Appr0ximat.c percent- Name of the Railway age of coal ashes recovered 0

Southern' 17-20

South Central 14.60 I Western . 7-40

7.30. Explaining the reasons for variation in recovery, the Ministry ot Railways stated: "Ash content in coal varies from grade to grade- superior grades of roal have lesser ash content, while the lower grades ot coal have higher ash content. The quality of coal varies on ditter'ent Railways as well as on different Divisions of the same Railway. The other factors which account for variations are the design of the cn- gine, firing technique and the skill of the engine crew. Between the time the ashes are dropped in the pits and they are finally disposed of, the following factors come into play, the effect of which can vary from Railway to Railway and from Division to Division: (i) The percentage of recovery of coal ashes on a. particular. Division/Railw3y is calculated on the total amoun8t of coal issued on the DivisionlRailway and the ashes accounted for. In many cases, locomotives are coaled on a particular DivisionlRailway and the ashes are dropped in the ash pits situated in other DivisionslRailways. As such, there would be variation In the recovery of coal ashes between Division to Division and Railway to Railway.

(ii) Ashes dropped in pits are cooled by wetting with water before they are removed from the pits and during this prcr- cess, considerable quantity of powdery ashes is mixed with water and flow out. The degree of wetting with water varies from place to place. (iii) Ashes lie in dumping .ground for considerable time before rexnoval for departmental use or disposal b) sale. During this period, some quantity of ashes is washed away by rains and blown off by winds because the ashes are dumped in open spaces. (iv) The accuracy of final accauntal of coal ashes varies from Railway to Railway depending on the reasons as mentioned above. .4s tbe yield and recover? of ashes are subject to variation on account of man); factors hevoncl control. it is not possible to work out any norfns." . 7.31. In regard to the short recovery pointed out in the Audit para, the Committee were intormed: "The shortages yere computed by the Audit with reference to a 3-day trial report by the Divisiol~al Officer. These trials were conducted for an entirely different purpose of gettillg a rough idea of the yield of ashes in conucction with introducing a suitable clause in the contract agreement and were not intended for fixing targets for reco\*ery. As...... , the purpomseof trials by the Divi- sional Officer was not to fix the target for recovery of ashes. . . .The ashes which are collected from the various pits immediately after they are dropped from the locomotive and measured straightway would be much different from the quantity of ashes that is measured after the same has been transported and clumped at specific places after a long time when the ashes are required to be disposed of by auction or for use on the Railways. As such, the assessment made by the Divisional Officer is not applicable for the purpose of assessing the recovery of ashes."

7.32. Audit have offered the following observations in this case: "The point to be appreciated in this case is the low yield of ashes, as accounted for, in the context of sizeable demand for these ashes in the coal market as: revealed by the auctions which actually took place. As mentioned in the Audit Report the coal ashes collected and disposed of fetched rat& ranging from Rs. 8.70 per hundred cft. to Rs. 67.50 per hundred cft. If more ashes had been collected and disposed of by auction, the Railways could have earned substantial sums. If the ashes have no market at all, one could be complacent even if no proper accountal is made." "So far as the difficulties in the matter .of collection of ashes are concerned, these are bound to be the same in a11 the Railways. The fact that some of the Railways have been able to recover and account for substantial perrentages of ashes with referenre to tllp coal conhumed would show that the difficulties are not insurmountable. . . .The ashes recovered in Sarthern Railways was as high as 17.20 per cent. A point has been made out that the assessment made by the Divisional Officer was on the ba.sis ol limited trials. As already stated in the Audit para the percentage assessed was even lower than that estimated by the Expert Committee. With tht inmase in the receipt of lower e;ra& -1 by the Railways (which has the effect of increasing the consumption of cod also) the percentage of recoverable ashes from coal should be even highn." . 7.33. In regard to the Railway Board's observations "that to get accurate figures of coal ash recovery, it is necessary to appoint adequate staff to collect the required informatian, which would be expensive". Audit have bmught the following position to notice. The Railway Board had issued instructions in July, 1967 in which they had brought to the notice of the individual Railway Administrations the fact that it was "essential to maintain proper statistics regarding the reclamation and utilisation of cinders on Railways." The Railway Board had considered this essential as "figures received from Railways giving the percentage of cinders reclaimed to the total coal consumed showed wide variations" and indicated "the need for and the scope of improving the existing methods of picking with :. view to achieving the maximum reclamation of cinders from coal ashes." The instructions issued by the Railway Board contemplated that the Engineering Department should maintain "statistics in respect of the actual accumulation and disposal of ashes" and submit six monthly returns in respect of cinders reclaimed.

7.34. The Committee feel that the collection of coal ashes in the Jhansi Division during 1964-65 and 1965-66 was very low. It amounted to 10 per cent. of the coal consumed against a recovery percentage of about 22 per cent. fixed by an Expert Committee which had gone into the question of coal consumption in the Railways in 1958. From the data furnished by tbp Raihvay Board, it L seen that recovery percentages in the Central Railway aa a whole and some of the other Railways like the Western Railway were likewise low. With the increasing consumption of lower grade coal by Railways in recent years, it should be poseible to get much better realisation in this respect. In view of the fact that coal ashes fetch a fairly subsulntial income to ,the Railways, it may be worthwhile examining why the realishions are at present so poor and whether there is anv slackness or leakage in this respect which needs to be remedied.

Eastern Railway-Excess payment of municipal taxes

Audit Paragraph a 7.35. The Administration acquired a company-managed Railway with effect from 1st April, 1957 with several holdings within the jurisdiction of Calcutta South Suburban Municipality. The holdings were valued for the quinquenials ended Slst March, 1958 and Slst March, 1963 at Rs. 22.770 and Rs. 38,820 respectively for the purpose of recovery 01 municipal taxes.

' 7.36. However, in a resolution irclopted by the hiunicipality in January, 1962, all the l~oldingswere alnalgamated and were revalued at Rs. l,'iCI,400 on consideration of general ;tppreciation of value of land and structures. 'The increase in thc municipal tnses was given retros- pertive effect from 1st April, 1957 antl was paid by th; Administration.

7.37. As Smtions 131 and 158 of the Bengal hrunicipal Act provided that, on anialgam;~tion of several premises, tas assessn~ent should not be greater than the sum of previous assessments, revision in the valuation of a holding during the quinquennial period being permissible only on account of errors of omission and commission,. 'it was pointed out by Audit in October, 1964 that the revision of the valuation (valid uyto 31st March, 1965) antl the payment of municipal taxes on that basis with retrospective effect was not in order. The taxes excess paid for the period 1st April, 1957 to 3lst March, 1963 came to Rs. 1.81 lakhs.

7.38. After protracted correspondence with Audit, the Railway Acl- ministration lodged a claim with the Municipality for refund 'of the excess tax paid in January, 1967, that is, more than 2 years and 3 months after the matter was taken up in Audit.

7.39. The Administration stated (February, 1968) that the Municipa- lity had since agreed to refund the excess payment by way of adjustment through subsequent tax bills.

