In a major blow to the American conglomerate General Electric's (GE) plan to come up with a diesel locomotive manufacturing unit at Marhowra in Bihar, the Comptroller and Auditor general (CAG) on Friday came out with its report that stated the project is not “in sync with the overall strategic vision of Railways”.
The diesel locomotives procured under this agreement would have no scope for productive utilisation in the Indian Railway network in future, CAG said in its report. It further added the Railways themselves have decided to significantly reduce in-house production of diesel locomotives at Varanasi from 2019-20 onwards. Thus, setting up of a new infrastructure for production of diesel locomotives and incurring a huge liability of Rs 171.26 billion is not in sync with the overall strategic vision of Railways.
The Ministry of Railways proposed setting up of diesel locomotive manufacturing unit at Marhowra in September 2006. The contract was awarded to GE Global Sourcing India in November 2015 for setting up of diesel locomotive manufacturing unit along with maintenance depot at Roza and Gandhidham under a $2.6 billion contract. “As a long time has elapsed, there was a need to reassess the necessity of setting up of new diesel locomotive manufacturing unit, before awarding the contract. Audit analysis showed that the diesel locomotives available with the Railways are sufficient in numbers to take care of the present needs,” CAG said.
The Indian Railways are planning to move to complete electrification of its broad gauge routes by 2021 and would also run the freight trains in dedicated freight corridors (DFCs) on electricity. Even if, the Railways do not go for 100 per cent electrification, it is expected that most of the high traffic routes would definitely be electrified and the need for diesel traction would remain only for low traffic routes, for which high horse power diesel locos are not likely to be used optimally.
The auditor has also looked into the flexi-fare scheme in all Rajdhani, Duronto and Shatabdi trains introduced in September 2016. It stated that post implementation of this scheme, there was decrease in occupancy in all classes except Sleeper class in Duronto trains. Even in AC 3 class, which was one of the most profitable classes, the occupancy dropped significantly after introduction of flexi fare and the vacant berths increased from 0.66 per cent in pre-flexi period to 4.46 per cent in post-flexi period.
Railway had earned Rs 5.52 billion from passenger earnings from the Premier trains post flexi fare system during from September 2016 to July 2017. However, there was de-growth of 2.65 per cent in number of passengers despite availability of higher number of berths.
The parking system of Indian railways also faced CAG criticism. “As regards parking lots, railways did not execute agreements promptly in many cases and also did not enter into agreement in some places. The contractors were managing the parking lots in an un-professional manner and the railways were not able to ensure that they provide service as per the agreements and recover dues from contractors,” it added. It also raised alarm on the lack of land management cell for commercial plots managed by commercial department at any level in the Railways.