Railways operating ratio, direct indicator of working of the state run transporter, drop lowest in 18 years

NEW DELHI: Railways operating ratio, direct indicator of working of government run transporter, fell to lowest in 18 years for financial year 2016-17, says a CAG report emphasising that passenger fares needs to be revisited and subsidies, passes, special travel concession be scaled down.

The report also raises concern over incidents of rail fractures and noticed that 274 cases of rail fractures and 465 cases of weld failures were reported during 2015-16 and 2016-17 in the selected section of five Zonal Railways. During this period, seven accidents occurred due to rail fractures/ weld failures in these five Zonal Railways.

The national auditor found that the Operating Ratio during 2016-17 had deteriorated to the lowest level of 96.50 per cent since 2000-01 when it was 98.34 per cent. When actual expenditure on pension payments is taken into account, the Operating Ratio works out to be 99.54 per cent.

“Since, Operating Ratio is a direct indicator of the working of Railways; the Ministry of Railways should also look into the various innovative ways for revenue generation and closely monitor the expenditure,” recommended the CAG.

Directing the Ministry of Railways to revisit the passenger and other coaching tariffs so as to recover the cost of operations in a phased manner and reduce its losses in its core activities, the auditor said that the fixation of passenger fare and freight charges should be based on the cost involved so that it brings both rationality and flexibility in pricing considering the financial health of Railways and the current market scenario.

“There is hardly any justification for not fully recovering the cost of passenger services in case of AC 1 st Class, First Class and AC 2-Tier. However, since one of the factors for non- recovering full cost from these classes could be issue of free and concessional fare passes/tickets to various beneficiaries in good numbers, this practice needs to be scaled down,” it added.

The CAG expressed concern over the huge backlog of renewal and replacement of over aged assets in railway system and said it needs to be addressed for safe running of trains.

Total Capital grew from Rs 1,83,488 crore as on 31 March 2013 to Rs 3,12,635 crore as on 31 March 2017, total traffic handled declined from 7,27,610 million Net Tonne Kilometres to 7,01,813 million Net Tonne Kilometres respectively.

“Railways need to take measures to improve competitiveness of its services vis-à- vis Road and Air travel,” it added.