India - Thirteenth Railway Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6055-IN PROJECT PERFORMANCE AUDIT REPORT INDIA THIRTEENTH RAILWAY PROJECT (CREDIT 582-IN) January 10, 1986 Operations Evaluation Department This document bas a restricted distrlmbtlon and may be med by recipients only in the perfornmance of their ofical duties. Its contents may net otherwise be disclosed withoat World Bank authorization. FOR OFFICIL USE ONLY THE WORLD BANK Washagton, D.C. 20433 USA. Oute a Dectm4asral Opraum tvahatwe January 30, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report India Thirteenth Railway Project (Credit 582-IN) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on India Thirteenth Railway Project (Credit 582-IN)" prepared by a specially constituted independent group comprising a senior Bank staff member and two outside consultants. Attachment This document has a estricted distribution and may be used by wocipients only in the perfomance of their offcial duties. Its contents may not othermise be disclosed without Worl Bak authorition. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT INDIA THIRTEENTH RAILWAY PROJECT (CREDIT 582-IN) TABLE OF CONTENTS Page No. Preface ...................................... i Basic Data Sheet ...................................... 11 Highlighte ..................................... v PROJECT PERFORMANCE AUDIT MEMORANDUM I. BACKGROUND ...................................... II. THE PROJECT ..................................... 2 III. PROJECT IMPLEMENTATION AND ACHIEVEMENTS ......... 4 IV. POINTS OF SPECIAL INTEREST ...................... 5 V. ROLE OF THE ASSOCIATION ......................... 12 VI. CONCLUSIONS .................................... 12 ANNEX A PROJECT COMPLETION REPORT 19 ANNEX B SUPPLEMENT TO PROJECT COMPLETION REPORT 67 ANNEX C SUPPLEMENTAL STATISTICAL TABLES TO PROJECT COMPLETION REPORT 73 ANNEX D BORROWER'S COMMENTS 83 This document has a restricted distribution and may be used by recipients only in the perforsnc of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECT PERFORMANCE AUDIT REPORT INDIA THIRTEENTH RAILWAY PROJECT (CREDIT 582-IN) PREFACE This report presents a performance audit of the Thirteenth Railway Project in India for which Credit 582-IN for JS$110 million equivalent was made in August 1975 and final disbursements were made in October 1978. The report consists of a Project Performance Audit Report (PPAR) and a Project Completion Report (PCR) prepared by Indian Railways (June 1979), a Supplement to the Project Completion Report prepared by the South Asia Region (August 1980) and a Supplement of Statistical Tables to the PCR. The PPAR is based on the PCR and its Supplement and a review of the project files and documents. It was prepared by a specially constituted independent group comprising a senior Bank staff member and two outside consultants. No mission was undertaken in connection with this audit. The PCR provides a large amount of material on the Project and its implementation. The Supplement provides some additional information. The PPAR agrees on most points with the PCR and the Supplement; it adds further comments on the performance of Indian Railway and IDA's role in the Railways development during the Project period. The South Asia Regional staff have no comments on this PPAR. The Borrower's comments on an earlier draft PPAR are attached as Annex D. These cover the important points made in this version, and, in several cases provide some additional information and comments. - 1i - PROJECT PERFORMANCE AUDIT REPORT BASIC DATA SHEET INDIA THIRTEENTH RAILWAY PROJECT (CREDIT 582-IN) KEY PROJECT DATA Original Actual or Item Plan Estimated Total Project Cost (US$ million) 1,010 n/a a/ Overrun (%) - n/a Credit Amount (US$ million) 110 110 Disbursed ) 110 110 Cancelled ) December 31, 1983 - - Borrower's Obligation ) - 110 Date Physical Component Completed 03/77 03'78 Proportion Completed by Above Date (%) 100 n/a a/ Proportion of Time Overrun (%)- 60 Economic Rate of Return (%) 20 18 Financial Performance Good Satisfactory Institutional Performance Good Mostly satisfactory Cumulative Estimated and Actual Disbursements (US$ Millions) FY76 FY77 FY78 FY79 (M) Estimated 50.0 110.0 110.0 110.0 (ii) Actual 38.8 66.8 100.7 110.0 % of (ii) to (i) 78 61 92 100 OTHER PROJECT DATA Original Actual or Item Plan Current Estimate Government's Application - Late 1974 Negotiations 07/75 07/75 Board Approval - 08/19/75 Credit Agreement Date - 08/26/75 Effectiveness Date 10/24/75 10/10/75 Closing Date 09/30/77 09/30/78 Borrower Government of India Executing Agency Indian Railways Fiscal Year of Borrower April 1 - March 31 Follow-on Project Name Railway Modernization Second Modernization and Maintenance Project and Maintenance Credit/Loan Number 844-IN (Credit) 1299/2210-IN Credit/Loan Amount (UIS$ million) 190 200/200 Credit/Loan Agreement Date 11-13-78 12/23/82 a/ The cost and Completion of the remaining Project components in 1977/78 cannot be ascertained, because they were integrated within the same categories of new investments carried out in that year. However, the Credit was fully disbursed on the revised Closing Date. MISSION DATA Month/ No. of No.of Man- Date of Item Year Weeks Persons weeks Report Sector Review Mission 05/74 4.0 3 12.0 07/10/74 Project Preparation a/ 10/74 2.0 1 2.0 11/13/74 Preappraisal 12/74 3.0 3 9.0 02/12/75 Appraisal 04/75 3.0 5 14.0 07/28/75 Supervision I b/ 12/75 1.0 2 2,0 12/29/75 Supervision II 09/76 1.0 4 4.0 01/17/77 Supervision III 07/77 0.4 3 1.0 07/25/77 Supervision IV c/ 02/78 4.0 4 16.0 03/13/78 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Indian Rupees (Rs) Year: Exchange Rate: Appraisal Year Average 1975 US$1 = Rs 7.85 Intervening Years Average 1975 - 1978 US$1 = Rs 8.5 - 9.0 Completion Year Average 1979 US$1 - Rs 8.6 a/ In connection with supervision of First Shipping Project. b/ All but one of the supervision msisions were undertaken in conjunction with the preparation and processing of a new project. In addition, a consultant visited IR on two occasions in connection with preparation of the Corporate Plan. c/ This mission's primary purpose was the appraisal of the next railway project. - iv - CURRENCY EQUIVALENTS Currency Unit = Indian Rupees (Rs.) Rs. 1.00 Paise 100 US $1.00 Rs. 7.85 (at appraisal) Rs. 8.60 July 1978 WEIGHTS & MEASURES Metric U.S. Unit I Ton 1.102 Short Tons 1 Km = 0.621 Mile 1 Ton-km 0.621 Ton-Mile 1 Pass.-km 0.621 Pass.-Mile 1 Meter 3.281 Feet GLOSSARY OF ABBREVIATIONS BG - Broad Gauge (1.676 m) DF - Development Fund DRF - Depreciation Rescrve Fund EMU - Electric Multiple Unit I.C.B. - International Competitive Bidding IR - Indian Railways MG - Metre Gauge (1.00 m) NG - Narrow Gauge (0.762 m and 0.610 m) PF - Pension Fund RRF - Revenue Reserve Fund Fifth Plan - Fifth Five Year Plan (1974/75 - 1978/79) pass-km - passenger kilometer ton-km - ton kilometer GOVERNMENT OF INDIA FISCAL YEAR APRIL 1 - MARCH 31 -v ~ HIGHLIGHTS The Project reviewed in this report was the thirteenth in a series which started in 1949, to assist in financing the renewal program of Indian Railways (IR) and expanding its carrying capacity. The IDA credit of US$110 million equivalent, approved in 1975, was to finance the foreign exchange component of a two-year slice of IR's investment program; the estimated total Project cost was US$1,010 million. Implementation of the Project was delayed, mainly due to a shortage of local funds. The C-edit Closing Date wab postponed one year to allow disbursements to be completed. Other than the standard conditions, the only specific covenants in the Credit Agreement dealt with depreciation, the level of earnings and the need to keep IDA informed on decisions regarding transport sector planning and management. The Project supported a minimum investment program when the Indian economy was going through a difficult period. Overall, the project came close to achieving its principal objective to provide capacity for the forecast increase in traffic during the Project period within the Five Year Investment Program. During the Project period, IR's operational and financial performance improved and IR was able to meet its obligations under the Credit Agreement, except for a minor shortfall in the dividend payment to Government in 1975/76. However, the Project included some investments of low economic priority while inadequate resources were devoted to higher priority investments in replacements and renewals. It would seem that the resources allocated to the Depreciation Reserve Fund were inadequate to cover normal replacements and renewals of assets and that the financial results overstated the profitability of IR, to the extent the Depreciation Reserve Fund was underfunded. These issues should have received more attention at Appraisal. The following points may be of particular interest: (i) the sharp cut which had to be made in IR's original investment proposals under the stabilization program (para. 11); (ii) the marginal investments under the Project (paras. 14-16 and 19); (iii) the increasing backlog of investments in replacement and renewals (para. 17); (iv) investment priorities should have been established more clearly at Appraisal (paras. 14 and 29); (v) the improved financial situation of IR (para. 25); (vii) the need to clarify the adequacy of allocations to the Depreciation Reserve Fund at Appraisal (para. 26); (viii) The need to adopt generally accepted principles with regard to calculation and retention by IR of depreciation allowances (para. 27); (ix) IR's overall achievements during the Fifth Five-Year Plan period (para. 31). PROJECT PERFORMANCE AUDIT MEMORANDUM INDIA THIRTEENTH RAILWAY PROJECT (CREDIT 582-IN) I. BACKGROUND 1. Indian Railways (IR) is one of the three largest railways under one management In the World. Its network, consIsting of some 60,000 route-km - broad gauge (BG) 30,000 km, meter ga,:ge (MG) 25,000 km and narrow gauge 4,500 (NG) - is larger and carries more passengers over greater distances than China and the USSR, while the railways of China and USSR both carry more freight traffic than IR. About 13,000 route km of IR are double tracked and 11,000 route-km are electrified. In 1977/78,1/ IR carried 237 million tons of freight over an average distance of 686 km and about 3.5 billion passengers over an average distance of 55 km; its revenues amounted to about US $3 billion equivalent. About 80% of IR freight was bulk traffic, mainly coal, iron ore, steel, cement, fertilizer, petroleum products and food grains, and this trafic was concentrated on some 24,090 route-km of the system, mainly the broad gauge. IR employs some 1.7 million people and plays a vital role in the economy in moving passengers and bulk cargo over long distances as well as commuters near the major cities. Although road transport is taking a growing share of total motorized traffic. IR moved in 1977/78 about 58% of the total ton-km of freight and 44% of total passenger-km. 2. Formal jurisdiction over IR is vested in the Minister of Railways, who is a member of the Central Cabinet. Overall management is in the hands of the Railway Board (Ministry of Railways). There are nine railway zones, each with a General Manager who reports directly to the Railway Board. IR owns and operates four manufacturing units; two for locomotives, one for coaches and one a recently completed wheel and axle plant partly financed under IDA Credit 844-IN. IR has its own research and design organization (RDSO). Government control over the railways is extensive. IR investment plans require the approval of the Government Planning Commission and its operating and investment budgets, tariffs as well as a number of operational matters are discussed in detail by Parliament. However, IR management including the Director Generals of the zonal railways, enjoy a large measure of autonomy for day-to-day operations. 3. The Project which is now being audited is one in a long series of Loans and Credits initiated in 1949 to assist IR with its rehabilitation program after World War II. Most of these Loans and Credits, including the one now audited, were treated as a form of Program/Sector lending to the railways in that they financed a time-slice of IR's Five-Year Investment Plans. In 1978 a more project specific approach was adopted taking the form of a Railway Modernization and Maintenance Project (Credit 844-IN); a follow-up project (Loan 2210-IN/Credit 1299-IN) was approved by the Board in November 1982. A Loan for a Railway Electrification and Workshop Modernization Project was approved by the Board in May 1984. Bank Group lending to IR so far as aggregated US$1,767.2 million equivalent, of which 1/ FY 78 US$859.7 million has been extended in Loans and US$907.5 million in Credits. Industrial import credits have also covered the cost of some parts and components for IR's manufacturing activities. The only previous Project Performance Audit of IR was completed in June 1977 (PPAR - India Eleventh and Twelfth Railway Projects (Credit 280- and 448-IN) Sec M77-541). 