CAG REPORTS. Railways must take steps to control overloading to boost revenues

The Comptroller & Auditor General has asked the Railways to take steps to control overloading of cargo, to reduce loss of potential revenue.

The Government auditor observed that out of 1,176 loading points in the Railways, 759 did not have their own weighbridges. They were largely (65 per cent) dependent on privately-owned weighbridges, especially for bulk consignments such as coal and iron-ore, the CAG report said.

The performance of weighbridges was not being checked regularly by the Railway administration, it observed adding that this has increased risk of revenue loss in carrying freight of bulk consignments. Audit also noticed deficiencies in their proper up-keep and maintenance, CAG said in its report.

In another chapter, the CAG said by managing scrap sale better, the Railways can increase revenues and pay lower dividend to the Centre. This, would improve the Railways’ profitability, the CAG said.

In 2013-14, the Railways earned ₹3,004 crore by selling scrap, accounting for about 2 per cent of Railways’ total revenue of ₹1,39,500 crore.

“An asset created from the capital support from the Centre carries a dividend payable by the Railways to the Centre. The rate of such a dividend was six per cent, five per cent and four per cent during the years 2010-11, 2011-12 and 2012-13 respectively,” it said. When such an asset is disposed off after being declared as scrap, the original cost of the same is required to be written back to capital, so that the total capital at charge is reduced, thereby reducing the amount payable by railways as dividend to the Centre.

When Railways condemns rolling stock funded from capital, an estimate should be prepared writing down the original cost of such stock from capital. But, different railway zones delayed making relevant accounting adjustments — writing back the rolling stock scrapped — which resulted in “avoidable dividend payment of ₹7.8 crore”.

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