[Paragraph No. 51-Audit ~e~&t(Railways), 1968.3

7.40. The Committee enquired why there was a delay on the part ok the Railways in taking up the question of refund of excess tax paid to the Municipality after it was pointed out by Audit. In a note on this point, the Department have stated:

"The excess payment was first pointed .dut by the Audit in their note dated 14-10-1964. The Railway did not take up the matter with the Municipality immediately on receipt of that Audit note because at that time they had no reason or material on their records to doubt the Municipality's assertion (made in their letter of 15-9-1961) that the correct figure of earlier valuation of the properties in question was Rs. 2.51 .lakhs (as against Rs. 22,770 for the quinquennium ending 31-3-1958 and W. 38,870 for the quinquennium ending 31-3-1963 meritiorled in the Audit note) . Actually, no record, relating to rllunicipal assessments had been handed over to the Eastt.rn Ra~iwayby the old Iialighat-Falta Railway. Furtl~et,the Kailway h;d already got the valuation reduced to Ks. 1.70 lakh alter much prsuasion and many discussions, during which the Kailway impressed upon the hlui-~icipality that ,;lie value of proper~iesin that area had gone down consequent LI~OI~the closure of the Kalighat-Falta Railway. M'ith this backpoutid, there was no reason for the Railway d- ministration to suspect that the hlunicipality ,would make a false clainr by suppressi~~gthe fact of a previous lou'er valuation,''

"The nest comment of Audit on this subject was contained in their draft para in its tentative form received from the Chiet Auditor in July, 1966. Immediately after that the Railway requested the Chief Auditor to furnish a copy of the Munici- pal Notification showing valuation of the properties at Rs. 38,820 but he was unable to procure the notification. Then the Railway contacted hlls. . . .,Official Liquidators of . the old Kalighat-Falta Railway, to obtain the particulars of valuation of the old Kalighat-Falta Railway properties and the amount oC tax paid by the Company from 1956-57 onwards. Ultimately, is reply to the query made by the Rail- way originally in August, 1966 about the valuation of the old Kalighat-Falta Railway properties as on 31-3-1957, which was followed by personal and telephonic reminders by the Railway's Law Officer, the Municipality accepted (on 8-11-1966) that tHe total taxable valuation of the old Kalighat- Falta Railway properties had really been assessed at Rs. 22,770 for the quinquennium ending 31-3-1958 and at Rs. 38,820 for the quinquennium ending 31-3-1963-the same as funished by Audit. It is significant that only a little earlier the Munici- pality had verbally informed the Railway that their relevant records had been destroyed in a fire."

'The Municipality'has not yet refunded the excess payment of Rs. 1.81 lakhs. Out of the amounts payable to the Munici- pality, the Railway Administration have alreadv withheld (Upto June, 1968) a sum of Rs. 78,498. The Railway have also filed a suit in the Alipore Cour't, the court fee for which was paid on 28th October, 1968." ( "It may be recalled that in February. 1968, the Audit were informed that the Municipalitv had since agreed to refund the excess pa)ment by wa) 01 adjustment through subsequent tax bills. This intornlation yas based on what the Municipal authorities told the Law Oficer of the Eastern Railway in a meetlrlg on 7th Jul). 196;. ?'he I\lunicip:~lit),however, went b~d.on this arid the K.tiln,t\ was obliged to withhold the above sum ot. RI. 78,49K clue to the Xlunicipalit) and also hle a suit in the Alipore Cim1 t for thc b.ilnnre amount due from them."

7.41. The Committee note that remvery of an "excess payment" of mlynicipgl taxes amounting tcu Rs. 1.81 lakhs is pending and chat the Railways have fild a suit in court for effecring recdver?. The Committee would like to be apprised of the outcome of the suit. Central, Eastern, Northern, North Eastern and Western Railways--Deli- very of consignments to spurious jarties '

7.42. In para 33 ot the Audit Keport, Railways, 1962, payment of heavy compensation claims bv the Notrheri Railway in cases where consip~~n~entswere deliveretl to spurious parties against forged Railway Re- ceipts, was brought out. 'The Ministry of Railways (Railway Board) issued instructions to all the Railways in May. 1968, in continuation of lhrir earlier instructions issued in 1959, to take steps to prevent the occurrence of such cases. Cases of fraudulent deliveries, however, continued to occur on the Railways and, during the period from January, 1963 to Tune, 1965, there were 80 such cases, involving compensation claims to the extent of Rs. 5.18 lakhs. The resporlsibility of Railway staff has not so Far (February, 1968) been determined in 44 cases. Of the 12 cases in Iwhfch staff were found responsible action hp so far been finalised in only 3 cases. [Paragraph No. 52, Audit Report (Railways), 19683 7.43. The Committee desired to know whether the Ministry had eahcn any remedial action regarding delivery of consignments to spurious pwties. The representative of the Ministry of Railways stated, "Thir question of delivery of fraudulent railway receipts was very thoroughly ,gone into in 1958 and we made certain proposals to the Law Minist? which they did not find to be capable of being enforced legally. We made the proposal that where the invoice is not at hand then we may withholc? delivery until the man is also prepared to execute an indemnity 1)oncI indemnifying the Railways. The Law Ministry held the view and tightly too that if a man is presenting a railway receipt, you cannot refuse delivery to hi& unless yau can have sufficient proof in your hands that. it ir a lorged railway receipt. Othehyou will have to grant ddiwry ad you cannot claim an additional indemnity bond. This was their view. Then we referred the matter to a Committee of Chief C;omm.ercizl Superintendents and they formulated certain proposals which provided suficient safeguards against the fraudulent delivery taking place and those instructions were issued in October, 15'59. For the C~~mmitteca' Information I might indicate what those precautions were. Where the invoice i, not at hand and somebody approaches for delivery then either the n~anshould be identified by a known party and the delivery given only after proper identification of the party, or, if he w?s not in a position to get I~imseli suitably identified in this manner, the instructions were that telegraphic rommunication should be made with the station from which the railway receipt originated to verify whether the receipt was genuine. Only alter velification the delivery could be given. If a consignment which is mot usually dealt with at a particular destination station suddenly appears there, then it should be verified )from the booking station whether this was a genuine case or not."

7.44 The witness further informed the Commitee that "In a matter of 2-112 vears oat of millions of deliveries there were 30 frauds. Out of these, G were such which nobody could prevent. They were cases where the original railway receipt while in postal transit were intercepted and delivery granted on the basis of those receipts. We could do just nothing about it. The other 74 cases were all preventible if these instructions had been followed. They are cases where the very clearly laid down precautions had not been observed and where staff are definitely respnsi- ble." These cases of negligence an the part of the staff involved, according to the information furnished to the Committee, "cases in which the invoice/P.W. Bill had not been received and the person claiming de!ivery of the consignment was not known to them, but no real action was taken to check up on the genuineness of the transaction. There were also cases in which the invoice/P.W. Bill had been received and yet the staff failed lo compare the Railway Receipt presented against the Invoice/ P.W. Rill. What is indicated is that the staff should be repeatedly re- minded of the need for watchfulness and that exemplary action should be taken when they fail, keeping, of course, all attendant circumstances in view. The Railways. are being suitably instructed on these lines."

