CAG indicts rlys for poor contract management

New Delhi, May 29 | Updated: May 30 2007, 05:30am hrs
The Comptroller and Auditor General of India (CAG) has indicted the Railways for its poor contract management practices and delays in finalising arbitration cases which led to an avoidable payment of Rs 13.31 crore as well as prolonged litigation.

"The large number of cases decided against the Railways indicated that the fault lay with the Railways for not following the contract management practices as prescribed by various codes and rules," the CAG said in its report for the year ended March 2006.

To verify the efficacy of the system, the CAG reviewed the Arbitration awards finalised between 2002-03 and 2005-06 in 12 of the 16 zonal railways and Metro railway/Kolkata.

A total of 2,228 cases were dealt with during 2002-03 and 2005-06, it said adding that the maximum number of cases dealt with were in Northern Railway (348) followed by Central (290) and South Eastern (276) Railways. Only 782 cases were finalised in the last four years and again of these finalised cases, 704 (90%) were awarded against the Railways resulting in payment of Rs 49 crore. Of these cases, 434 cases (19 %) were test checked the disputes were largely on account of calculation mistakes, or non-supply of material.