4. The principal objective of IR since the early 1950s has been to keep pace with the country's economic development. This has been a challenging task. Since 1950/51 until 1977/78, fteight increased at an average annual rate of about 3.7% from 93 million to 237 million tons, while the number of passengers increased from 1.3 billion to 3.5 billion at an average annual rate of about 4%. In terms of ton-km and passenger-km the average annual growth rates were 4% and 5.2% respectively. Traffic demand tended to exceed IR's carrying capacity, at least until the mid-seventies. Meanwhile, IR supported the development of India's domestic production of materials and equipment for its own use, in order to save scarce foreign exchange resources. As a result, the foreign exchange component of its investments had declined from some 50% under the first project to 14% under the project now under audit. Prior to 1972/73, IR's financial performance has been good, but started to deteriorate in 1973/75 when it could not meet its obligations fully. IR was again able to meet its obligations under the Project, except for a minor shortfall in the divident payment in 1975/76; however, it would seem that the financial results in that period overstated its financial profitability. II. THE PROJECT Purrose of the Project 5. The purpose of the Project under audit was to renew part of IR's assets and to expand its carrying capacity. The Project consisted of the investments scheduled to be made by IR for the period from April 1, 1975 to March 31, 1977, estimated at approximately $980 million equivalent and the importation of necessary spare parts for maintenance of locomotives and rolling stock amounting to approximately $32 million equivalent. Main Elements of the Project 6. The main elements of the Project were the acquisition of about 350 locomotives, 300 electric multiple units, 1,500 coaches and 20,000 wagons (in terms of four-wheelers2/), as well as the modernization of workshops, and sheds, track renewals, bridge works, line capacity works, signalling, electrification, new lines and staff and passenger amenities as well as spare 2/ IR uses its four-wheel, two axle freight wagons with a load capacity of about 20 tons as standard measuring unit. -3- parts for the maintenance of locomotives, rolltng stock, plant and machinery. The following is the cost breakdown by major groups of investments: % Total US$ million Investment IDA Credit Investment Local Foreign Total Expenditure US$ (million) 1. Locomotives and Rolling Stock 332.3 87.1 419.4 42.8 66.8 2. Workshops and Sheds 45.4 - 45.4 4.6 - 3. Plant and Machinery 11.9 7.5 19.4 2.0 3.3 4 Track Works, Bridges & Electrical Works 254.9 12.0 266.9 27.3 12.0 5. Signalling and 33.4 3.0 36.4 3.7 1.4 Telecommunications 6. Electrification 54.1 5.0 59.1 6.1 4.2 7. New Lines 46.4 - 46.4 4.8 - 8. Other Works, Services 51.0 8.0 59.0 6.0 6.7 and Inventories 9. Staff Welfare and 26.4 - 26.4 2.7 - Quarters Total Investment 855.8 122.6 978.4 100.0 94.4 Spare Parts - 31.6 31.6 - 15.6 Total Project Cost 154.2 1,010.0 - 110.0 The categories specified for procurement in the Cedit Agreement were somewhat different from the above since they were partially grouped by materials or type of procurement (international competitive bidding versus proprietary procurement). Covenants 7. Other than the standard covenants, the only Project-specific covenants dealt with the amounts to be set aside for depreciation, the level of earnings and the need to keep IDA informed of decisions regarding transport sector planning and management. -4- III. PROJECT IMPLEMENTATION AND ACHIEVEMENTS 8. The project covered a two-year time-slice (1975/76 and 1976/77) of IR's Five Year Investment Program, 1974-75 to 1978/79. On the original Closing Date of September 1977, the Loan Account showed a balance of US$30.6 million, mainly as a result of slower than anticipated project implementation due to a shortage of local funds. Part of the balance was also the result of lower foreign exchange requirements through expanding domestic production of certain components. At the request of Government, IDA agreed to reallocate the balance of the Credit proceeds and to extend the Closing Date by one year, to September 30, 1978, to allow full disbarsement of the Credit. It is not clear whether this meant that the revised Project was extended to cover all investments of the three years, irrespective of the source of financing. The actual cost of the original Project items tannot be ascertained through the PCR, because the Project items which were not completed before the initial Closing Date were merged with similar components included in the 1977/78 program and financed from other sources. During the original Project period, IR spent Rs. 7,243 million, or 94% of the Rs. 7,680 million estimated at appraisal. Shortfalls affected locomotives (including electric multiple units), track improvements, electrification, inventories and improvements in workshops and sheds; expenditure exceeded appraisal estimates with respect to plant and machinery, wagons and coaches and the construction of new lines (see Supplement to PCR, Aknex C). 9. The Project had been identified and appraised when the Indian economy was going through a difficult period. Agriculture had suffered from poor monsoons; increases in oil prices in 1973 placed a new burden on the balance of payments; and labor unrest led to a one-month strike on the railways in 1974. To improve the situation, Government had embarked on a stabilization program to establish the conditions for resuming growth. The Draft Fifth Five-Year Plan for 1974/75-1978/79 had to be revised to accord with the stabilization program. This Plan was only approved by Government in 1976. In the circumstances, the scope of the Project remained unclear until close to Appraisal, when it was agreed that the size of the Project would be limited to a two-year time-slice of the Draft Five Year Plan, as elaborated in nominal terms, although prices had increased 35% since the Plan had first been prepared and were expected to increase another 20% by the end of the Project period. This represented a reduction, in real terms, of about 40% in the original size of the Plan and the physical composition of IR's investment plan was adjusted accordingly. The Appraisal had urged for a significant cut in the original Plan, in real terms, considering the shortage of local funds at that time as well as the existing spare capacity in IR and the lower traffic forecast (para. 30 and PCR). Actual developments under the Project confirm that the resources available to IR were insufficient to carry out the Project on time. 10. As mentioned in the PCR, the Project period covered record years f or IR in several respects. Freight traffic increased by about 27 million tons (13.5%) in 1975/76 and by a further 16 million tons (7.9%) in 1976/77; in terms of ton-km the average annual growth rates were 10.3% and 5.8%, respectively. The total number of passengers increased by 21% and 12%. - 5 - Thereafter, freight traffic declined and the 1976/77 levels were not achieved again until 1980/81. Passenger traffic however continued to expand. During the two original Project years and it. the third year IR's operational performance greatly improved and achieved, or came close to achieving, all-time records, in particular in wagon availability and turnaround, locomotive utilization and average train speeds. As a result of the increased traffic, two general tariff increases in 1974 and subsequent selective adjustments of tariffs, IR was also able to meet its financial obligations under the OCedit, in particular with respect to its contributions to the Depreciation Reserve Fund and dividend payments to Government, except for a minor shortfall in the dividend in 1975/76. Finally, several studies started under previous projects were completed, in particular the Corporate Plan in 1976. This Plan was a comprehensive effort to elaborate IR's basic objectives and a long-term strategy for its tevelopment. The Plan provided a comprehensive long-term perspective on IR's development up to 1988/89, including traffic demand, marketing issues, equipment and other infrastructure requirements and their deployment, operational issues and strategies, a manpower plan, and financial analyses and prospects. Equally important, the Plan was prepared with the full participation and close cooperation of the zonal railways, such cooperation being essential in as large an organization as IR to ensure consistent views on development and to bring field experience into the planning and management process. However, as explained in the following chapter certain developments emerged during the Project period which were bound to affect IR's performance in later years, while its financial accounts seem to have overstated its profitability compared with earlier years. IV. POINTS OF SPECIAL INTEREST Project Investments 11. As explained in para. 9, the Project was conceived under difficult and uncertain circumstances. While the level of planned investments for the Project period was maintained in nominal terms, it represented a cut of almost 40% in real terms from the Draft Five-Year Plan proposals and IR's share in total Plan investments fell significantly compared to its share under previous Plans. Furthermore, actual expenditure on investment during the original Project period was about 5% less than planned. This raises two interrelated questions: (i) whether the level of investment was acceptable -to meet at least the minimum requirements of IR; and (ii) whether the composition of the investment plans addressed the high priority needs of IR. 12. As explained in para. 17 below, Project investments were insufficient to cover normal replacement of assets and the composition of the investment program could have been improved if investments in marginal works, in terms of their economic/financial returns, had been reduced and the -6- related resources allocated to higher priority replacements. The impact of the cuts did not make itself felt during the original project years when IR's performance and traffic reached near record levels, although in 1977/78 and later years IR had difficulty in meeting the transport demand for freight. 13. The economic evaluation by the Appraisal mission indicated that Project investments in replacements yielded a higher return than the invest.ints in creating additional capacity. In line with this finding, the Appraisal mission accorded first priority to investments in replacements and strongly defended an increase in the 1975/76 and 1976/77 allocations to the Depreciation Reserve Fund. These allocations were subsequently included in the Credit Agreement and were met by IR. However, as explained in para. 17 below, it would seem that the allocations were insufficient to cover adequate replacements. 14. The great majority of investments under the Project covered high priority needs, but it also included some investments in items with lower economic priority such as new lines, track doubling and gauge conversion. The Appraisal acknowledged these _.o be marginal investments, but apparently did not make a concerted effort to reduce their scope, because they accounted for a small percentage of total investments and involved negligible foreign exchange costs. However, in view of the prevailing shortage of resources this effort should have been made, in particular, to shift resources to much higher priority investments in renewals and replacements. The Appraisal did not indicate relative economic/financial priorities of individual investments and the above marginal investments were grouped with other higher priority investments in the same category. Altogether, the total value of these categories of investments amounted to about Rs. 1,500 million (US$195 million). The investment in new lines covered 28 schemes of which 20 were on BG and 8 on MG, at a total cost of Rs. 364.2 million (US$46.4 million). Apparently, most of .his expenditure was for spurlines serving new mines and industrial ventures, but it also covered developmental lines to open-up new areas of the country. As indicated in the Audit Memorandum on the Eleventh and Twelfth Railway Projects, IR suggested that the spurlines would carry large volumes of traffic and therefore were justified. But IR also agreed that development lines were usually approved by Parliament primarily on socioeconomic grounds and that such lines do not always meet economic criteria. This is an area where the Government and IR should have tried to economize in view of the prevailing scarcity nf resources for higher priority investments. 15. The above categories also included Rs. 1,173 million (US$149 million) to cover investments in line capacity works, including 47 schemes on BG, for track doubling and 8 schemes for widening MG to BG. The priority of some of these investments should have been more fully examined at Appraisal to ensure that the limited resources available were devoted to the highest priority needs. Even though, during the initial Project period, IR reduced double tracking from 450 km as planned to 288 km, further cuts may have been justified. As explained in the Audit on the Eleventh and Twelfth Projects, some lines were being double-tracked for about 10-12 train movements per day -7- in each direction. This is a low starting point compared with experience in other countries and less costly solutions, such as improved signalization, should therefore have been explored. According to IR, the methodology and criteria were justified by the operating conditions in India. However, IR has now confirmed that it is considering cost-effective alternativeF for increasing track capacity, including improvements in signalling. 