7.45. The witness also stated that "out of the total 80 cases, staff responsibility lias not been fixed in 26 cases. Staff responsibility has been fixed in 37 cases. There are reasons for not fixing the staff responsibilty in 26 cases. Where the court cases are going on, we hold our hand in fixing responsibility lest that might &ect the legal proceedings. In I7 cases no staff has been held responsible and these 17 case include the 0 6 cases mentioned above. In 10 cases disciplinary action has been completed aid in 2 cases it has been partially completed."

7.46. In reply to a question, the witness informed the Coxnmittee thht there was a considerable time-lag between the commission of the fraud and the.cietection of the fraud. It was not unusual for a period of 6-8 months to elapse before it became known that a fraud had been com- mitted. Thereafter the question 01 fixing the responsibilhy started and that nonually took a minimum period of about a year.

7.47. The Committee note that there were 80 cases of fraudulent deli- verics be tween January, 1963 and June; 1965 ,involving compensation claims against the Railways to the tune of Rs. 5.18 lakhs. 74 of these cases could have been prevented had the staff concerned taken the prescribed precautions. The Committee agree that .

7.48. Another point that the Railway should bear in mind in dealing with these cases is the need to settle compensation claim of aggrieved partied as expeditiously as possible, so as to win the confidence 'of the customers.

Eastern Railway-Misappropriation of wagon registration fees

A udil Paragraph

7.49. In the course of local inspection of a station in July, 1966, serious irregularities were detected by Audit ,in the accountal of deposits and refunds of wagon registration fees. Further investigations conducted by the Administration revealed misappropriation of Rs. 1,08,220, spread over the period from January, 1964 to July, 1966. The modus operandi was (i) inclusion of money receipts in refund statements without corresponding cash deposits, (ii) showing the same money receipt numbers more than once in the refund statements, and (iii) over-casting daily totals of refund statements.

7.50. Though the misappropriation continued over a period of two and a-half years, it remained undetected in the central check of station returns conducted by the Accounts Department as also in the periodical local inspectiom-of the station conducted by inspectors of Accounts and Commercial Departments, e 751. The Administration stated (January, 1966) that no lacuna in the procedure of work in the Accounts. Department came to notice and rhat dixiplinar) action againbt the Accounts and the Station staff was iri progress. [Para 53-Audit Report (Railways), lf)68j. 7.52. 'I'hc Comnittee erqttiretl whether the staff reymnsible lor the Iwjwt~'atioriol Llautl tiad been purlishetl arid \\.hetllel. the respotisibilit\ Lor non-tletcctiorl 01 fraud owl. long period hat1 been hxetl. ?'he ifinistry in a note statctl as under:- fa L

7.53. Hc was licltl responsible for the C;omrnirsion 01 ;lie flnud and plated under suspension with effect from 29th .lttgust, Ic)C,fj anti charge sheetetl for a rnajor penalty. But DAR proceedings against him hat1 to be kept in abeyance iq terms 01 existing instructions 01 he hfinistry ok Home Affairs, as the SP/SPE, Patna had also Iauntlietl a court case for hi\ prosecution.

(ii) Stntlou Aln~tern77d 5 otlte~s 7.51. The) had worked at the Pekur Staliori during the niaterial period of fraud and were held ~esponsiblefor negligence in control and fnilure.of wpervision over the working of the Assistant Goocls Clerk. M'liile the Station hiaster and the Chief Gods Clerk are being prosecuted by the SPJSPE, Patna and 5 others Station hldsters hae been served with charge sheets. 7.55. There has been no further progress in the D4K enquiry against these staff as the rase against the main delinquent is still szrbd jtrdice. (b) Two clerks and the Travelling Inspector of the Accounts Depart- ment who were found resppnsible for non-detection of the fraud over the long period have been dealt with as under:- (i) Accounts Clerk Gr. 11. 7.56. Punishment notice for stoppage of increments for three years with cumulative effect has been served on him. (ii) Arco?rnts Clerlr Gr. I. 7.57. He was removed'from service and it was also decided to forfeit -50 per cent of S.C. to P.F. due to him. The employee, however, has taken the matter to Court, The proposed penalty could not be imposed on hint as the case is still svk jlrdice (in the Calcutta High Court). (iii) Jr. T91. A. 7.58. He was served ~4tha 'Show Cause Notice' proposin~the punisM nlent of reducing him from the post of Tr. T.I.A. to Clerk Gr. I for a period of three years but the employee has taken the matter to the Gourt of Sub-judge, Dhanbad. The propse'd punishnlent could not be imposed . a5 his case is still pending in the said coiwt. 7.59. The Committee note that wagon registration fees amounting to Rs. 1.08 lalihs were misapf;ropriated on one of the stations on the Easten] Railvy through manipulation of entries in the relevant dpcuments. It is surprisixfg that, though the misappropriation continued over a period of two and a half years, it remained undetwted in the course of various internal checks conducted by the Accounts and Commercial Departments. The Committee ohserve that appropriate action has been initiated against those found delinquent and negligent. They would like to be apprised of the outcome of these proceedings. a Advance from Contingency Fund and ~up~~ementaryGrants . Audit Pal-agtaph

7.60. On 3lst hlarch, 1967, the hlinistry ot Railways sanctioned an advance of Rs. 50 lakhs from the Contingency Fund of India to cover expenditure under "Grant No. !I-Revenue-hlixellaneous Expenses" on account of the write off of the cost of imported steel lost in a vessel which was abandoned in mid ocean on 15th December, 1962. The Contingency Fund of India Rules, 1952, as amended from time to time envisage that advances from the Fund shall be made for the purpose of meeting untore- seen expenditure including expenditure on a new service not contemplated in the Budget. The nature of the expenditure in this case, that is, loss due to sinkage of a vessel, was known to the Ministry before the Budget for 1966-67 was framed by them. A pxoposal for the write off ot the loss amounting to Rs. 54.60 lakhs was before the Ministry as early as June, 1965, but no provision was made in the Budget. [Paragraph No. 6, Audit Report (Railways) , 1968.1

7.61. The Committee desired to be informed of the reasons for not making suitable provision for the expenditure in the original Budget for 1966-67 or at least in the Supplementary Demands for Grants which were voted by Parliament a few days before the advance was sanctioned.

