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  1. CAG on Railways – ‘GE unit not in sync, rethink flexi-fares’

CAG on Railways – ‘GE unit not in sync, rethink flexi-fares’

The Comptroller and Auditor General of India (CAG) has said that General Electric’s (GE) diesel locomotive plant at Marhowra in Bihar — an Rs 17,126-crore contract was awarded to the US-based firm in November 2015 — is “not in sync with the overall strategic vision” of the Indian Railways (IR) which is electrifying most high-speed routes.

By: | New Delhi | Published: July 21, 2018 5:19 AM
The country’s top auditor also opined that the transporter’s flexi-fare system for top-end trains has backfired, leading to a fall in occupancy, and suggested that the fare structure be rationalised across all types of trains, rather than just premium ones.

The Comptroller and Auditor General of India (CAG) has said that General Electric’s (GE) diesel locomotive plant at Marhowra in Bihar — a Rs 17,126-crore contract was awarded to the US-based firm in November 2015 — is “not in sync with the overall strategic vision” of the Indian Railways (IR) which is electrifying most high-speed routes. The country’s top auditor also opined that the transporter’s flexi-fare system for top-end trains has backfired, leading to a fall in occupancy, and suggested that the fare structure be rationalised across all types of trains, rather than just premium ones.
In a report tabled in Parliament on Friday, the CAG said the diesel locomotives procured under the agreement with GE would have no scope for productive use in future, given the electrification drive for the railways’ own network and also the dedicated freight corridor, which will be run fully on electricity.

After taking charge of the railway ministry last year, Piyush Goyal had announced that the transporter would completely phase out diesel locomotives “in the next five years” and would switch to electric locomotives with the focus on increasing speed, and said the process would save the entity about Rs 11,500 crore annually. Though reports said later that Prime Minister Narendra Modi asked the railways to reconsider the 100% electrification move, it is clear that need for diesel traction would remain only for low-traffic routes in future. High-horsepower diesel locomotives (which the GE unit will manufacture) cannot be used optimally for such routes. At present, around 42% of the tracks are electrified.
As regards the flexi-fare scheme introduced on all Rajdhani, Duronto and Shatabdi trains in September 2016, the CAG said that the scheme has resulted in a decrease in occupancy in all classes except the sleeper class in Duronto trains.

Even in AC-3 class, which is the only profitable class for the transporter, the occupancy dropped significantly since the scheme’s introduction. “Vacant berths increased from 0.66% in pre-flexi period to 4.46% in post-flexi period,” the CAG said. “In terms of absolute numbers, the Premier trains carried 2,40,79,899 passengers during post-flexi period as compared to 2,47,36,469 passengers during pre-flexi period. There was de-growth of 2.65% despite the availability of higher number of births/seats, which resulted in sub-optimal utilisation of national assets,” said the report. It added that “there is a need for review and fine-tuning in the scope of the scheme so that not only more revenue is earned but number of passengers also increase”.

The CAG compared air and train fares for different advance reservation periods in 13 sectors which showed that airfares were cheaper than the respective train fares for a large number of routes.

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