16. As for the gauge widening works included in the above categories, such schemes can be justified where they lead to a significant reduction in transshipments and can be carried out when track overhaul is needed. However, when such works are highly dependent on significant savings in operating costs, their justification becomes more debatable. The Appraisal Report does not substantiate these works in any detail, which would have been desirable under the circumstances. 17. Some shortfalls developed during plan implementation in improving the workshops and sheds, the procurement of locomotives and, especially, the renewal of rails and sleepers (Supplement to PCR, Annex A). While the Project covered the renewal of 2,050 km of rails and 2,700 km of sleepers, only 1,537 km (75%) and 2,308 km (86%) of rails and sleepers were renewed during the initial Project period. It would seem, moreover, that the planned annual rate of renewals of about 1,000 km per year was already below normal requirements since it implies an average life-expectancy of rail for the entire network exceeding 100 years, which seems to be overly long. The low level of planned replacements combined with the delays in project implementation, if sustained for too long, were bound to affect operations adversely through such factors as worn-out rails requiring speed restrictions and causing derailments. The low levels of planned and actual expenditures on rail renewals also raise doubts about the adequacy of the financial allocations to the Depreciation Reserve Fund. This issue would have become more apparent at Appraisal if IR had been requested to prepare an operational plan for track overhaul, based on a comprehensive inventory and assessment of the conditions of the existing track, as done by other railways at that time. 18. The Project provided an allocation of US$419.4 million, or 43% of the total cost of project investments, including renewals, for the acquisition of locomotives and rolling stock. The following table compares planned with actual acquisitions. Planned Actual Locomotives 350 290 Electric Multiple Units 311 192 Coaches 1,536 1,786 Wagons (four wheeler equiv.) 20,500 24,159 - 8 - 19. Procurement of freight wagons during the original Project years exceeded the Appraisal estimate by 20%. This increase was decided "to prevent adverse repercussions on the wagon-building industry" (PCR, para. 3.03). However, the related outlay put an onus on IR at a time when essential renewals and replacements had to be postponed because of the shortage of local funds. The shortfall in the procurement of locomotives was probably made up by postponing the scrapping of older steam locomotives, while the shortfall in electric multiple units was compensated by the acquisition of more coaches than planned, although this probably resulted in a lower quality of passenger services than had been planned. 20. Considering the cost of these investments, the Appraisal Report should have contained more information concerning the extent to which these investments were required, together with an enumeration of the types of wagons to be bought, since IR was rapidly shifting its operations from all-purpose trains to block trains of bogie wagons coupled with diesel and electric traction. These changes tended to accelerate the obsolescence of IR's existing fleet of steam locomotives and four-wheel wagons. Although IR had extensive data on its fleet, the Appraisal would have been in a position to provide a better perspective on wagon and traction requirements, if IR had been requested to prepare operational plans for traction and rolling stock along the lines of those used by other railways at that time as planning tools for decisions on the procurement, deployment and scrapping of this equipment. Operations 21. Between 1967/68 and 1977/78, the last year of the extended Project period, the character of IR's operations had changed fundamentally as IR adjusted to new technology, changes in the market and severe resource constraints. Through the Project period, when IR achieved record or near record performance results, the more significant positive features were: - The placing in service of a growing number of diesel and electric locomotives. These locomotives, a fleet of some 2,600, have a workload capacity much greater than steam and hauled about 80% of all freight traffic. - The emphasis on the greater use of bogie wagons, which offer higher load capacity and better load/weight ratios, and which allow the running of block freight trains at higher speeds with greater safety than with 4-wheel wagons. - Freight traffic grew from 197 million tons in 1974/75 to an average of 233 million tons in the extended Project period with wagon turnaround time improving from 14.6 days on BG and 12 days on MG in 1974/75 to averages of 13.2 days on BG and 11.4 days on MG. Carrying the increased tonnage was also facilitated by IR's policy of -9 holding some reserve capacity to allow for sudden upturns in the production and traffic requirements of industry and agriculture. - The growth in passenger traffic (para. 10) - which was met by introducing more commuter and faster long distance and intercity trains and generally providing better amenities - continued at an even higher rate than freight, from 2.4 billion passengers in 1974/75 to 3.5 billion passengers in 1977/78. 22. The Appraisal addressed an important aspect of freight train operations by requesting IR to prepare an Action Plan to improve the wagon turnaround time, as indicated above. The Action Plan was designed to speed up the loading, unloading and marshalling operations, which account for the major part of turnaround time, by the installation of bulk cargo handling equipment for block trains serving major producers and consumers; by consolidation of the distribution system for major commodities such as coal, fertilizers and grains; by establishing coal dumps and large scale depots at major distribution centers to be served by block trains for subsequent distribution by road; and by providing better equipment for marshalling yards, etc. IR succeeded in meeting the turnaround targets agreed to under the Plan for the two original Project years. 23. IR's performance during the Project period and the Fifth Plan shows that it was able to carry more passenger traffic than forecast, although this traffic was accorded much lower priority than freight, while IR had difficulty in meeting the demand for freight transport from 1977/78 onwards. The most probable explanation is that IR has much more control over the utilization of passenger trains than over freight trains, because the retention of freight wagons is mainly in the hands of its customers. For this reason, it would have been desirable for the Action Plan to include a review, or studies, of related aspects such as penalties, customer terminal operations and other measures to enhance customer incentives to speed up loading and unloading. 24. The building of steam locomotives had ceased in 1972 but a large number remained in service, hauling only a relatively modest share of IR's total traffic. IR should therefore have considered either accelerating the scrapping process and/or supplementing it with a policy of "mothballing" part of the remaining steam locomotive fleet, putting it on standby and so allowing economies in maintenance and staff. The same consideration should have been given to the fleet of four-wheel freight wagons. IR Finances 25. IR's financial performance until 1972/73 was good, but the situation started to deteriorate in 1973/74 when the country experienced economic difficulties followed by labor problems and a significant hike in wages and salaries in 1974/75. As a result, IR was unable to pay from its own resources during these two years the required dividend of 5% on "Capital - 10 - at Charge" to the Government and to allocate adequate resources to the Depreciation Reserve Fund. These two issues were addressed at Appraisal with a view to improving IR's financial situation. Accordingly, the Credit Agreement specified two Covenants, one relating to the p,vment of dividend on the Capital at Charge and the other requiring an increase in the appropriation to the Depreciation Reserve Fund. IR complied with these Covenants, except for a minor shortfall in the dividend to Government in 1975/76. Overall, the financial situation of IR improved markedly during the Project period and in 1976/77 there were net operating revenues of R, 872 million compared to Rs. 148 million estimated at appraisal. 26. On closer examination, IR's financial performance and accounting system were more problematic. The allocations to the Depreciation Reserve Fund were determined by IR purportedly on the basis of estimated annual requirements for replacements. This is different in nature from the calculation of depreciation allowances based on conventional accounting practices, and the resulting amounts may be substantially different. While this Audit did not try to calculate a realistic level of depreciation for IR for the mid-1970's, it notes that the renewal allowance implied an over- estimation of the life expectancy of rails and sleepers (para. 17) and that according to Appraisal estimates the price level in India increased by about 60% between 1972/73 and 1976/77, while allocation to the Depreciation Reserve Fund, IR's proxy for depreciation allowances, increased by only about 10% during this period, from Rs. 1,136 million to Rs. 1,250 million. The Audit cnncludes that by the end of the Project period, the consumption of IR's assets through operations as expressed for lack of a better proxy in the allocation to the Depreciation Reserve Fund, was probably significantly understated, and IR's net operating revenue correspondingly overstated. As a minimum the Appraisal should have analysed this problem by providing income accounts and operating ratios based on a calculation, or at least an estimate, of appropriate depreciation allowances for IR on the basis of generally accepted accounting principles. This would also have permitted to shed clearer light on the shortfall in renewal investments discussed in para. 17. 27. The 1982 report of the Government-appointed Railway Reforms Committee recommends for IR to adopt methods equivalent to generally accepted accounting principles for the calculation of depreciation and to authorize the retention by IR of earned depreciation allowances. The Audit strongly supports these recommendations. Economic Evaluation 28. The Appraisal and the reevaluation by IR in the PCR followed the same methodology for estimating the economic return of investments during the Fifth Five-Year Plan period. The reestimated economic return of 18% compares with the Appraisal estimate of 20%. The methodology is based on estimates of traffic volumes which would have to be carried by road assuming that planned investments had not been undertaken, or only partly. This methodology had been adopted under previous railway projects in India as well as elsewnere. - 11 - It suited the experience in previous years, when IR was unable to carry all the freight traffic offered and freight had to be transported over long distances by road at higher cost. However, this methodology has obvious shortcomings; for example, it is not the appropriate approach to justify investments aiming at operational cost reductions such as shifting from steam to diesel and electric traction. The methodology also does not reflect the difference in the quality of services between rail and road and is subject to speculative assessments of traffic that will divert to road transport and of the relevant transport costs. In addition, it did not take fully into account the benefits from investments in expanding commuter rail services to India's major cities, in terms of avoided road congestion if the increased traffic were to be diverted to buses. 29. The limitations of this methodology were recognized (Appraisal Report, para. 6.08) and the Appraisal supplemented the above economic assessment by reviewing some of the detailed technical-financial studies, which had been carried out by IR during preparation of each investment item and which were a prerequisite for any new investment to be included in the Plan. It also reviewed the findings of the Economic Unit attached to the Railway Board and,on the basis of comparative studies of a few projects, agreed that the economic rates of return were in no case lower than the financial rates and that in no case did these two approaches result in contradictory recommendations. The Appraisal found, however, that IR's project evaluations required further improvement in particular with regard to the economic analyses. IR agreed to expand the role of its Economic Unit for this purpose. Thus, the Appraisal seemed to have had at its disposal a wealth of relevant information and, while it succeeded in bringing the size of IR's investment plan in line with available resources, it should have paid more attention to the relative priorities of the investments under the Project (paras. 13-16). 