7.62. In a note, the Ministry of Railways stated as follows:- "The decision to sanction the write off the loss was taken on 6th March, 1967 and the same was communicated to the Railways con~ernedon 22nd March, 1967 and consequently could not be anticipated earlier and provided in the original budget for 1966-67 framed in February. 1966 or the Revised estimates framed in February 1967 on the basis of which the supplementary demands had been presented." 7.63. It was pointed out to the >finistry that the excessive Supplemen- tary Grant obtained in March, 1966 under the same grant, that is, 'Grant NO. 9-Revenue Miscellaneous expenses' and. the recurring ,£eatwe ot large savings under this grant was commented upon in Para lO(a) of the Audit Report, Railways, 1967. The Committee, therefore, enquired whether the Ministry kept in view their past experience whiTe obtaining Supplementary Grant and advance from the Contigenry Fund during 1966-67. The Ministry have, in a note stated: "Past performance cannot be taken as a guide for fixing the Sup plernentary Demand especially under this Grant i.e., Grant 9, ai it is an, omnibus grant which obeys no general trend as it covers a large variety of miscellaneous working expenses like expenses of the Catering Department, compensation for death and personal Injury in Railway accidents, payments on account of municipal taxes, and water charges, including arrears, etc., as well as 'Revenue suspenge' which holds items of expenditure not susceptible of adjustment against final/service heads for want of vouchers, acceptance, particulars, etc. The Supple- mentary Grant was for specific purposes, like additional payments due to enhancement in the rates of dearness allowance, effect of the higher level of expenditure on a variety of items such as municipal taxes, law charges, civil defence measures and rise in the prices of raw materials for the Catering Dep- artment. The additional provision was utilized by and large for the various purposes envisaged in the Supplementary Grant. The saving was chiefly because debits for freight in- surance and incidental charges etc., on stores did not come from other Departments to the extent expected (55 lakhs) while debits adjusted in respect of the Emergency Force and Civil Defence measures etc., also fell short of expectations (54 lakhs). The latter item includes a saving due to non-utilisation of the provision retained in the final allotment in expectation of the reversal of debit for security patrolling; this debit was not reversed by the Civil authorities (A.G. Assam) during the year, contrary to expectations. Savings of wmparatively small magnitude also occurred due to fluctuations in adjustment of normal (B lakhs) and special (I3 -1akhs) contributions to Provident Fund and transactions accommodated/adjusted under 'Suspense' 15 lakhs)." e "It is also submitted thacthe saving. under- 'a gra'nt sh6uld equitably be viewed against the total final grant rather than the amount of the Supplementary Grant alone because the expenditure for the year is recorded vis-a-vis the total grant. The saving under actual expenditure was 5.7 per cent. of the total grant."

7.64. The Committee feel that it was unnecessary to have resorted to an advance from the Contingency Fund in this case. as the expenditure was &early foreseen. The advance related to the write-off 'of an item of expenditure incurred as early as December, 1962 and the proposal for writewff was uncer the consideration of Ministry of Railways since June, 1965. Had that proposal been speedily processed 'it would have turned out to be unnecessary to have taken an advance on the last day of the financial year. The Committee desire that action should be taken to ensure that the Contingency Fund is not unnecessprily drawn upon by holding over proposals for expenditure received well before the close of the financial year.

hi. R. MASANI April 3, 1969 Chairman, Chaitra IS, 1891 (Sakn) Public Accounts Committee.

and upset the Railway's calculations regarding an increase in.@s earnings. Railways In their 22nd Report (Fourth Lok Sabha), the Comnlittee have already drawn attention to the heavy overcapitalisation. that took place in the Railways during the period of the 'Third Plan leading to the creation of traffic capacity far in excess of actoal* requirements. In the Committee's opinion, the deficits now developing ill he Railways have to be considered as a legacy of the faulty polic-ies eruh)cliecl and followed during the Third Plan, whic-h resulted in an increase in dividend liahi- lily of the Railways to the General Revenues from Rs. 55 crores in 1960- 61 to Rs. 115 crores (excluding the pawnger fare tax) in 1966-67. Do. In the context of the deficits NOW developing. it will be necessary for the Railways to take seriou5 steps to put their house in orclcr. The. Committee would in this connection like to conlmend the following E broad lines of approach: (i) The Railways should show extreme circumspection in embark- ing on new capital expenfliture. Work like the donbling of lines and expansion and re~tiodellin~of yards. etc. fall in this category. Later in this report. the Committee have given some instances of sut-h works completed at sj~hrtantialcosts not having brought the recults expected of it. (ii) A concerted effort should be made to secure more efficient use of the rolling stock and other capital assets on the Railways. The indices of track, wagon and Iocomotive utilisation given at page I3 of this report 'show that there is scope for improve- ._.______.-.- . .. . ,. ~- . _ ..____i_.-_ - _ - -

I 3 3 4

in the past in a different context. Cost control cannot be secured by assessing performance in terms of expenditure incurred. It will require evaluation of output and, for this purpose, norms will have to be fixed for virious operating indices. This will necessarily require far-reaching changes in accounting and budgeting techniques at the operating levels in the Zones. Thi ~omrnitteerecognise that the Rail- ways have a variety of assets and operations on which expenditure is incurred and that therefore the introduction of a system of performance budgeting bristles with difficulties. However, a start has been made in this respect and the Com- mittee would like it to be considered how best the pace could 5 be accelerated. The Committee are surprised that despite the erratic growth of goods traffic since 1961-62, the Railways should have budgeted for an increase in goods traffic of 11 million tonnes during 1966-67. The actual increase in traflic that materialised was only 2.2 million tonnes or one-fifth of the increase in traffic expected. The shortfall was mainly on account of coal, cement, general goods and steel plants traffic. The

Committee have in paras 1.1 1, 1.19 and 1.24 of their forty ' Ninth Report (Fourth Lok Sabha) already drawn attekon to the need to ensure that estimates of traffic in respect of these sommodities are drawn up on a walistic basis, in the light of empirical &ta, whch add 4 be subjected to periodical review on the basis of known dnd ilnti5+4ted demand and production data for various commodities. he Cornitti9 hope that this will be done and that, in the process of zssessment of traffic, the significant progress made in road communications and their impact on the Railways' share of goods traffic wjll be kept prominently in view. Do. The Committee note that the Railways are sustaining an estimated loss of Rs. 25 crores every year on account of ticke~lesstravel. While this shocking evil can be eradicated only with the growth of civic consciousness among the travelling public, the Committee would like the Railways to consider in what ways the intensification of checks and the assertion of order and discipline can help to minimne the losses on this account. Do. The Committee are exercise about the mountinq fuel bill of the ii Railways which increased by over a third from Rs. 92.07 crores in 1961- ' 65 to Rs. 127-82 crores in 1967-68. One major item of fuel was coal and the coal bill increased from Rs. 85.22~rpresin 1964-65 to Rs. 97.46 crores in 1967-68. The cost increased partly due to the increase in the pticc of coal, but there was also an increase in consumption, which occurred despite a reduction in the steam locomotive fleet. It has-been stated by the Railway Board that increased use. of lower grades of coal coupled with a drop in load and speed of trains hauled by steam locomotives were responsible for the extra coal consumption. Howwer, an ahahid of the problem by a Study Gr6up of the Railway Board showed that there was substantial scope for economies. The following points high- -- -.-- - .--. ' - t 2 3 4 --- -* - lighted in the Study Group's Report dewme, in the Committee's opinion, detailed follow-up action:

(i) ' The drop in productive utilisation of loco hours made available to traffic" in some Railways. (ii) "The disproportionately large" increase in passenger lon motives in some of the- Railways.

