Delay in projects completion cost Railways over Rs 1 lakh crore: CAG

New Delhi: Delay in the execution of more than 400 projects by the Railways resulted in cost overrun of Rs 1.07 lakh crore, the Comptroller and Auditor General of India has said.

The CAG in its latest report which was tabled in Parliament today said "Target dates for completion of projects were either not fixed or not available on records of the Railway Administration. The physical progress was also slow where target for completion of project was fixed."

It further said "Projects were delayed due to delay in preparation/sanction of estimate and delay in acquisition of land. Delay in completion of projects resulted in cost overrun of Rs 1.07 lakh crore and huge throw-forward of Rs 1.86 lakh crore in respect of 442 ongoing projects."

The CAG in its report said there was lack of consistency in prioritisation of projects and also there were several instances of under-utilisation of funds which had adverse impact on the physical progress of projects.

The report observed that while the allotment of funds was not proportionate to the requirement, there were several instances of under-utilisation of funds which had adverse impact on the physical progress of projects.

Noting that during 2009-14, 202 projects were added to the existing shelf of ongoing projects ignoring existing fund constraint and as a result only 67 projects were completed during the same period.

The federal auditor observed that 75 projects are ongoing for more than 15 years and of them, three projects are 30 years old. Despite budgetary support from the Finance Ministry, progress of national projects was far from satisfactory resulting in substantial time and cost overrun.

It has found that the rate of return was less than the prescribed benchmark of 14 percent in 236 (53 percent) ongoing projects.

"There was lack of consistency in prioritisation of projects. While the allotment of funds was not proportionate to the requirement, there were several instances of under-utilisation of funds which had adverse impact on the physical progress of projects," it noted.

CAG has found that the progress in respect of cost sharing projects was badly affected as state government declined to bear the enhanced cost of the project and as a result, expenditure to the tune of Rs 13,135 crore incurred on cost sharing projects remained unproductive.

Blaming railways "deficient planning" for collapse of tunnels and bridge diversion, the national auditor said there were several instances of collapse of tunnels, bridges, diversion of alignment, etc resulting in extra/wasteful expenditure in addition to idle investment of Rs 137.41 crore.

"Delay in land acquisition caused slow progress of the project and two projects had to be frozen due to failure in acquisition of land resulting in wasteful expenditure of Rs 60.78 crore," CAG said.

It has suggested that railways need to revisit all projects which are ongoing for more than 15 years and do not fulfil the prescribed Rate of Return for assessing th  viability of the projects.

Suggesting the need to ensure optimal utilisation of funds so as to avoid mismatch between allotment and utilisation of fund, CAG recommended that railways ensure timely preparation of estimates with reasonable accuracy for efficient financial control over the project cost.

CAG has also suggested monitoring of execution of projects both at the Railway Board and at the zonal levels which need to be strengthened to avoid wasteful expenditure and blocking up of fund.