30. The economic evaluation in the Appraisal Report established the principal objectives of the Project as follows: (i) improved efficiency should enable IR to increase its carrying capacity from 185 million tons of freight in 1973/74 to 220 million tons in 1978/79, without investment in additional capacity; and (ii) investments of Rs. 15,900 million would be adequate to increase freight capacity by 30 million tons, to 250 million tons (161.5 billion ton-km) in 1978/79 and to expand passenger services during the same period, from 2.6 billion passengers to 3.0 billion (159.5 billion pass-km). 31. Project performance needs to be judged in terms of achieving these objectives, especially since the methodology for estimating the overall rate of return has certain limitations. Achievements during the entire Fifth Plan period indicate that actual investments during 1974/75-1978/79 were about 14% lower than the Appraisal estimate and that in 1978/79 IR's freight was about - 12 - 11% lower in terms of tons and 7% in terms of net ton-kms, whereas IR's passenger traffic in terms of passengers and passenger-km, was about 20% higher. Overall, therefore, it would seem that IR's performance was more or less in line with the above objectives as the shortfall in freight was at least partly compensated by the higher than anticipated traffic in passengerso V. THE ROLE OF THE ASSOCIATION 32. IDA's contribution to the Project was made at a very critical time, when economic conditions were difficult, especially after the oil price increases in 1973 and the country had embarked on a major stabilization program requiring major cuts in planned investments. Moreover, the Project period coincided with a period of rapid and major developments in the railway system, including a shift from steam to diesel and electric traction and from four-wheeler to more modern bogie freight wagons, enabling the railways to introduce higher speed and safer block trains for bulk cargo freight over long distances. IDA provided essential support in meeting the foreign exchange requirements of a minimum investment program to carry out these operational improvements and to create additional carrying capacity for the expected increase in traffic. 33. The Appraisal devoted considerable efforts to tailor the investment program to available resources and to realistic traffic forecasts and succeeded in slightly raising the allocations to the Depreciation Reserve Fund in nominal terms. To economize investment resources, the AppraiRal also reached agreement with IR on an Action Plan to improve the utilization of the freight wagon fleet. These efforts succeeded only partly in that they could not prevent further increases in the backlog of investments in replacements while marginal investments in new lines, double tracking and gauge widening works were being carried out. It appears, therefore, that the Appraisal should have paid more attention to the adequacy of planned asset renewals and depreciation allowances and to the relative priorities of investments under the Project. A clearer perspective on such priorl.ties could have been gained if IR had been requested to prepare operational plans for traction, rolling stock and track overhaul and to justify the economic priorities of its investment proposals more clearly. VI. CONCLUSIONS 34. The Project supported a minimum investment program under difficult economic conditions and achieved its principal objective; namely, to provide capacity for the forecast increase in traffic during the Project period. A shortfall in freight carried was at least partly compensated by higher than forecast passenger traffic (para. 31). 35. IR made significant progress in making major improvements in its operations, in particular through a continuing shift from steam to diesel and electric traction; the increasing deployment of bogie wagons; and the - 13 - replacement of general purpose freight trains by block trains for moving bulk cargo over long distances. 36. IR also achieved a marked improvement in its financial situation during the Project period, as a result of the upturn in traffic and selective increases in rates and fares. Except for a minor shortfall in the dividend payment in 1975/76, IR was able to meet its obligations under the Credit Agreement calling for slightly increased allocations to the Depreciation Reserve Fund and payment to the Government of the dividend obligation on Capital-at-Charge. 37. The Project period and the two preceding years constituted a turning point for IR. During the fifties and sixties IR had greatly benefited from government support for its investments, but this support dwindled under the pressure of unfavorable economic conditions. Government made sharp cuts in IR's original investment program under the Draft Five-Year Plan and its share of investments in total Plan investments fell to a record low. In particular, it would seem that the planned levels of replacements, in particular with respect to rail, were inadequate to cover normal replacements and renewals of assets. As a result, a backlog of replacement investments continued to increase during the Project period. Some indicators pointed in this direction at Appraisal and this issue should have been analysed more thoroughly and discussed with Government. 38. The Appraisal recognized that IR's investment proposals contained marginal investments in new development lines included by Parliament as well as in double tracking and gauge widening works included by IR. In view of the scarcity of available resources, in particular for high priority replacements as explained in para. 37 above, the Appraisal should have attempted to shift more resources to replacements by reducing the scope of marginal investments. 39. The Appraisal examined a sample of the technical-financial evaluotion studies carried out by IR and could have provided a better perspective on investment priorities. Indeed, considering its own finding that investment in replacements would yield a higher return than other investments and that the agreed allocations to the Depreciation Reserve Fund were too low to cover normal replacements, IR should have been requested to justify its investment priorities more clearly. The Appraisal made a step forward in improving IR evaluation studies in that it reached agreement to strengthen and broaden the scope of work of the Economic Unit in project preparation. 40. During the Project period, IR's financial position showed a marked improvement. However, the allocations to the Depreciation Reserve Fund are different in nature from conventional depreciation allowances and probably were substantially lower than desirable. By the same token, IR's profitability was probably substantially overstated and the Government of India should adopt a different policy regarding calculation and retention of IR's depreciation allowances (paras. 26 and 27), enabling IR to retain more internal funds to cover renewals and replacements. 一7州· 才抓、＇？二｀、沙為吋 15 PMJECT CUTLMIall RI3FORT IIDM - IljlinEMMUH RAWAY PlWECT (WMIT 582-Ill 一／C. 卜一乙州。么｀___ /‘。＇～〞。’沙斤，，斤＇ - 17 - PROJECT 001HPLEPMON BMW 11IDIA - T11111IM-414r PMUM PRDJECr (01MV 582-11,) TABLE OF Q=ITS PHQJwr anpuTI0.4 gmg Page No. I. INTRODUCrIaN 1 II. PROJECT PREPARATIO14 AND APPRAISAL 3 III. PROJECT IZEMIMITATIOD AIX) COST 9 IV. TRAFFIC AID OPERATIO14S 12 V- FIMICIAL PERFORM= 15 VI. IWPITLITIONAL DEVELMOV 19 VII. ECO1401ITC RELVALUATICN 21 VIII. ME RDLE OF THE ASSOCLAMN AM CORMUSIO114S 24 TabIgs 1. Principal Iteras Included in the Project 2. Investi-ent Program 1974-75 to 1978-79 3. Allocation of Public Investments by of Transport, Fourth (1969-70 to 1973-74) and Fifth (1974-75 to 1978-79) plans 4. Production Program of Loca.iotives and Rolling Stock IR's Investment Program (1974-75 to 1973-79) 5. Sumnary of Operating Statistics 6. Freight Traffic 7. Passenger Traffic 8. IR Revenue ani Expenditure 1975-76 to 1979-80 9. IR Balance Sheets 10. IR Foreign Exchange Requirements 11. Schedule of Disbursements 12. Category-wise Utilization 13. Results of Econcritic Evaluation 一州計、－ 才‘一‘才，織。才冷＇/t& l 唱 斗 〕〕〕〕〕’〕〕〕〕〕〕·〕〕〕〕〕．〕‘〕〕〕〕〕〕·〕·，.!!―員―!? - 20 - The national draft rifth Five Year Plan covering the period 1974/75 1978/79 had envisaged certain production targets for the core sector as also for other sectors of the national economy including agriculture,, viningr light industries, fertilizers,, petroleum products,, etc. and the Five Year Plan of the Indian Railways was prepared to provide corresponding transport facilities, Almost at the beginning of the Plan in 1974,, however., it became apparent that many of the Plan targets will require to be reviewed on account of adverse economic developments following in the wake of international energy cricis. This review was,, however,, completed and the Plan was finalized only in 1976 when stabilization had taken place in the economy of the country. 1,04 The Twelfth Railway Project had met a part of the foreign exchange ree-uirement of IR's investment pro- gramme mainly in the first year (197,11/75) of the Five Year Plan and partly of the second year. In continuation of the sam,, GOI and IR asked M% for a Credit of US $ 110 million equivalent to assist in financing the procurement of equipment required on the ongoing pro- gramme of locomotive and rolling stock production and maintenance as well as of track and other works during the years 1975/76 and 1976/770 which were the second and tliird years of Indian "Lailways' Five-Year Investment 'Programme - 1974/75-1978/79. The Credit was intendand to help finance Indian :!ailways' foreign exchange require.. M.nts over a 20 month, period from :.ugust 1.. 1975 to 1!arch 31,, 1977, - 21 - II. PROJECT PARATTI0N AND A-'RAISAL 2.01 The two years 1975/76 and 1976/77 formed part of the IRts Fifth Five Year Investment Programme - 1974/75. .1978/79. 3R's draft Fifth Plan was originally formulated in 1973 on the basis of the production targets in different sectors of the economy envisaged in the draft National Five Year Plan 1974/75-1978/79 and amounted to Rs.23.5 billion (about US $ 30 billion equivalent). Much of the draft Plan, however, became outdated before it could be implemented because of the adverse economic developments in the period 1973-75. The most serious of these developments was the problem of inflation which came in the wake of the international oil crisis. An idea of the magnitude of this problem can be had from the fact that the 1975/76 general price level was about 50% higher than in 1972/73 which was the basis for preparation of the draft Fifth Plan. The need for revising the draft Plan was, therefore, realised in early 1974 itself soon after the increase in the world oil prices but the Plan was finalised only after the stabilisation of the economy in 1976, From the vary beginning, however, it ramained the intention of GOI that, while revising the Plan, the physical targets for the core sector of the economy should be maintained unchanged or should be revised to the minimum extent nossible. Incidentally, it is this sector of the economy comprising power, heavy industrics, coal, other minerals 'etc. which generates tho bulk of IR's freight - 22 - 2.02 hile revieving IR's draft 'ifth Plan it became apparent that with the downward revision in the physical targets of production in different sectors of economys the original projections of freight traffic to be carried by the Railways would also require reduction. In the draft Plan provision of resources had been made correspond- ing to lifting 280 million tonnes of freight traffic or an average lead of 670 kilometres working out to a transport output of 183 billion ton-kms. As the rail- borne freight traffic during 1974/75 was less than 200 million tonnes, it was apparent at the time the Project was appraised that the traffic gro'th originally envisaged was not likely to materialise and that the actual materialisation of freight by the end of the Plan period may be around 250 million tonnes or 167 billion NTKMs equivalent. 2,03 In 1974, GOI and IR requested the Bank for financing the foreign exchange component of the IR's Investment Programme covering the 2 years 1975/76 and 1976/77. The basic objective of this Programme was to enable IR to develop capacity for handling the growth of passenger and freight traffic anticipated and as such ID considered the Project,to be a timely and appropriate step for the development of rail transport sector in India. Accordingly, the necessary project preparation was taken up and appraisal of the Project was carried out ly a Bank Iission in March/April, 1975. - 23 - 2.04 The Thirteenth Railway Project consisted of n3w and on-going works which ware required to continue with cost reduction measures, including modernisation of the equip- ment to meet the projected increase in demand for freight and passenger services. The main elements of the project were the construction and putting into the service of ab.)ut 350 locomotives, about 300 Electric Multiple Units (EMUs), about 1500 coaches and about 20,000 wagons (4-wheeler equivalent). The Project also included line capacity works, track renewals, bridge works and modernisation of workshops & sheds etc, In addition, it included imports of spare parts necessary for maintenance of locomotives and rolling stock, plant & machinery and other equipment for track and signalling, telecommunication and electrification facilities. The total investment cost of the Project was estimated to amount to Rs.7680 million (US $ 978.4 million equivalent), with a foreign e.xchange content of US $ 122,6 million equivalent or 12.4%. In addition# it was estimated that Rs.248 million (US $ 31.6 illion equivalent) would be required for spare parts, making the total project cost Rs.7928 million (US $ 1010 million equivalent) with a foreign exchange content of US $ 154.2 million equivalent. The project cost was based on 1974/75 prices adjusted for price escalation by about 20% over the two years 1975/76 and 1976/77. 