(iii) The "slow" pace of reduction of steam locomotives, in some of the Railways, with the reduction in goods uamc hauled Ly steam traction. .-.+ , (iv) "The disproportionate increase in coal consumption on ' f shunting engines."

Apart from the scope for economies, no less important, in the 7. 1.66 Railways Committee's view, is the need to check losses on account .of theft by intensifying vigilance on the part of the Railway Protection Force. There is an equally vital need to keep a check on the consump 8. 1 67 Do. tion of diesel oil and P.O.L. With the increasing pace of dieselisatiou, these items will account for a progressively increasing proportion of the Railways' fuel bill. The Committee observe that the total fuel bill of the Railways mounts on an average to a fifth of their working expenses. There is, therefore, imperative need for the Railway Board to keep this itepl under continuous high-level review. The Financial Advisers attached to the various Zonal Railways should also keep tab on the position in this regard. In view of the deficits in the workinq results of the Railways* there is need to enforce economies in other spheres also. A study by the Efficiency Bureau indicated that operational economies could be achieved through the closure of certain hlnck crossing stations and the introduction of 'one engine only' system in sections where traffic is light.' The Com- mittee note that some of the recommendations made by the Efficiency Bureau in this respect have been implemented and others are under cod- deration. The Committee would Iike early action to be taken in this regard The Railway Board and the Zonal Railways should alw assess C1 the scope for economy in expenditure on staff, on the basis of studier of special organisations in Railways conducted by the Efficiency Bureau and the special review at present stated to be under wav bv the Financial Advisers of Zonal Railways.

The comparative evaluation at p&e 50 of their Report would indicate that the staff pition in some of the Railways like the CentraI and South Eastern Railway would bear closer scrutiny. In fact, the Rail- wiy Board should carry out periodical reviews of the working of the various Railn-ays, not only from the point of view of staff but from the point of view of oterall financial results so that timely action could be taken to arrest any deterioration in performance. ------f 2 3 4 Z2. 2-6 Railways While the Committee note that the accumulation of scrap is beiy progressively contiolled, they cannot help observing that there has been a steady increase in the balances of scrap both absolutely and in terms of the total stores balances. The target set by the Railways in 1963-64 was to bring down the 'holdings' of ferrous scrap, which constitutes the bulk of the scrap accumulations, to six months' 'arisings' but the balance at the end of 196748 amounted to nine months' arisings. Such as accumulation causes-congestion in the yarJ and also blocks substantial income which the Railways could get by its disposal. The Railways should take rteps to accelerate the disposal of scrap, after making full utili9tion for Railway purposes. w The Committee observe that, due to a failure on the part of the Do. . Railways to utilise adequately stocks of ferrous scrap available with them - in the fabrication of cast iron sleepers, an avoidable expenditure 01 over Rs. 10 lakhs was sustained by them on contracts for these sleepers place in 1964-65 and 1965-66. The loss would be even higher if the stocks with the engineering subordinates which were not surveyed and classified are taken into account. The Railway Board had themselves been obtaining since April, 1963, quarterly statements of ferrous scrap available with various Railways. These very clearly indicated that, due to increasing tempo of track renewals, there were substantial 'arisings' of map eveq quarter, which were progressively augmenting the balaxes. The increas ing accumulation occurred despite the consumption of scrap in the Rail- way Workshops, which, during the period 1961-62 to 1x5-66, ranged tram 21,270 tonnes to 45.769 tonnee. The position in regard to the amdli- uon of stocks in fact became so acute that the Railway bard directed thr Railways to bring down their stocks from 14 months' 'arising' to 6 months' 'arisings'. It is, therefore, paradoxical that, in the face of this steady aali progressive accumulation of scrap, the Railway Board should have felt obliged, while assessing the quantities of scrap available for issue to the contractors, to discount the quantities shown as available in the stock returns, to provide for consumption in the Railway Workshops, or to assume that prospective 'arisings' in the course of the year will take place only during the latter part of the year and need not be taken into account. It is also strange that no note was taken by them of the fact that balances with engineering subordinates (which are, in fact, still to be ascertained) had not been reported by the Railways and that, with expeditious survey and classification, part of these balances could have been utilised for fabrication of the sleepers. As the Financial Commissioner (Railways) himself admitted during evidence there was "not enough coordination" between the Railways and the Railway Board in assessing the availability of scrap and utilising "the maximum amount which could be utilised." The Committee would like the Railway so&-dto investigate how this occurred and fix overall responsibility and also to ensure that in future the actw mulated balances of scrap, including the balances with engineering subordinates, which will have to be expeditiously surveyed and segregated, are put to gainful use. The Committee note that certain rails laid by the South Eastern Railway on the main lines which .in the opinion of the Railways "ww

(&. 70.20 lakhs) to that of loss in 1966-67 (Rs.34.73 lakhs) and 1967-68 (Rs. 56.19 lakhs) . Do. The Committee note the vieiv expressed duzng midence that there are me"inhe1-ent defects" in the prwnr of mpufaccurr of drrp en. The Committee cannot, huwever, avoid the conclusion that perhaps the Railwaw alfo cannot escape from wnle part of the reponsibility for this vate c)f affairs since they had accepted th; process of simultaneous preccirl~2nd pttnl.hin~which gave r ire to these "defects". The Railways

have on this accnurlt :rskd for rt ( tr:rnge in the tlesi~nof the sleepers, hut this would retlui~-e3 complete change in the poces4ng operations and thc Inyout, erlrrtili~lg\iibrtantial capit;tl ir:vestrl~ent. The Con~rnitteeare un;tblt. ro understantl ~.hythe ;xoc.ess of operation adopted by the Plant has p:(xlu( c'd such unsatisfwtory resulr, when it has been worked succes* full!- ir~other t-nuntrieli. Thiq sugzestr rhnt either the presser plant and 8 the dies ale defec-tiw 01. that thev are not being prnperly maintained or operatecl. The rjtatrcr nt.etls c !o~qil~r.e,ripa tion bv Covrrnment.

17. 2.69 Do. tions of the development on the demand for sleepers of the type produced by the Durgapur Plant and the economic working of the Plant Railways The Gommittee cannot help feeling that the Railways incurred an avoidable expenditure of Rs. 10.6 labs in this case by failing to restrict their orders for imported fish-plates to their immediate regulremenm The fishplates were procured for rheeting urgent requirements in con- hection with track renewals, but an assessment was not made before plac ing the orders as to whether the supplies of rails were likely to materialise in time. The representative of the Railwav Board himself admitted in this respect during evidence that the fish plates were procured "irrespective of whether the rails could be used immediately or a little later." Apart from this, the Railways also failed to assess the extent to which their re quirements of fish plates were likely to be met from indigenous rourm. Arrangements had in fact been made before the orders for imported fish plates were placed for 22.000 tonnes of billets being impoft& for augmenting indigenous production of fish plates. However, the Railwayi failed to ascertain the programme drawn up by the Iron and Steel Con- troller for the utilisation of these billets and to restrict their purchases of imported fish plates correspondingly. The over-all result of th&e omie sion was that, of 12,500 tonnes of fish plates imported as_an urgent require ment in June, 1963, over a sixth (2.556 tonnes) remained unutilird till tfrc end of 1964-65, due either to rails not becoming available or to iridia genous supply being higher than anticipated. Had orders for tbis gu?n- tity not been placed in November. 1962, the Railways could have averted an extra expenditure of Rs. 10.6 hkhs apart from uvin valuabld foreign exchange. 6 Do. The Committee trust that in the light of the ~xperiencepin& in this case, steps will be taken by the Railway Board to ensure that such

