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CAG pulls up Railways over Shatabdis

The Comptroller and Auditor General of India has criticised the Railways for introducing Shatabdi trains "without conducting any traffic survey/feasibility studies."

In its latest report, CAG has pointed out that in South Central Railway, a Shatabdi Express train (No 2031/2034) was introduced with effect from February 19, 1999 to run between Rajahmundry-Secunderabad-Rajahmundry, consisting of six AC coaches and two generator-cum-brake vans.

The service "remained grossly un-remunerative right from the maiden run due to poor occupancy," says CAG in the report, reviewing the period from 1996/97 to 2000/2001.

The report was presented to Parliament last month.

CAG says during the 11-month period from February 1999 to December 1999, while actual earnings amounted to Rs 17 million, the cost of running the Shatabadi train totalled Rs 58 million.

"Thus, the service sustained a loss of Rs 41 million."

It says, before introducing the train neither was any proposal mooted by the Railway administration nor was the prescribed test to assess financial remuneration carried out.

The report says due to poor occupancy, booking for two coaches had to be suspended "right from the beginning." The occupancy percentage of the monthly accommodation was found to be "very poor" in Rajahmundry-Secunderabad section, it adds.

CAG further says during the February-June 1999 period, the occupancy "did not even once touch the breakeven point of 6.3 per cent."

CAG says a cost and profitability study conducted by the Railway administration in June 1999, based on the sample of May 1999, "had indicated that the service was incurring losses due to poor occupancy."

It says in July 1999, the administration apprised the Railway Board of the loss being incurred on this service and "in August 1999 proposed to the board for cancellation of this Shatabdi service.

Finally, with the approval of the board, the service was withdrawn from December 28, 1999."

CAG says when the matter was taken up in April 2000, the Railway administration in August 2000 contended, "keeping in view the persistent public demand and popularity of air-conditioned services on existing trains and the lack of air travel facilities, the Shatabdi train was introduced between Rajahmundry and Secunderabad to serve the affluent section of the travelling public."

Not accepting this and other explanations, CAG says: "Railway administration's acceptance of the fact of poor patronage of this train indicates that no effective feasibility study was conducted."

Any feasibility study for introduction of a new train, says the report, would have taken into consideration the competitive road transport and the fare structure.

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