2.w5 At the time of the appraisal of the Project, at .rni-uost of the Bank 4ission, an exercise was carried out by = which revealed that, ZEfter catering for the Lull complement of replacement/ronewals as originally rro,:cod and also after providing for the full growth of - 24 - passenger traffic as originally envisaged, the balance amount of the IR's proposed investmcnt programme of ft.23.5 billion in the Fifth Plan would generate an additional capacity equivalent of about 25 million tonnes of freight. With the capacity of about 220/225 million tonnes equivalent which IR had when the Fifth Plan commenced in 1974, the proposed investment programme would, it was assessed, enable IR to carry about 245-250 million tonnes of freight by 1978/79. Conversely, this meant that if IR were to be called upon to handle about 250 million tonnes of freight traffic in the last year (1978/79) of the Plan and if the. projected growth of passenger traffic as well as original demands of replaceL ment/renewal of assets were to be fully catered to, an investment programme to the tune of Rs.23,5 billion or so would be necessary. Subsequent events proved the correct- ness of this assessment in as much as, when IR's Fifth Five Year Plan was finalized in 1976, an outlay of about Rs.22 billion was approved with the target of handling freight traffic being retained as 250 million tonnes but with reduction affected in the target of passenger traffic as well as of the replacement/renewal progranTne. 2.06 The Project was appraised by a Bank Mission in March/ April 1975 and negotiations were hold in June/July 1975. During negotiations the following covenants were agreed u-,Cn between the Bank and IR: a) IR to maintain passeng,!r fares and freight rates and take all other action as may be necessary or .25 appropriate to generate net revcnuos sufficient to meet all operating expenses in each of the two years 1975/76 and 1976/77, and to pay dividend on Capital- at-Charge, to the extent of SS% in respect of fiscal year 1975/76 and 100% in respect of fiscal year 1976/77. b) IR to appropriate to the Depreciation Reserve Fund an amount not less than ft.6,500 million in the aggregate for the fiscal years 1974/75 through 1978/79 and not less than Rs.1300 million for any of the fiscal years 1976/77 through 1978/79. 2,07 Credit 582 IN was signed on August 26, .1975 for an amount of US $ 110 million equivalent on standard IDA terms for meeting a part of IR's foreign exchange requirements for manufacture and maintenance of native power and rolling stock as well as track works, electrification schemes, signalling and telecommunications works etc. - 26 - More specifically, the items to be financed under the Credit consisted of (a) complete pieces of machinery and equipment ready for use on IR; (b) assemblies or componants to be incorporated in the manufacture of locomotives, rolling stock and equipment in Indi.- (c) materials, principally steel, to be used by IR or its contractors in India for producing rolling stock and railway equipmenty and (d) necessary spare parts for maintenance of locomotives and rolling stock. The procurement was to be arranged through International Competitive Bidding in accordance with Bank guidolines except for (a) proprietary items which IR procures from particular sources because of the need for procure- ment under licence or for continued standardisation of equipment; (b) non-ferrous metals; and (c) contracts of US $ 50,000 equivalent or less, where the advantage of ICB would be clearly out- weighed by the administrative burden involved. The proprietary items mentioned above were limited to US $ 20 million equivalent or to 18,21Yo of the Credit, Disbursements under the Project were expected to be completed by March 31, 1977, but in order to allow time for possible late payments, the closing date was scheduled as September 30s 1977. The Credit became effective from October lo, 1975. - 27 - III, ROJECT IMPLEMENTATION AND COST 3.01 Table 1 is the list of principal items included in the Thirteenth Railway Credit Project, Appraisal estimates in respect of those items, including investments and physical targets, together with the actual performance during the Project period (1975/76 through 1976/77) are also indicated in the Table. 3,02 The Project could not be completed on schedule and extension of one year was sought by IR and agreed to by Association. The main reasons which led to this situation were the following: a) The Project was, as stated earlier, the investment programme of TR for the years 1975/76 and 1976/77, Due to severe constraints on resources in the national economy, particularly in the context of steep inflation caused by the energy crisis, IR' s actual investment programme was considerably lower than the appraisal estimates (Table 2). Despite the fact that the level of actual investments during 1975/76 was higher than the appraisal estimates, on the combined basis, actual invest- ments in the two year period ware less than the appraisal estimates as indicated below: (Rupees in Million) Year Investment Proararrmna Appraisal Actual Variation Estimates. Investments. 1 2 3 4 1975-.76 3180 3927 (+) 747 1976-77 4500 3316 (-)1184 Total 7680 7243 (-) 437 - 28 (b) With the reduction in the overall invest- ment programme during 1976/77, investments for production of motive power and rolling stock in that year also came dbwn (Table 2*) fcom Rs.2100 million to Rs.1976 million. This resulted in lesser production of locomotives and Electric Multiple Units vis-a-vis the appraisal estimates (see Table 4). Against the appraisal estimates of production of 210 locomotives and 200 Electric MultiplejLnits (EMUs), actual production is 152 locomotivos and 89 EMUs. 3.03 So far as the overall picture of production of motive power and rolling stock is concerned,.the summarized position was as under: Item Production during the Pro lect Period 1975-76 s 1976-77 : Total Aprai- Actual: Apprai-: Actuals:Apprai.:Actua. sal a : sal s asal :ls. E-stimatess : Esti-. S :Esti.- : mates : :mates : Locomotives - 140 138 210 152 350 290 Electric 111 103. 200 89 311 192 Multiple Units Coaches 736 884 800 902 1536 1786 Wagons ,. 6000- 12177 14500 11982 20500 24159 Originally,funds had been made available for procurement of only 6000 wagons during 1975/76 but the same were izicreased to prevent adverse repercussions on the wagon- building industry. Procurement of wagons was thus enhanced to about 12000 wagons : year and as such the overall p=ocurement of wagons was about 20% bigher than the appraisal estimates#- Keeping in view-the higher than - anticinated arowth of nasanaaj traffic (son T%ble 71 . - 29 - production of coaches had also to be stopped up. As a result, availability of funds for production of locomotives and EMUs reduced. The major portion of the foreign exchange available under the Credit being f' or locomotives and EMUs, the proceeds of the Credit could not be utilized fully during the Project period. 3.04 Table 12 reflects the estimated and the actual schedule of disbursements. The credit was not disbursed fully by the original closing date (September 30, 1977) but by the extended closing date (September 30, 1978), full disbursement had taken place. 3.05 Reduction in IR's investment programme during the Project period did not, however, undermine IR's capacity 0 and operations adversely despite the fact that the actual traffic growth on the system was higher than anticipated (soo Tables 6 and 7). This was the result of availability of somewhat higher capacity in the system and substantial improvement in the efficiency of the system during the Project period (Table 5). 3.06 So far as the procurement procedures are concerned, Indian Railways fully observed the same as per the Bank guidelines. IR's systems and procedures in this regard are well attuned to these guidolincs, particularly in view of the long history of association of IR with the World Bank ilOndinG programmes in the past 3o years. - 30 - IV. TRAFFM ANDPERATIOMS Freight Traffic.- 4.01 3a;ed on the sectoral targets of production envisaged in the Draft National Five Year Plan 1974/75 1978/79, IR's Draft Fifth Five Year Plan had envisaged handling of about 280 million tonnes of freight traffic in the last year of the Plan (1978/79). Consequent upon the explosion of the international energy crisis and the resultant high rate of inflation, it became evident, early in 1974 that the.National Plan would be required to be reviewed and downward revision of the physical targets for some of the sectors would become necessary. The ge ieral price level obtaining in 1975/76 was already higher by nearly 35% over the level obtaining in the previous year and by 50% as compared to the price level in 1972/73 which was the base adopted for formu- lating the Five Year Plan. 4.02' Keeping the above factors in view and in the light of the actual materialisation of freight traffic during the years 1972/73 through 1974/75, IR, at the time of appraisal of the Project, had estimated that actual growth of freight traffic by the end of the Plan mriod may not be as high as originally anticipated. According to IR's estimates, with which the Bank staff concurred, freight traffic on the Railways was expected to reach a level of only about 250 million tonnes by 1978/79 from a level of less than 200. million tonnes in 1972/73 through 1974/75. In terms of the total workload, this amounted to 166.6 billion net tonne 1ilometres. Subsequently, when IR's Five Year Plan 1974/75 - 1978/79 was finalised in 1976 by the Planning Commissions provision of resources was made corresponding generally to the above target. 4.03 At tho time of Appraisal# freight traffic level was cstim3ted as 210 million tonnes in 1975/76 (144.3 billion NTKs equivalent) and 220 million tonnes in 1976/77 (149.3 billion NMs equivalent) The actual level of freight trzjffic handled by IR (Table 5) turned out to be considf75/76 ably higher.. IR handled 223.3 million tonnes of freight in/ - 31 - (148.2 billion NTKMs equivalent) and 239.1 million tonnes of freight in 1975/77 (156.7 billion NTKMS equivalent), Thus the freight traffic levels actually achieved during the Project period were almost a year ahead of the anticipations. Vassenger Tr1ffic 4.04 During 1973/74, Indian Railways had handled 135.6 billion passenger kilometres. In the Projecta it was envisaged that by 1978/79, IR would be handling about 159.5 billion passenger kilometres or a growth of 3.% per annum. In other words,in 197S/76 and 1976/77, IR were exnected to handle about 145.1 and 149.8 billion passenger kilometres respectively. Against this, the actual passenger traffic handled by IR during these years (Tables 7) was 148.8 and 163.8 billion passenger kilometres respectively. In other words, by 1976/77, passenger traffic growth had exceeded the Project target for 1978-79. Operations 4.05 For IR's operations, the Project period covering the years 1975/76 and 197L/77 turned out to be one of the best and there was all-round improvement in the onerating performance of the system as judged by the well-recognized indices of operationalefficiency (Table 5). The Project period was an era of trouble free industrial relations when productivity of Railwaymen was at a high level. 4.06 At the time of the appraisal of the Project, ZR had drawn up an Action Plan for bringing about improvement in the turn-round time o. freight cars. This Plan had envisagcd that against the actual turn-round of 15.0 days in 1973/74 and 14.5 days in 1974/75 on 30, turn-round time would be improved to 13.5-14.0 days in 1975/76 and 13.0-13.5 days in 197f/77. SimiPrly, the turn-round time on the MG was expect-d to improve to 11.0-11.5 days in 1975/75 and 10.5-11.0 days in 1976/77 from 12.5 days in 1973/74 and 12.0 days in 1974/75. Against the above expecta- tions, the actual turn-round achieved was as under:- - 32 - TURN ROUN,0F WAGONS iL1n Days) 1973/74 1974/75 1975/75 1975/77 (Actual) (Actual) Expecta- Actual Expecta- Actual tions tions. Broad Gauge 15.0 14.5 13.5-14.0 13.5 13.0-13.5 13.0 Metre Gauge 12.5 12.0 11.0-11.5 11.5 10.5-11.0 11.1 4.07 Many of the steps proposed to be taken by IR and others in the Action Plan for ac-ieving better turn-round were imple- mented. These included provision of additional facilitiem in collieries to facilitate loading of coal in block rakes, mechanisation of handling arrangements in respect of coal traffic for bulk consumers, establishment of specific linkages for movement of coal between collieries and major consumers, increased movement of various commodities in block rakes and expansion of dieselisation/electtification programme etc. 4.08 There was a general improvement in the availability of motive power and rolling stock dring the Project period (Table 5) The mobility of the system as judged by the indicator of wagon kilometres per wagon day improved on BG fr-xm 70.3 in 1974/75 to 76.8 in 1975/76 and 81.1 in 1976/77. Similarly, on the MG, this figure improved from 53.7 in 1974/75 to 56.4 in 1975/76 and 58.1 in 1976/77. The improvement in the utilization of locomotives gets reflected by the figure of Engine Kilonetres per day per engine in use which improved on the BG from F 2/408 in 1974/75 in respect of diesel/electric locomotive used on passenger services to 721/697 respectively in 1976/77. in respect of freight services too, ti- improvement registered was 379/445 for diesel/electric locomotives in 1976/77 as compared to 305/296 in 1974/75. Remarkable improve- ment was also registered in respect of Net Ton Kilometres per wagon per day which improved on BG from 867 in 1973/74 to 1019 in 1976/77 and on the MG from 482 in 1973/74 to 570 in 1976/77. Similar improvements were registered in other efficiency indices (Ttble 5) - 33 - V. PINANCIAL PERFqRMANCE 5.01 Table 8 reflects IR's Revenue 'and Expenditure Accounts over the years. AcCording to the Project estieatas, it was anticipated that IR would generate a net surplus of he* 220 million in 1975/76 and Rs. 148 million in 1976/77 aggregating to a net surplus of R. 378 million during the Project period. Although there was a substantial increase of R.