costly errors in estimation do not recur. 0 Do. The Committee are surprised to learn that an order placed by the Railways in October 1961, for Meter-Gauge bogie petrol tank wagom costing Rs. 26 lakhs was not cancelled in spite of clear indications that became available subsequently that these wagons would turn out to rurplus. It is all the more surprising that this should have happened, when the supplier himself repeatedly made representations to the Rail- ways for the cancellation of the order. The representatives of the Rail- way Board stated before the Committee that the main revon which 5 weighed with them in not cancelling the order was that the cancellation would have entailed infructuous extra expenditure of Rs. 1.2 lakhs. They ' also argued that, though the Railways "could have done with fewer tank wagons", the procurement of these LOO wagons helped to make transpor tation "easy". It passes the ~omrniitee's comprehension how, for the sake of avoiding an expenditure of Rs. 1.2 lakhs, the Railways accepted an avoidable capital investment of Rs. 26 lakhs, thereby ~ommitingthem- selves to a recurring annual liability of Rs. 1.56 lakhs by way of dividend payable to the General revenues. As.regards the view that these wagon, helped to ease movements, the Committee see little justification in the Railways building kp a large cushion of wagons to meet unforeseen fluctuations in traffic when the same pL?fPOse could well be served by better - -- ~ ------. - . --- . -- utilisation of w3gons. The operational statistics given in the 'Review of Performan(-e of 1ndi;in Government Railwnu' (February. 1969) would indicate that wagon kilometres per. u s~wn(la\ In\ e ;,l-og~essivelygone down from tiO.1 in 1965-66 to 57-6 in 1967-6s in rrtcrle g;rupe sections. This signifies more detention of wagnnr in ~iiarshallingval-tls and at terminal points, ~shirhthe Railways should be able to reduce with concerted effort. The Committee have zlrmrlv drawn attention to this aspect of wagon utilisation as also the exi5ience of srlrplr~swagon capacity in the Raihvays in Paras 1.35 and 1.36 of their 49th Report (4th Lok Sabhaj. The Committee hope that, in the light of I hose ob~ervntions.earnest efforts will be made by the R~ilwnvsanti the Plmning Commission to assess the existing wagon capacity and the scope for improved utilisltion of existing wagon stock, so that precious and scarce resources are not unnecessarily deployed in the purchase of wagons during the Fourth Plan period. Railways The Committee also understand that the Adm~nptrative Re- forms commission is comprehensively studying the working of the Rail- ways. The Committee have no doubt that this aspect of the operation of the Railways will in the course of the study receive the importance it deserves and that the results of this study ill become available to the Railways and the Planning Conlmission in time to facilitate the for- mulation of a correct wagon provisioning policy for ?he Fourth Plan. zI. t-Iy Railways The Committee are distressed to note that 12,:'15 tonne9 out of Deptt. of Supply about 13,000 tonnes of steel sheetslplates supplied by an overseas finn to the Railways did not contain copper according to conuact specifiutinu Besides, some of the sheets turned out to be thicker than rtipulated in the wntracts. The inspection ot these sheets/plates was conducLed by the India Supply Mission, London, but they failed to detect that some of the sheets did not conform to contract specifications in the matter of thicknesr As regards the chemical properties of the sheets, thy relied largely on tht Mills' own certificates, but these turned out, on subsequent investigations, to be "forged". In fact, these investigations disclosed that the firm,with whom the contracts were placed did not ask the Mills to produce copper- bearing sheets at all, awept for a negligible quantity of 40 ionnes and that in "collusion" with some of the Mills employees "falsified" the certificates Adequate facilities were also apparently not given to the Inspect- ing Sta of the India Supply hfission to carry out the inspection.

~n para 34 of their Thirty-Second Report (Third Lok Sabha), the' 5 Committee had commented on the failure of the India Supply Mission to . detect the absence of copper in certain consignments of steel sheets supplied to the Railways. It is regrettable that an identical lapse should have recurred and that, in the rout% of inspection, the India Supply Mission even failed to detect dimentional deficiencies in the sheets. Thc Committee would like Government to fix responsibility for the lapses that occurred on the part of the Inym tion Staff.

23. 2.1a6 DO. Another aspect of the case calling for tomment is the fact tha even after the deficiencies in the lots supplied to the Integral Coach Fac- tory came to the notice of the Railwa)~,six more contracts were placed.

7 -.- I_- I 2 3 4 -- - with the same firm. The Committee would like Government to investigate how this happened and fix responsibility.

. Railways The Committee note that the question of compensation to be ... 2-127 ..a- -. Del tt. of Sup~ly paid for the deficient sheets is still in dispute. They would like to be apprised of the progress made in realising compensation from the firm to the extent it is not covererd by securities held or encashed. 24- 2' 1z8 Railways From the information furnished by the Railway Board, the Com- mittee observe that during the last three years a sum of f 73,526 was paid as remuneration to forei~nRailways and other agencies for inspection of Railway stores for which orders were placed with the overseas suppliers. The Indian High Commission in London has a Railway Adviser and the India Supply Mission, London have their own complement of inspect~ng staff. The Committee would like Government to examine whether it is not possible for these two aaencies to conduct inmertion in such cases also, so that the expenditure incurred on the pavment of remuneration to foreign Railways and outside agencies could be saved. Do. The Committee rmet to note that out of 8.190 axle boxes pro cured bv the North ~asiernRailwav for use in wagons, as many as 228: axle boxes valued at Rs. 1.78 lakhs have turned out tA be surplus, and that the Railways are likelv to sustain a loss of Rs. 1.74 lakhs due to the ptbposal to scrap these surplus axle boxes. The Commiiree further note that the excns procurpent 6qumd due to the failuv of th( R$w% to take into account the fact that the wapons for which these boxa were needed were being condemned in large number. The Giommittee would like the Railways to investigate the circumstances in which this failure occurred. .

Do. The Committee also observe that as many a's 98 axle boxa out of 4'34 procured for the old type EMU. coaches in the Central Railway have been rendered surplcs and will have to be scrapped. The Com- mitteq would like the Railways to investigate the circumstances in which these boxes came to be purchased in excessive numbers. Do. The Committee note that cables made of aluminium worth Rs. 4.81 lakhs were procured by the Northern and Southern Railwavs for use in signalling circuits though the policy of the Railwav Administration 8 was to use only copper cables in these circuits. Consequentlv these cables - could not be utilised for signalling work and-had to be diverted for use . in other circuits. The Committee note from the information furnished by the Railway Board that a complete picture of the utilisation of these cables is not yet available. Besides, is much as 3.44 lakh metres of cables out of 8.65 lakhs procured by these two Railwavs, remain unused. The Committee would like the Railways to examine whether these cables could be put to use. If there is no prospect of the cables beink utilised in the near future, expeditious arrangements.should be made for their disposal.

