Home / Politics / Policy /  CAG raps railways for `29,000 crore loss

New Delhi: The railways suffered a loss of over 29,000 crore in five years on freight earnings because of the faulty manner in which it charged for the carriage of iron ore, the Comptroller and Auditor General of India (CAG) said in a report tabled in Parliament on Friday.

Between May 2008 and September 2013, the railways failed to check the diversion of iron ore meant for domestic consumption to exports. Iron ore used locally is charged at a concessional rate.

The national auditor reviewed the records connected with 83 major loading points across seven zones and 180 major unloading points between 22 May 2008 and 30 September 2013 to check for compliance on bookings and deliveries of iron ore at the domestic rate and assess the quantum of freight evasion and leviable penalty due to non-compliance. “The review of the subject has revealed critical gaps and a lack of enforcement of the institutional framework of the dual freight policy, monitoring and implementation of the same, and laxity of railways administration leading to freight evasion, non-levy of penalties for wilful non-compliance and under-charge of freight," the report said. The railways introduced the dual freight policy in 2008.

In another report tabled in Parliament, CAG said the railways required 41,000 crore to replace old assets to ensure the safe running of trains. In 2013-14, the railways spent 7,119.91 crore on replacement of assets against a backlog of 47,310.94 crore from the Depreciation Reserve Fund, the report said.

The auditor found that the railways had paid back over 12,000 crore to its financing arm, the Indian Railway Finance Corp. (IRFC), between 2011 and 2014 from the general budgetary support received from the government, which is a violation of its accounting practices. Borrowings from IRFC are supposed to be serviced from the capital fund provided for from the net surplus of the railways.

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