-961 million in the gross operating revenue over the Project anticipations for 1975/76, the same was more-than offset by the much higher increase in the total working expenses aggregating to Rs. 1721 million due to several developments like retroactive sanction of additional dearness allowance to staff and increase in the prices of fuel and other materials. After providing for the dividend on Capital-at-Charge, the year 1975/76 ended with a deficit of R. 611 million. This picture changed completely during 1976/77 when, after making full payment of the dividend, there was a net surplus of fto 872 million in that year. Increases in the freight rates effected during this year contributed towards this higher than anticipated surplus. On the combined basis, IR registered a not surplus of b. 261 million against the appraisal estimates of Rs. 378 million during the Project period comprising two years 1975/75 and 1976/77, 5.02 The Project had envisaged an Operating Ratio of 85.6 in 1975/76 and 86.0 in 197../77. In view of the circumstances explained above, the actual Operating Ratio achieved by IR was 91.1 in 197S/75 and 34.4 in 1976/77. The latter was an improvement over the appraisal estitratcs. - 34 - 5.03 Tw improvcTent in the situation became possible as a result of measures taken to increase tariffs and revenue as well as by reducing costs. So far as the tariff increase is concerned, subistantial hikes were made by IR both during 1975/76 and in 1975/77 in freight rates. 3h the past, IR's tariff policy tended to subsidize certain segments of freight (essential basic commodities) * The freight rate increases effected in these years represented a distinct step towards cost- -based tariffs. Earlier, due to social reasons, rail transport of foodgrains traffic was undertaken at a highly subsidized rate. Similar was the case in respect of iron ore and manganese ore traffic meant for export. Tariffs for these commodities were raisea in 1975/76 which brought the transport of these commodities closer to actual costs. Again in 1975/77, in order to make freight rates more cost-oriented, supplementary charges were increased by 5% of wagon load traffic moving upto 500 kms. Beyond 500 kns, the hike at 10% was steeper as the telescopic structure of freight rates often resulted in costs not being covered, A similar hile of 10% was applied in respect of freight moving in less than wagon loads. A few agricultural commodities were, however, exempted. Soo4 The Credit Agreement had two Covenants, one relating to paymant of dividend on the Capital-at-Charge and the other in respect of appropriation to the Depreciation Reserve rund. So far as the former is concerned, the Covenant had stipulated that Indian - 35 - Railways would pay, out of their internally generated resources, 85% of the dividend payable in respect of the year 1975/76 and 100% tf the dividend payable in respect of the year 1976/77. While the actual payment of the dividend in respect of 1976/77 was in accordance with stipulation of the Covenant, that in respect of 1975/76 was marginally less. After adjustment for the dearness allowance (cost of living allowance applied to wages) attributable to that year but awarded and paid in subse- quent year, IR had met the liability to the extent of 84% against 85% stipulated. This marginal shortfall has to be viewed in the context of the fact that in 1974/75, IR's net revenue had covered payment of dividend only to theextent of 45e% against the 70% stipulated in the Twelfth Credit Project. The period 1973/74 to 1975/77 was particu- larly difficult for IR and the extent of recovery in financial performance is commndable. It is worth noting that over most of the 25 years period upto early 1970s, IR was able to maintain its operating ratio around 80% which compares favourably with other Railway Systems in the world many of which are exempt from taxes (which Indian Railways are not) and yet fail to cover depreciation, let alone earn net income from which to pay dividend to the treasury. The manner in which IR recovered from the difficulties it was facing a few years back is an indicator of IR's management capability as well as the commitment of the Government of India to maintain the financial soundne3s of IR. - 36 - 5.05 The second Covenant relating to appropriation to the Depreciation Reserve Fund of the IR had stipulated that tha same should not be less than Rse 6500 million in the aggregate during the fiscal years 1974/75 through 197$/79 and should not be less than Rs. 1300 million for any of the fiscal years 1976/77 through 1978/79. IR has fully complied with this stipulation as will be seen from the following amount of appropriation to the Depreciation Reserve Fund in the different yearss- Appropriation to Depreciation Yeaz Reserve Fund. 0Ps. in million) 1974/75 1150 1975/76 1150 1976/77 1350 1977/78 1400 1978/79 (Revised Estimate) 1450 Total 6500 - 37 - Vlo INST1=UTIOAL DEVELOPMNT 6.01 IR is Asia's largest single undertaking with an invest& ment of nearly ft. 62 billion and a total staff strength of about 1.7 million. There are 9 Zonal Railways, each of which is under the control of a General Manager# and each Zone is a large system on its own account. IR also has 3 factories engaged in the manufacture of locomotives and rollingstock. 6.02 ZR network is owned and managed by the Government of Indi.;. Its operations are controlled and directed by a Board of five Members headed by a Chairman, who is ex-officio a Principal* Secretary to the Government of India, reporting to the Minister of Railways. One Board.t=se, the Financial Commissioneras discretionary powers to report directly to the Minister of Finance in financial matters. The Board, therefore, performs the dual functions of a Secretatiat to the Ministry of Railways and of an executive body responsible for railway operations. The quality o the XR management cadres is high and their knotlbdge of manage- ment techniques and modern railway technology is very good. 6.03 One of the objectives of IDA Projects in developing countries is to encourage the development of institutions in the borrowing countries/organizations. Earlier credits extended by Association to IR had incorporated similar objectives. Agreements under Credits 280-IN and 448-IN required IR to prepare and keep uptodate Corporate Plan. Similarly, Agreements under Credit 280vlN required IR to ensure that the methodology for appraisal of investment projects would continue to be progressively improved. Agreements under Credit 280-IN also required that the content of a time-table and plan o. action for the establishment of a framework for future Bank participation in the trans'oort sector would be worked out by Government of India on the basis of full review ce the transport sector. All these agreements helped the Government of India and 1R to strengthen their institutional framework in the matters of planning, investment appraisal, development of integrated transport policy etc. - 38 - 6.o4 The planning, evaluation and project sanctioning system applied by IR is defined in various rail%ay codes and policy directives. Railways' internal planning is mainly Andertaken for preparation of annual investment and works progranmes. According to the system followed by IR, no project costing more than Rs. 0.5 million (US $ 65,000 equivalent) can be sanctioned by the Railway Board and included in the Annual Programme without a detailed project study based on a comprehensive techno- economic survey. Comprehensive economic studies are - also undertaken for major new schemes of gauge conver- sions, electrification and construction and new lines etc. Increasing emphasis is being laid on further development of project evaluation techniques, data-base, and evaluation of alternatives 6.05 The Corporate Planning exercise of the IR, initiated under Credit 280-IN, resulted in preparation of a draft Corporate Plan byfS4mer. 1973. The Corporate Plan for the total railway &ystem, consolidating Corporate Plans of the individual Zonal Railways on which it was based, was finalised by J%te -. 1976. IR's Corporate Plan outlines the proposed development strategy during the period 1975/76 to 1988-89 and covers passenger and freight traffic, traction and rolling stock, line capacity, yards and terminals, workshops and production units, research and development, management and manpower and financial aspects. The Corporate Plan is currently being updated to cover the period upto 1992-93 and forms the underlying framework for the modernisation efforts of IR which the Association is supporting. - 39 - 1. qN[gC R,Z-EVLUItTIN 7.1 The Econ-mic Appraisal of the investment programme of IR for the fiva-year period from 1974/75 to 1978/79 had been carried out by comparing three alternatives vizi a) To undertake th, revised investment programma to meet the anticipatcd demand for traffic, b) To undertake investments in essential replacements only, the excass demand over present capacity being met by road transportj and c) no railway investments. 7.2 The volume of proposed invostment as estimated at the time of appraisal and the actual investment, broken up into 'new' investment and 'on replacomnt account' is as shown below: (Rupees in Million) INVES TME N TS Appraisal Estimates Actuals New Repla- Total New Repla- Total Year invest- cement Invest- cement ment ment 1974-75 1970 1380 335o 2342 1125 3467 1975-76 1740 1440 3190 2681 1246 3927 1975-77 2900 1600. 4500 2064 1252 3316 1977-7S 3950 1550 5500 3014 1176 4190 1973-79 5340 1630 6970 3835 1539 5374 Total 15900 7600 23500 13935 5338 20274 With the proposed invnstment a total capacity fir 155.5 billion net tonne kilometres of freight tr3f!ic and 159.5 billion passengar kilometres was Oxrecttd to be created. The actual investment was, --wavars less to the extnt of Rs. 3225 million. - 40 - The estimated traffic re,.-alisati3n f.r the year 1973/79 was also lower ti-in th forecast fnr freight being 154.4 billion net tonne kilmetres and higher for passenger traffic at an estimated 137.3 billion passenger kilometres, For the purpose of the present economic re-evaluation, the actual trzffic materialisa- tion has been taken to represent the ca-acity created in the system by the investments made. 7.3 The re-evaluation has been done by following the same methodology as adopted in the 13th A7praisal Report with some modifications of the cost norms as indicated below:- As in the As adopted for Ao;railsal re-evaluation Rail, ooeratina cost i) Per net tonne kilometre 4.28 paise 4.5 paise ii) Per passenger kilometre 2.6 paise 2.G paise Road capital cost i) Road c-)nstruction Rse 1,000,000/km rs.1,2000O/km ii) Cost of truck RS. 50,000 s. 82,700 iii) Cost of bus FS.80,000 ft.132,000 Road operating cost i) Cost of road maintenance Ps. 9500/km Rs. 11400/km ii) Operating cost per net tonne kilometre 10.10 paise 10.80 paise iii) Operating cost per passenger kilometre 3.62 paise 3.90 paise The figures adopted for the re-evaluation are based on the 1977/78 prices. The operating performances for road transnort, the road traffic densities etc. as adopted at the ti...e o'f the appraisal have been retained. - 41 - No credit for salvage is taken for any of the assets. 7.4 The cash flows under the three alternatives a), b) and c) are presented in Table 14. Comparing the alternative (a) i.e. investment already made with the alternative (c) of 'no investment on Railways', the return works out to 18% against the anticipated return in the appraisal of 20% thus showing that the anticipations have largely been fulfilled. Compared to the alternative of making only replacemant investments, i.e. (b), the project undertaken shows a return of about 14% which is somewhat lower than that expected at the appraisal stage. Lastly, comparing the twa hypothetical alternatives viz. of 'no investment at all' with 'investment on replacement only' (b and c), the return is seen to be about 21 against 24% in the aprraisal. Thus, the variations between the appraisal estimates and the re-evaluation estimates am marginal. - 42 - VII . THE ROLOF ASSOCATICIRAND CO-CLUSIONS 8.01 IR's association with the World Bank Group extends over 30 years. Over the years, significant contribution has been made towards the develo-ment of IR system by the assistance provided by loans and credits given by the Bank Group. The Thirteenth Railway Project carried this process further and succeeded fully in its objective of enabling IR to handle increased quantum of traffic by creation of additional capacity through inputs of motive power and rolling stock, line capacity and other capacity-generating schemes. It also helped IR to maintain its assets in good fettle which helped in improving the efficiency of the system. 