The Committee also note that though the D.G.S. & D. was asked 2 I* Railway - to procure copper cables, orders were placed by his organisation in one of -. Deptt. of Supp:,, >...I+, , ,. .. ,I I . .1 . - ---- , .,.. . . .,.,*. , :... - .,: - . -... ># 7 .. -- -- .-~

t 2 3 4 . _ . ._-- .. '. -- - these cases for aluminium cables ~vithoutprior clearance trom the Rail- ways. It is regrettable that this should have happened particularly whe11 the organisation was awal-e that the Direct01 (;enel-al. Tet llnical Deveiop- ment, had not banned the manuf;ictul-e of that type of cable with copper conductors. It is also stranat, that though a complaint was rnade by the Northern Railway in this iqrr*i to tile D.(;.S !k D. in Sfard~.1Ybh no conclusive action was taken bv t!le latter. rxcevt for calling for copies 01 dbcurhents after a lapse of 18 months. The Committee would like Gov- ernment to insestigate the circurnst;!~:ces in which the D.C.S. & D. made an unauthorised deviation from the ititlent specifications while procuring the cables and fix responsibility on the prty found at fault.

N€3 Railways 'The Committee regret to observe that it took he Railway Adml- nistration over four years to erect a steel oil storage tank after it was received at the site of work. A substantial qr~antityof oil which was. in the meanwhile, stored in concrete tanks was lo~tdue to seepage, the loss on this account. including other sundrv Imses. amountinn to Rs. 58,000. The Committee note that the cielar in erecting the tank was caused by the time taken to obtain the approval of the Explosives Departnient for the aection plans and that the question of fixing resptnsihility for the delay ia under consideration. -

m The Committee deprecate the inordinately long ,time taken in settling preliminaries and formalities before taking in hand the work of

------I 2 3 4 - .. ------_------dk facts are available to give any catcgoricat opinion whether the Rail~~ Administration had a strong case to claim damages fer defective work". and that, in any case "it may not now be possible" to initiate action. Tbc Committee would like the Railway Board to investigate drv tbc case 6ar claiming general damages waq not apeedity prwd.

Railways The Committee note tbat the .construction of these bridges io- vOEved the uy of a new technology with which the RaiLway engineers supervising the work were not fully familiar. As a matter of precauh. the Railways should have considered whether the 'maintenance period' for the work, during which the contractor would be liable for defects. should have been longer than the normal period of six months. 'The omission in this respect enabled the contractor to escape liability for ddective work. The Commtsee hope that Ckwernment wiU pdt by this experience and issue instruction^ to ensure that mairatenmce purid for works invohing new technology arc fixed in such a way as to slfc guwck artequately E;overnme~it's interests. . Do. Tho Committee note that the extra expenditure recoverable by the Railways from the Lontractor in this case (whth is still to be exactly assessed) has become the subject-matter of a stiit filed in court. They wpuld, therefore, like to reserve their comments at this stage pending the outcome of the suit. One aspect of the case, bowever,ralls for commeW Certain bods of the value of Rs. 1-03 lakhs furnished by the conulcW a PuauLee £or his performpnce under the contract wercallqwqd to law. Do. The Committee would like the disciplinary proceedings start& against thtrdefadtirrg. officials in this mction to be expedittously hnalised.'

The Committee note that there was a "regrettable. omiasWf on the part of the RaiIways to serve notice of termination 0n.a contracm before letting out the portions of work left inrqmplete by Iiii to ainm contractor. The award of the work to the new contractor i~liwas<& Japed due to this omission and the "clerical delays" that cmurfed. In tk result, the Railways had not only to forfeit their claim for.a9sum of Rs. 42,978, being the extra expenditure incurred on getting tlfe unfiniahd work completed by the new contractor, but were also obliged to pay tk contractor a sum of Rs. 31,975. Do. The Committee would like the Railways to investigate the circumstances in which thew various lapses occurred and take approprraie action. 3 Do. The Committee cannot heIp feeling that the work on augmenttng the facilities in Tatanagar and Adityapur has not been processed-in a very busksslike manner. The work, %*as undertaken, OR coxaiderations of ulrgency. without any survey. to &el with increased traMc expected out d tba apanaion of the Iran an8,Sel industry 101a.ted.ar~JareskhdpuE. H&wev~r~thoue;b.the.expansioe,of thai industry go& under way in 1964- 66;. thewok. on. the rmoddlirq o£.the yards is still. in mess alter ten years Dm to *the-factthat a survey was not. conducted, the cost.of the work uedrwmt revision after swveys from Rs. 222 creres &o-Rsy.3B4 crons. ------I 2 3 4 ------.--_I.... ._ 4 12 Railways The Committee note that the scojx of the work on thew yard\ as contemplated in the latest estimate for the work, provides for the 'I.& nagar yard handling about 3,135 wagom as against which the actual trlfhc that has materialised so far has been of the order of l,lW to 1;2W wagons. As the expansion plans of the industry in this area, to which thrs xhenlr was nla~nlygeared, were rot~~pletedas far back as 19b4-65. it call, 101 examination whether die scope of ,dye work ~tcdspruning.

-_. ------____. - --- .-- 41 97 4. Railways The Committee cannot help feeling that the expenditure of RI. 3.22 lakhs incurred by the Railways on the provision of these convertors was avoidable. Two out of four convertors have been closed down dnd the total prodr~ctionfrom the other two convertors amounal to 96 tonlws against their capacity of 1,360 tonnes. The Ministry of Railways have stated that the need for intensive utilisation of these convertors 'no longer exists" in view of the considerable ekpansion in the capacity ot steel foundries in the country during the Third Plan. These convertors were also set up during the same period and it is not clear why, before embark- ing on the project, the Ministry of Railways failed to take note of Gov- ernment's plans to lirence additional capacity in the existing foundry units U ant1 also to set up new units, some of which fell within the Railways' own' i; jurisdiction.

Do. The Committee feel constrained to observe that all the four cranes were purchased by the Railways in this case without drawing. - up a proper progranme for their installation and the execution of works roc. nerted therewith. The crane purchased for the Gorakhpur Stores Depot in 1958 was moved from place to place from 1958 to 1962, without being put to any u5e. In 1963, the site for its installa?ion was chosen, and it took over four years thereafter for all the attendant work to be completed.

Do. Two other mobile cranes purchased for Garhara yard in October, 1964 worked "to half their capacity from a stationary psition" because of "the condition of the ground from which they operated." A third crane purchased for this yard in April, 1967 as part of scheme for ntecha- nisation of handling facilities in the yard has not been u& as the traffic offering could be handled by the two mobile cranes and one Ckdiath crane already provided. . Do. The Conmittee do not feel happy that pfter expending over Rs. 5 laklls on the purchase of these cranes, little attention was given to the question how effectively and quickly they could be put to use. The Committee trust that suitable action will be taken by the Railways to ensure that expensive items of machinery are purchased by the Railways only after proper assessment of requirements and that they are put 10 effective use without delay.