8.02 After the Thirteenth Railway Project had been prepared and appraised by the Association, the same was implemented by IR. During the implementation stage on account of lower level of investment approved by Government of India during 1975/77 than what was envi- saged at the time of appraisal, reduction in the physical programme of production of locomotives and Electric Multiple Units had to be made. This did not, however, impede IR's capacity for handling traffic substantially. In fact due to significant improvement in the utilization of motive power and rolling stock etc. IR handled c.nsiderably higher traffic than was envisaged at the time of appraisal.(Tble 6 & 7). - 43 - 8.03 The period 1973/1976 was a difficult one for .R's financee. With a very high rate of inflation resulting from the international energy crisis, IR's finances were put under severe strain.With tinely tariff increases and economy measures adopted, IR staged magnificient recovery in 1976/77 and was able to discharge obligations of payment of dividend on Capital-at-Charge to Government of India as per Credit Covenant. Earlier in 1975/76, despite the severe strain on financep IR met this obligation to the extent of 84% against the stipulated 85% * The Covenant relating to appropriation to Depreciation Res-rve Fund was fully honoured by.IR. 8.04 During the implementation of the Project, several Bank Missions visited IR and provided valuable help and guidance to. IR staff. Probleme relating to procurement of materials, components and parts etc were mutually discussed and.resolved during these Missions. Similar help was provided by the Association staff in respect of other problem areas. In fact, along with the supervision, Sank issions successfully identified several areas in IR operations which needed requisite attention. Modernization of the motive power and wLkshops and maintenance methods were defined by the SOeral Mission which visitod India as areas 44 where the Associatinn could play significant role and help IR. Modernization and improvement of maintenance and manufacture of locomotives and rolling stock in order to reduce the cost of maintenance and manufacture as well as to improve their performance were identified as objectives to be achieved by IR which led to IR and Association taking up the next Project termed aRailway Modernization and Maintenance Project" in 1978. 8.OS IR has an ambitious programme of development in the next few years in order to equip itself to handle very heavy increases in freight and passenger traffic anticipated* The Association h3s been playing an active role in promoting rnd supplementing IR's developmental efforts which can be fruitfully continued in future also. -45 - jpril* '7g 7able I INDIA rPffmi Di T ~1LT fiOi ~E pChT PRICIPAL ITEMS INCLDD IN THE PR27E : Eatimatess (During :ag . t= *m $1975-76 t I T C (q 1975-76 &3& 1976-77) :1976-77 a (> 8 (A) 8 u5A A. TQTAL INVETMN' (Ro. -in Million) 7680 7243 94 1. LOCOMOm'jVE & ROLLIM SToCK a) znvestmant (Ra. in million) 3292.5 3982 91 b) Production Dlesel Electric . G Min Line 163 141 86 bo Mun Line 24 10 42 Diesel Hydraulic BG - Shunter 21 21 100 NG - Min Line 20 20 100 Electric Locomotves 122 98 80 Total (Locomotives) 350 290 83 ii) Electric Muitiple Units (Ei7s) 311 192 62 iii) C*aches 1536 1,1a6 116 iv) Wägons (In terms of 4.wheelers) 20,500 24,159 118 2. Workshons & Sheds Investment (Rs. in millions) 355.4 227 64 3. Plant & Machiner Investimnt (Rs.iIn mllliong) 152.7 189 124 4. Track workr Bridges and Ejectricaj a) Investment (Rs. in millions) 2094.9 2078 99 b) Rail Renewals (Km.) 2050 1535 75 c) Seener Renewals (ms.) 2700 2308 86 d) Double Tracking (X=s.) 450 288 64 - 46 - Agril, 1979 Table I __See (contd. INMIA THRTEENTH RAILWAY PROTECT PRINCIAL ITEMS INCUDED IN THE PROJECT tAppraisaltActualss saercent- t Estimates: ( ?or iage tsduring :1975-76 &s s1975-76 &i1976-77) 2 u1976-77 t a A) a (B) a (B/A) 5. Signalling & Telecommunication Investment (b. in millions) 285.7 296 104 6. Electrification a) Investment (fb. in millions) 463.9 367 79 b) Energization (Route Kms.) 329 272 83 7. New Lines a) Inivestment (lb. in millions) 364.2 390 107 b) Physical Progress (Kms.) 300 345 115 8. Other Works, Services and Inventories Investment (ft. in millions) 463,4 (-)452 9. ftaff Welfare & guarters Investment (fb. in millions) 207.3 1166 80 . . . .April, 1979 POJECT Cur1PLETIIN RtEPURT 13th Railw mtoe .1L OR_. In millions) 1974-75 1975-76 197 Proramrne uProramme ptual Prgram Actual Plan head Current Real Current Real Current Real Current Real Current Real Current Real Prices Prices prices Prices Prices Prices Prices Prices Prices Prices Price Price$ 1. Rollinq Stock 1590 1178 742 1157 1230 818 2006 1347 2100 128 1976 1300 2. Machinery & Plant 70 52 69 46 75 51 103 69 80 49 86 56 3. Track Renewals 305 226 311 207 330 222 350 235 350 214 345 227 4, Bridge Works 70 52 65 43 70 47 74 so 100 61 94 62 5. New Lines 190 141 188 125 190 128 192 129 180 110 198 130 5. Electrification 230 170 220 146 200 135 202 136. 270 165 165 108 7. Workshops & Sheds 90 67 64 42 150 101 112 75. 210 129 115 70 8. Line Cap3city Worko50 374 566 376 540 364 524 352 650 398 596 392 9. Signalling & Safety 130 96 134 89 140 94 151 101 150 92 -145 96 LO. Staff ;gozrters 40 30 42 28 60 40 42 28 00 49 66 43 Ll. Staff Vsl f are 30 22 27 18 30 20 28 19 40 24 30 20 L2. Other Electrical .: Works 40 30 41 27 45 30 47 32 40 24 48 32 3. Other bpecifled Works 20 15 24 16 20 13 24 16 40 24 23 '1S 14. Users' hmnities 30 22 22 15 30 20 36 24 40 24 39 25 LS. Investment in Road Services 30 22 27 18 100 67 100 67' 70 42 96 63 6. Inventorios (64 20 (*) i-(4-... - -. 70 47f-) 443 10, -1* total 3350 2482 3467 2303 3180. 2197 3927 2637 4500 2753 3315 2181 Indian Railways Investment Programme during 1974-79 was prepared on the basis of 1972-73 prices. Real prices have been vorked out adopting the same as the bases fts.0 In n. t 11-3 S) 77-781779 Tota 1 I- ae ttual _PragrammleA a Cuanthea RaCurrent Real Current Rea urrent Real Current Real tu Plan hel Prices Prices ftices Prices Prices Prices Prices PricesPrices Prices Prices P.. tem 1. Rolling Stock 2400 1333 2131 1333 2680 1354 2353 1384 1000o 5969 10208 5521 2. Machinery & Plant 80 44 68 42 95 48 78 45 400 244 404 259 3. Track Renewals 410 228 415 210 455 230 510 300 1850 1120 1932 1229 4. Bridge Warks 150 83 97 60 160 81 115 68 550 324 446 283 5. New Lines 200 111 224 140 240 121 317 187 1000 611 1119 711 6. Electrification 270 150 202 127 230 116 209 123 1200 736 998 640 7. Workshops & Sheds 250 139 129 81 300 152 240 141 1000 588 560 415 8. Line Capacity WorksIE0 556 580 , 364 1905 962 771 453 4600 2554 3039 1937 9. Signalling & Safety250 139 142 90: 330 167 187 110 1000 588 759 485 10. Staff ;uarters 100 56 76 48 120 61 99 58 400 236 325 205 11. Staff Wlfare 50 28 100 52 so 25 91 54 200 119 276 173 o 12. Other Elec. Works 40 22 35 22 35 18 62 37 200 124 233 ISO 13. Other SpecifiedWarks5o 28 28 18 70 35 18 11 200 115 117 75 14, Users' Amenities so 28 41 25 50 25 40 23 200 119 178 112 15. Investment in Road Services so 28 102 63 50 25 251 153 300 185 585 354 16. Inventories ISO 83 (-)103 (-)115 200 101 22 13 500 277 (-) 1005-) 659 Total 5500 3056 4190 2620 6970 3521 5374 3161 23500 14009 20274 12902 Indian Railways Investment Programme during 1974-79 was prepared n the basis of 1972-73 prtces. Real prices have been worked out adopting the same as the base. O L~ - 49 - PROJECT COMPUTION RPORT TABLE 3 THIRTEENTH RiIL,UY PROJECT April, 1979 Allocation of Public Investmonts by Modes of Transport# Fourth (1969-70 to 1973-74 and Fifth Plans (1974-75 to 1978-79) Transport Sub- Sector Fourth Plan Fifth Plan 1969-70 to 1973-74 1974-75 to 1978-79 (ctual) N.-billion b.billion % Tentative Finalised Railways 14*2 46o1 23.5 21.5 39.5 Highways and Road 9.7 31.5 20.6 18.1 33.3 Transport Ports, Inland Waterways 2.5 8.4 4.1 6.4 11.8 (ncl. Light Houses) Shipping 2.4 7.8 2.6 4.5 8.3 eaviation, iirports 1.9 6.2 3e9 3o4 6.2 Pipelines Metropolitan Area (Transport) 2/ 2.0 0.5 0.9 Total for Transport 30.8 100.0 56.7 54,4 100.0 Total Plan 167*7 371.6 392.9 1/ Included under the Industrial Sector. / Metropolitan Area Transport Systems were in the Fourth Plan included in the investment programs for rails and highuays. PR 03Et COMPLT %EII THIRTEENTH RAILWAY PROJECT aari 79 PRODUCTION PROGRAME O LOCOMOTIVES AND ROLLTNA STOCK UNDER IR'sa INVBSTMENT PROGRAMME 197/75 - 1978/79 Production Programe in number ManufacturersManlufac.TYPe of"s 1974-75 : 1975-76 1976-77 1977-78 2 1978-79 * Total turing astock '--..s-- ----------- -------------------------- -------s------------- Dieselg Loost .ocmotives- $capacity'S : :s mtvWok, jaDel M4 8 2 63 67 100 74 11 91- 11 91 47a 9 Iaa a 150 No. S " 5 5 4 a 20 10 3 0 12 V 1 1004 per year s h 2 2 4 4 32 2 Total 164 16 1018 20 52" 20 18 24o 17 990 80 Private------000--11500 -----.12177- 1 4500 18000 21000 710005928 Buldr Iswheelers Diesel Loco- vh.Locontives motive Works, oc Diesel N/L 80 72 63 67 100 74 110 91 117 91 470 395 15aratar 350 L .M.U 15 4 - 20 10 30 12 31 7 100 44 chittaranjan 50IR (M - - 13 a 7 12 - - - - 20 20 Locomotive esel shunters 23 23 4 9 17 12 24 24 32 23 100 91 works -doo8 Electric 46 46 56 54 66 44 66 53 66 56 300 253 Total 164 156 140 138 210 152 230 180 246 177 990 803 Private 22,000 11500 '( .12177 14500 18000 21000 71000 59283 Wagon 2. wagons 1(958 6000 .11982 12166 12000 Builders 4-wheelers Integral 75CY3. Passenger Coach vehicles Factory 1qt Coaches . 859 886 736 884 SGW 902 1000 091. 1205 99*~ 4600 4562 BhrtEarth 350 ZIMIUG. 201 207 111 103 200 89 250 Il1 288 76 1050 56 Jessops, 300 Calcutta. - 51 - April '79 ' ~OJCT C0MEmTION REWORT TABME 5 TEIRT=ETU RAIå.AY P2J-0T Summary of Oporating Statistics 77-78 78-79 BROAD GAUGE - Apr.to Dec. 73--74 74-75 75-76 76-77 77-78 77-7ö 7b-79 1 2 3 4 5 6 7 8 1. Peroontagc of servicc- abla locomotIvosM() . . . Stoam 84.91 84.32 85.63 86.61 85.88 85.90 84.70 iesol 84.44 82.26 82.93 82.92 83.15 82.80 84.40 - Elaotrie . 80.78 78.77 79.95 79.40 81.46 80.17 80.07 2.Porontago of service- 86.55 84.02 84.29 87.26 86.59 86.80 86.70 able passenger 3.Percontaga of servico- 95.64 95.52 95.59 96.01 96.02 96.20 '95.52 able wagons 4.zngine - km por day por engine in use(Km) Passonger Stoam 238 236' 238 233 228 228 217 Diesel 694 652 641 721 748 743 657 31ectrio 408 408 450 697 684 637 517 Froight Stoam 108 112 114 114 111 111 100 Diesel 307 306 321 379 363 355 327 Elootric 372 296 331 445 421 390 362 5, Gross trailing iad 1528 1563 1577 1607 1638 1685 1525 pe or oight.tra.n ton) 6.Not tonnage por 745 778 782 796 818 896 912 fraight train(ton) 7.7agon km. per day 67.2 70.3 .76,8 81,1 81.9 83.3 7507 por wagon 89Not ton 837 907 982 1019 1045 1167• 1080% Km per wnSon pcr day 9@Gross ton km par 2602t 26756 27663 30222 3024 31814 31978 froight-traln hour -52 - &_Tio 5(contd.) 10.Net ton- km por 13966 14599 1501 16292 16417 I-045 18232 froiGht-train hour 11.2orcntage of passeer trains arrivtng on 79.47 82.1 86.5 93.2 91.3 87.4 81.8 t±me(%) 12.Avorag ',agn 17.9 18..9 189 1 9 19.0 21.1 2 1.0 load(ton) 13.Looomotivo Utilization( %). - - Stcam 47.9 46.7 48,3 45.8 47.9 48.ý7 46.59 DiGsel 75,0 •76.7 89.0 80.Q 80.0 79.6_4 76.87 Electrie 67,5 72.1 76.3 79.6 80.8 79.69 77.39 All teaction 54.2 56.7 55.4 57.9 50,39 56.86 14.Avorage speed of all 3 froight trains(km/h) . . . Stoam 11.8 12.0 11.8 11.9 11.5 11.6 11.2 m.sol 22.2 22.1 22,1 23.1 22.3 22.3 21.7 .a.lotrio 22.5 22.4 23.5 25.2 24.8 25.0 23.2 Ali traction 18.3 18.4 18.8 20.1 19.7 19.7 19.6 15.Avoraga speod ot through freight trains(k/h). . Stoam 15.6 15.8 15.9 16.8 16.3 16.4 15*7 maosol 22.. 22.3 22.3 23.3 22.5 22.5 22.0 Elactrie 22.6 22.5 23.1 25.4 24.9 25.1 23.9 -. AlU traction 21.1 21.0 21.6 23.2 22.5 22.6. 22.01 16.Avorago lead of 635 ogfrighti I30 17.lagon turnround(daya) 15.0 14.6 1395 13.0 13.3 13.4 14.4 - 53 - . April '79 PROJCT COMPLMON. REPORT TA CC THIRTERTTH RAIL'-!AY PROJZCT Summary of Operating Statistics METRE GAUGE * - A r. to Boc. 73-74 74-75 75-7b 76-77 77-3 77--76 70-79 1 2 3 4 5 6 7 8 -- - W. ".Soo- - -- - - - -- - - - - i. Percentage of service- able * locomotives () Steam 85.28 85.28 84.45 86.37 86.39 86.4 81.8 Diesel 87.71 86.55 88.33 88.58 87958 84.9 86.3 Slectric 88.45 87.90 85.00 85.00 85.00 80.4 82.7 2, Percentage of soar . 88.48 87,13 88.45 89.59 90.00 90913 89.50 able passenger voil- cles(f.) 3e Porcontage of service-. 94.98 94.81 95.65 96,00 96.09 96.20 95.52 able wagons 4. Engine - Em per day par ongine in uso(Im) Passenger Steam 214 205 215 215 215 214 208 Diesel 561 5-6 533 578 587 555 574 Electric 375 361 401 439 431 434. 417 Proight - Steam 118 117 120 126 121 123 115 Diesel 259 272 206 344 336 304 288 .leotric 248 232 225 242 211 210 214 5. Gross trailing load 785 800 800 785 800 728 771* per freight train(ton) 6. Net tonna, per frei. 400 422 413 413 423 437 47*t ght traintonne) 7. Tagon - Ku per day 50.9 53.7 56.4 58.1 575 56.7 52.7 per w4gon in use(Im) 3. Not ton Km per wagon 482. 