Do. The Comnlittee arc not very happy about the state of affairs. h, in regard to the commisrioning and utilisation of weighbridges. Out of 23 weigllhritlges which were reported to he idle, 11 have since been

Do. The Committee observe that an experimental scheme for maintenance of cost data on locomotives in the various Railwhys introduced between December, 1956 and February, 1957 was not "progressed with appropriate expedition" from 1960 onwards, when the fiC on the subject was "lost." The scheme continued till 1966, when it was given dp after

the performance of different. workshops and stimulate healthy competition amonmt them. (iii) Based on the standardisation of the various operations, some suitable form of batch costing should be evolved. For this purpose, the experience of -undertakings like the Chittaranjan Locomotive Works could with advantage be drawn upon. (iv) There has been a progressive reduction in the number of steam locomotives in use since 1%6, due 'to increasing dieselisation and electrification. It would, therefore, be necessary for the Railways to assess to what extent idle capacity has been mated 5 in the steam loco sheds and such capacity could he usefully * diverted for maintenancelrepain of diesellelectric lacorno. tives, so that duplication of facilities could be avoided.

Railways The Committee note that a test check of wagons carrying timber hooked from October, 1966 to January, 1967, at four stations in the Cen- tral Railway, which lack weighbridge facilities, disclosed loading of wagons beyond the minimum chargeable weights and a consequent loss of revenue of Rs. 8.179. As the annual revenue from the timber tramc originating at these four stations is of the order of Rs. 10 lakhs, it is pro- bable that the loss over a period of one year will be fairly substantial. The losses might also continue to recur. The Committee note that at three out of these four stations the Railway Board do not copsider the

------49- 6'6 Railways The Committee are surprised to learn that to prevent thefts of Loco fittings which amounted to Rs. 7,400, one of the Divisions in tht Central Railway initiated a scheme fbr detailing loco stati" on'duty dudng the 'homing' of locomotives at a rost of Rs. 46,000. It is regretnble tht, before introducing the scheme, the Djvision failed to obtaitl the sandon of the competent authority or even to consider in consultatian eith the . Chief Security Offirer whether the existing security arrangements' could be improved. The Committee note that the ~chemehas since been g)vm up. The Committee desire that action sholild be taken to enmm that caws of-tliis. type do not recur. . i

Do. The Committee note that the Southern Railway cwried. oa its roils-5Y postt of perterr in excess of reqwirtments. 49 oft thmm~sanctioacd pri0tSto 1%1 and the rest in 1953. The posts wwe-s~rrmlarerl~sorw time in 196'7: This suggests tha-t-a periodical review of thr ~crengtlrd the establishment was not carried out by the Railways as provided for in the standing procedure. The Committee also note that the Railway Board themdves feel that, due to the change in groltnd condit;on's that have amred over the years, the yardsticks in vogue for the provisiol~of various utegpries of staff on the vario~lsRailway. need review. The Railmvs eq&y a substantial establishment and their rage bill is annually of tiit or&r of Rs. 330 to 350 crora. The need to effect eron~rniesin thia @Ad. tkrefore needs no emphasis, particularly rs the Railways haw now rUfi into a deficit. The Committee hope that the Efficiency Bureau of the Railways wilt undertake a systematic study of the mrjor -cs.d statl and evolve realistic norms for those categories aalrfng -into accarrrlt the local conditions obtaining in the individual Railways. Do. The Committee are concenned over the increasing iucidenn d the4s on the Railways. With the growiag nmkrof tbeb, the Rahap have also bean facing claims from parties on an inneasing wale. Some idea of the magnitude of the problem can be had from the fact that claiqo paid on account of "losses", theft and pilferage increased from Rs. 3;84 crores in 1965-66 to Rs. 5.87 cram in 1967-681 Thew atcounted for over three-fifths of the net claims paid during these years 1-iEe fadrat daring this period the expenditure on the Railway Promtion F- increased from Rs. 9.63 crores to Rs. 11.9'1 crores raises a question. whotbu tire Ihailwayg hpe been able to obtain results commenu~rcrtewith1 the heariy expenditure on this Force. The Commit*ee wouM like the Railway. Bpard. to examine how best the Railway Protection For- could b mdE ehctive to minimise the growing incidence of thefts.

7'21 - . Do. Incidentally, the Commiuee rlote that the RaiGwayr took 33.1 dap to set& claims in 1967-68 as aiainst 31.7 day8 ie 1965-66 ad 34.3 days in 1966:67. The Committee would like steps. to be taken to enurce. that the Commercial Department settles claims in an .expeditious and bvsimsslike manner,

Do. The Committee had in their 32nd Report (Third Lok Sabha) recommended that' losses on account of thefts of fittings should be separately exhibited in the Appropriatipn Accounts. The Committee observe -. ------~--- that this is not being done by some of the RaiIways. The Committee desire that their recommendations shoi~ldbe implementccl quickly.

The Committee feel that the

The Committee note that recovery of an "exces* payment" of Do. municipal taxes amounting to Rs. 1.81 lakhs is pending and that the Railways have filed a suit in court for effecting recovery. The Committee would like to be apprised of the outcome of the suit.

The Committee note that there were 80 cases of -fraudulent deli- Do. veries between January, 1969 and June, 1965 involving comphation claims against the Railways to the tune of Rs. 5.18 Iqkhs. 74 of these cases could have been prevented had the staff concerned taken the prescribed precautions. The Committee agree that exemplary action needs to be taken to prevent such instances of negligence or connivance on the part of the railwaymen. They trust that in all, those cases where responsibility is yet to be fixed, action will be expeditiously taken.

Do. Another point that the Railway should bear in mind in dealing with these cases is the need to settle compensation claims hf aggrieved parties as expeditiously as possible. So as to wi,p the confidence of the customers.

Do. The Committee note that wagon registration fees amounting to Rs. 1.08 lakhs were misappropriated on one of the stations on the East* Railway through manipulation of entries in'the relevant documents. It is surprising that though the misappropriation continued over a perid of two and a half years, it remained undetected in the course of various internal checks conducted by the Accounts and Commercial Departmenu. The Committee observe that appropriate action has been initiated against those found delinquent and negligent. They would like to be apprised of the outcome of these proceedings.

56 7 -64 Do. The Committee feel that it was unnecessary to have tesorted to an advance from ;he Contingency Fund in this case, as the expenditme was clearly foreseen. The advance related to the write-off of an item of --. expenditure incurred as early as December, 1962 and the proposal for write-off was under the consideration of hiinistry of Railways since June, 1965. Had that proposal been speedily processed it would hare turned out to be unnecessary to have taken an advance on the last day of the financial year. The Committee desire that action should be taken to ensure that the Contingency Fund is not unnecessarily drawn upon by holding over proposals for expenditure received well before tt1t?.flofesof * , ..ri the financial year. V f