528 545 570 570 583 568 per day - 54 - Table 5 (cont'd.) ----- ----3 - - -- - - - 9. Gross ton km per 11336 11300 11109 11097 11164 11874* 12260. froight-train hour 1O.Net ton km per 6616 6669 6423 6556 6611 1220 1517 freight-train hour 11.Pereontage of passen- 84.44 85.61 88.7 94.1 92.7 91.0 90.3 gor trains arriving -on timo(%) - .. 12.Avorage wagon load 12,7 13.2 13.3 13.6 13.7 14.4 14.6 (ton). 13.Locomotivo * Utilizatiah() . . Steam 38,6 35,6 41.7 41.,3 40.8 41.60 39.12 Diesel 66.3 68.8 74.2 74.6 75.0 72.98 72.40 3lectrio 47.5 45.0 53.3 58.3 61.7 59.01 58.12 * All traction 41.6 39.4 45.4 45.4 45.0 45.55 43.52 14. Average speed of all freight trains (km/h) stean. 12.9 12.5 12.1 12.2 11.9 12.0 11.5 Diesel 19.0 18.7 18.5 19.1 13.8 18,8 18.3 Zlectrio 21,3 22.5 20.0 19.4 16.8 16.6 17.3 All traction 15.5 15.2 14.9 15.2 15.0 15.1 14.9 15.Averago speed of through freight train s(km/h) . . * steam 15.5 14.4 14.1 14.1 13.7 13.8 12.8 Diesel 19.3 19.0 18.0 19.2 19.0 191 18..6 Eleotrio 213 22.5 20.0 19.A 16.8 10.6 11.3 All traction 19,1 17.6 17v3 17.6 174 17.4. 16,9 16.Averago lead of 462 4 4S 45p 47 . N. h. a ton of fright (Kam ) 17.Wagon turnround(days) 12.5 12.0 1196 11,1 11.5 11.3 127 40 - -m- - am .0 - - - - - 55 - April 1979 TABLE G PROJECT COMPLETICH REPORT T7HIRTEENTH RAIL!aY PROJTECT FREIGHT TRAFFIC * . P.ROJECT-PERIOD 1973-74 974-75 1975-76 1976-77 Actuals Actuals X AppraVl Actual APqb1saj Actual Estimates Estimates 1. Tonnes Originating (Milli ons) Revenue Earning sammim 162,1 173.6 190.0 196.8 200.0 212.6 Service 22.8 23.1 20.0 26.5 20.0 26.5 Total 184.9 195.7 210.0 223.3 220.0 239.1 2. Net Tonne Kilometres (Billion) Revenue Earning 109.4 121.4 131.2 134.9 136.3 144.0 Service 13.0 12.9 13.1 13.3 13.0 12.7 Total 122.4 134.3 144.3 148.2 149.2 156.7 ~ 56 - April, 1979 Table 7 PWECT COMPLETION RZPORT TIfCERT.NTH RAILM1Y PReCT MSSENGER TRAFFIC Passengers Passenger Kilometres (Milliongs) (B il lions) Y Appraisal Actuals Appraisal Actuals Bstimates Estimates 1973-74 - 2654 la15s 1974-75 - 2439 - 12613 1975-76 2840 2945 145.1 148.8 1976-77 2933 3300 149.8 163.8 **9O 9* PROLCgCMPF,!LEt jPOR? - mIeTEfmrm L'?-PROJRCT ta Rgm-t. --- 1 Fr.E-rxnBp 19'25:- TIM92-!Q 1975-76 1976-77 i177-79 197q-79 19-20 _ _m__ **pPPJ letoraisa poris tu1 lporatsall eie ~pet On 3S OPER TT 'n'G REVE"I1B 0essen,e 4771 5141 4961 S63 5160 6217 536r 60 55q1 75n5 other conehing, 761 894 793 869 sia 901 956 910 590 956 'oods 1084 11501 112D6 13259 1ifr7 184 1211 139I 13l31 155&3 332 132 3.7 540 :42 63 347 5 352 -99 "167l9 lvenj 17 1707.361 1'm?V 21" 392 162 ~ W "56? Personnel Costa 8283 £739 857' 92% 293 9492 9361 10114 97-2 109f7 rue 1 535 2545 284 9515 99 2656 3091 6' M Other Costs and Stores M45 3399 WIII .i353 3w0 266 3652 .ks767d ToalW.r_..g3lirg 1A 177 3 1490 1405S 16706 1v673 iii-i 151?3 IR ppronrirtion to Doprootatior Rey r-, '0 150 1150 15. 1350 14m jonn 1.50 150 16~0 Pension Vund 1t0 n5 1.0 . -0 -0- 40 --m. no To0..42 lRa2~ 14303 16"9'; 14874 r/2P0 15a13 Ptkuj 1642" 14957 17006 90924 'et nevenue frc Operntion 9406 1658 921 3270 2554 372 9057 2'1 3054 14 Chirres to Revenue of Capital Nature Qpen Line orks 75 68 100 84 120 76 143 103 150 10 Yiscelaneous 'ransnetiont 122 20 132 22 142 19' 152 110 162 170 let, Ravenue 29 1372 2189 63 2"62 3528 2669 82 2Wo 3. MIvidend on Capital at ehqre 1979 1991 Ec41 2091 9150 ~66 2266 mo5 2416 W "et gurplus/%reit 230 -611 148 972 142 1169 396 277 305 Operatine RRtic 86.6 91.1 86.0 84.4 86.0 83.0 44 86.8 94.9 45.0 Rate of Return on capital at Cherse 5.2 3.1 4.8 6.5 4.7 7.4 A.9 5.0 4.8 6.1 - 0 1974-75 1975-76 1976-77 1977..7p 19'7P-79 .99-017- .I prail Oporelsal A- Aop ratsl A- rporasal P- Apor . Offl pr B.e *pr stitm1esttaaate tuelt t a t tituale 1 tt6- n!t to:e met1 cetes *ettublea Ket Revenue from Operations 611 736 939 1370 219 1*63 T9 1R q669 9s99 M946 N 194q 1w' Less Dtvidend on Capltal-at-charge 1051 2032 1979 1991 Mai 9091 q150 2266 9266 b5 Off W10 54 *i10* 1o7 - 140 -W6 7ýi -611 3.-77 4-- j13M! -:;;6 -;R qu qs Contribution to DRP 1177 1177 1177 1178 19m 1379 14% 148 1579 1478 1624 525 70s 749 C4apital vorks charged tc. Revene de 58 75 76 100 94 12> 76 143 103 10 10 Sq a In-rese In 'enston Vnd excludInv Interes-. 76 13 53 b 57 - 5 61 -47 64 5 OR 31 en3 -11 .eoldent Compens-tion, SWfety k Passencer Omenitis Pund - 65 - 74 - 87 - 95 • 93 - 93 - 419 Intere on Puw kalances 169 187 185 232 196 291 212 331 mO 2S ?3 342 lC?G 1519 Raill.-ay rsash Cenerntion 44 94 17.) 954 1779 98 196t 3146 9418 ?79 ,9130 pAa 1.5 1"76 Carital INnds recebred from covt. å053 2121 1725 9*40 2500 1809 3530 2641 4991 34?0 5100 3909 10047 1 å4 7erperry Lcans fron 1,ovt.-RRP 18331 1931 1041 1592 1445 1469 1603 674 159 945 1714 609 7.41 1391 OP 219 219 6- >5 331 • 3.13 - 161 lom- 10 37 4147 4375 4554 5139 6249 6976 7439 0161 9003 70e 94. 7916 3en?n 3 tt1 orsihre to Revenue C? 58 76 76 100 84 1 76 1*3 103 .50 1.3 SR r^ Repla:-enent -eorks DRF 1070 1125 1900 1'06 1300 1252 145D 1176 140 139 1550 1050 G 7 ICI *C a eirced tc DF 167 162 180 163 300 176 g00 I9 • 4% 250 450 ME!0 119m 112 'Jork chnredtc!rc RW - 3 - 14 - 34-65 - 100- 6 IddItions carced to Capital 75 0 Totsil Capttq1 ExpendIture 33W31101 791 40 05 im Rf "76 Wffl WM~ Wj 7I Inrreise/!>ecreice in Inventortes - a) . 54 70 - 441 100 -6,40 150 -1". w0 M3 qq( ?ID -? 06 Reptm,ent of Temporary Lcans Iffip 332 312 943 943 V0 145 0 39 1607 1363 1 15 100 6 451 DIP -0 - - - - Interest on Tempornry Loans - 6 55 49 146 155 191 166 198 176 146 15 17 q0 *;q - 55 --- . 73 7 . .. 54 94 104 6 110 91 "1 1 3799 3914 4340 90 E17 58 7197 6g860 64 8077 7*N io00 1n678 tncrease/De-rease in P~nd Balaneg 349 461 '14 49 51 918 252 2 393 -113 4140 I9ig Openinr. Balanccs 3197 SW13 3535 3 919 43 358 W4S A93 -413 4005 510 15-0 -4qs e c1ingbalinees 3515 3753 3749 3912 3749 4033 3980 >45 '03 841 4615 5ee 295' 393. Inorense/Deerense In pund 3962 39c0 495a 42 54W 46MO M94 m26 892 895 6501 Balances DaV 900 g44 78 34 SI MS 91 390 i 91 12 1*1 €9$ 961 Pension 76 91 77 ge 82 97 89 67 94 125 100 168 -1 "l DF -3 - a - -1g - 2 09 19 10 1 s -10 ap •1 162 - -145 - 500 e - -10 RACF 76 67 89 77 66 84 72 76 36 Pc 3" 7 ery foans Balances 01R1 94 a m 96 m96 2994 3075 1749 309 ti4ol6 3 1885 3274 140 Dr 1302 1302 3379 1525 35D4 1525 1936 1585 37 1579 vm0 57 spl£L M!n~iP9 ROT.AY PRO~?C T.. F'M I '79 (Eci -69z;n xn) 21e st,ntes edstes 410 De.octs 17M ,31 asets 449q5 i74'- 7 i 94 5047 Wf -over-rt lk-ornr jeanslm 643 ?4 6 46 ti~r(~31t7 3535 ??S3 971<9 96 >qf 9% a'>e' asa0 " T~~ n•s-n ia6ifrmGe.394 0* AM 'T1 W"'1 .pital - pencattoe % Coern-ert le*orrn 0a6' Dre,!itton Reserve 9nn •:r59 6R6*9 '0 14 " '5 %9 Dv-.reln-nt 01t 3 16 0 9 p0 Revenue '%35 D7S 'W?? 21/9 M/'5 'M'5 -• "I1 -- .eC1Ien 'orpen at 1i .. img .. 5 . . - ins portion ''ne'ned ?>p 27 ?9??9 49¶64^nh An - 64 * toiepora r ~ oasätron 6 ~ ots._ -f Cerremintion Rserv. 'io 178 195O 19'0 V:6 179 1,VO n744n1 tepemte R lservernd 4 3 166 r 61 6 • bp Dvenoent 3 - 3 - * • 1 M Pensicn 'und 1432 1499 1649 1575 1700 1697 1009 1' 6 1 ecident Cocrsensatiton Pund -. ..'.I ._S8L. ...235. ..32. ....2 . . .. ..22. -2L 3~g7 3535 9753 2740 2969 .'"«> 5q59 PE7å* SAM Current .Labitltti's '910 0 ??1 *MO 9 'e*E ** *0 Total Capita1 & Rese.rves S4041 56809 S7577 WP166 6N10li 6!7'% fi4*@ 4"r'69" - 60 - TAI.: 11 PROJSXT COPLETION !:PORT - THIRTSENTH RAIL*AX PROJ'VT, TR~ FORlIGM EXCHANMGE RIR'DNTS (Us } million) 1975.L76 1976-77 Total Rippral-A ra%i--A ral- a Actuale !al ACtuals a Ea- Actuals timates timatest Itimatest Diesel Locomotives : . Components 7.0 .0 12 8 2 20.7 ) 2 7* 480g:0 12.2 1507 26.2 spares 7.0 80)1. Diesel Hydraulic Locos: Components 1,4 1a8 22 0,4 322 spares 05 )0,-6 104 2. Electric Locomotives : .. Components 7.8 8'2 10,2 ) 18.0 ) 13.1 spares 4.6 5,4 )0A 10,0 ) ulectric Multiple ULts: Component's 3 ) . 4.0 ,5 2-2 Spares 0.4 ) 1 Coaches : G onenta 5, 3o3 60 3,2 n2O 65 Wagons : Components 6.1 ) 49 20.0 10,2 26.1 ) 25,1 spares 0.9 ) 1. ) 2.0 ) Track Works Bridges ard Electrical Works : Components 600 ). 0 3 6.0 ) 162 12;0 ) 1.5 spares 0,2 ) 0,2 0,4) signalling & Telecom, : Components 1 2,2 1,5 0.6 3.0 28 spares 0,2 ) 0*2 0.4 Electrification: Components 2,0 21 0.5 5.0 ) 2 spares 01 * 0,1 02 2) plant & Machinery : 0 Components 2,0 ) 5 55 ) Spares 0,2 )W. 0) Other 3quipment & Stores 2.0 ) 2,2 1.5 ) 2,1 3 ) 43 Non-fermrus Metals 2.0 ) 2.5 ) 4.5 ) Total : 62 . l&2 1543 ID.A Credit 50,8 46,7 79,2 35,.4 130,0 82,1 3Llateral and Govt. sources, 116-1 7j1 13,-1 2,1 2402 9,2 INDIA PROJLPCT Ct.'IMMI Re-,>I TEITENIT.H RAILAY MiCJ3C SCemD C. DIUS--nTS. 1D& Fiscal year and 2uarter Cuulative Diabursements at the end of ^4arter (US clillion eSuivaler.) Appraisal eatimates Lctuals 1975-70 Septezber 30, 1975 10.0 - Decpmler 31,-1975 15.0 5.0 !.rch3 31, 1976 30.8 24.7 June 30, 1976 50.0 38.8 1970-77 .Septe=3ar 30, 1970 70.0 48,5 Leceabor 31,1976 90.0 64.0 Varch 31, 1977 110.0 60.0 June 30, 1977 - 66.8 1977-78 Septomber 30, 1977 - 79.4 Decauber 31, 1977 - 83.7 Farch 31, 1978 93,3 June 30, 1978 - 100.7 197S-19 Septem~ber 1, 1978 .- 110.0 - 62 - ILDI A Table 13 EROJECT CO?IPL&TIONRBPORT TALTOENTH RAILWAY PROJCT Catetorvvi se utili sationi Amount of the Credit Amount of Allocated (US $) Actual Disbursement 1.Components and materials 61,600,000 80t7901459.16 required for the manufac- ture and maintenance of electric locomotives, diesel locomotive, electric multiple units, coaches and wagons 2.3quipment and materials for 12,000,000 1,500,745.65 track renewals, bridge works, line capacity works and elec- trical works 3.3quipment for signalling and 1,400,000 1,668,321.65 telecommunications schemes 4.3quipment and materials for 4,200,000 2,108,126.59 3lectrification schemes S.Plant and machinery 3,300,000 1,158,875.71 6.Other railway equipment and 3,000,000 2,053,058.30 material; technical services approved by the Association 7.Non-ferrous metals 4,500,000 2,915,505.04 8.Items procured under licence 20,000,000 17,804,907.90 or for standardizationgoonsis- ting of: (a) Diesel locomotive components in- cluding rectifiers and control equipment, crank shafts, cylinder head castings turbo-chargers, compressors, fuel booster pumps, pistons (b) Electric locomotive components including air-blast circuit breakers, tap-changers, traction motor components, switchgear, trans- formers, rectifiers, gears, pinions, brake equipment and compressors (a) Electric multiple unit components mainly traction and brake equipment Total 3t110,000.000 $ _110 Q0 - 63 - TAMLE 14 (page 1) PROJECT CCMPLETTC"T REPORT THIRTEETH RAILT-?AY PROJSCT RESULTS OF SCON0MIC EVALUATION Alternative [a): I.R. Investment Prog-amme undertaken during 1974-75 1978-79 ---- --- -- 7 -- --- ---- --- -------------------- Year : Investment....... Operating costs :Total ----------------I--------- ----------------- :Rolling :Infra- :Freight :Pass. 3 :Stock :structure :traffic itraffic I :&others 1 ---------------- -------- ---------------e- - 1974-75 742 2725 3467 1975-76 2006 1921 3927 1976-:77 1976 1340 3316 1977278 2131 2059 4190 1978-79 2353 3021 5 1979-8o 7105 4870 11 1980-Z81 7105 4870 11975 1981-82 7105 4870 11975 1982-83 7105 4870 11975 1983-84 7105 4870 11975 1984Z85 7105 4870 11975 1985-86 7105 4870 11975 1986'87 7105 4870 11975 1987-88 7105 4870 11975 1988-89 7105 4870 11975 1989-90 7105 4870 11975 19902 1 7105 4870 11975 1991-92 7105 4870 11975 1992-93 7105 4870 11975 1993-94 7105 . 4870 11975 1994295 7105 4870 11975 1995-96 7105 4870 11975 1996-97 7105 4C70 11975 1997'98 7105 4870 11975 1998-99 7105 4870 11975 1999-2000 7105 4870 11975 SnIRTMT"TH --RAIL-OlkYX PROJSCT RESUTATS 0!? WColvm'ic WNLUTjov Alternative (b): Investment in IR Replacements made during 1974/1751979/79 Excess Traffic carried by Road Transport (s. in milliosu) -------------------------------------------------------- ~------ ~ ------ ear :_ Raiva oeration to !:ot sTotal 7.ctual ~:._p_ratinq.òost : Investment gi Road iperating Costa . Re* :nvest-.:Frelght:Pass. :Total slnfra- .' main- cPreight t Pass. ,curn :ment :Traff ic:Traf.fics. :structure:Trucks*Buses:tenancesTrans- i Trans.- *Cost ----------------------------------------------- -------.~- 1'2 3 4 56 7 a 9 10 111 1974.75 1125 11--2----- L975-76 1246 1125 .976-77 1252 1312 1246 1977-78 1176 1312 2564 t979-79 1539 1312 1400 2260 241 1979-rjo 6716 3536 10252 33121400 22606511 1980-q1 6716 3536 10252 37 913 2001 13203 981-2 6716 3536 10252 37 913 2001 13203 L983 6716 3536 10252 37 913 2001 13203 -993-M - 6716 3536 10252 37 913 - 2001 13203 .9812-25 6716 3536 10252 37 913 2001 13203 6716 3536 10252 37 913 2001 13203 9q687 6716 3536~ 10252 37 913 2001 13203 997-08 6716 3536 10252 37 913 2001 13203 90-)9 6716 3536 10252 37 913 2001 13 6716 3536 10252 37 913 2001 13203 9 - 6716 3536 10252 37 913 2001 13203 99192 6716 3536 10252 37 . 913 2001 13203 92-93 6716 3536 10252 37 913 2001 13203 993-94 6716 3536 10252 37 913 2001 13203 996;95 6716 3536 10252 37 913 2001 13203 jr 995-96 6716 3536 10252 37 913 2001 13203 L996-:97 . 6716 3536 10252 37 913 2001 13203 199798 6716 3536 10252 37. 913 2001 13203 1998299 6716 3536 10252 37 913 2001 13203 99:9200 6716 3536 10252 37 913 2001 13203 994.ý95 116 536 025237 913 20r 132-03 PROJECT COMPLETION REPORT THIRTEENTH RAILWAY PRQJECT RESULTS OF ECONOMIC EVALUATION (18. in millia) Alternative (c)s No investment in the Railways during 1974/75-19710/79 Excess traffic by Road Transport a Railway operation I Road TianspotL Year 'Freight sPassenger s Invostment I sfod sfjxt-ating costs :Total sTransport tTranFpvrt s:Infra- gTruckss Buses: wain- i Freight: PassengersReciirrent (Operating costs) astruc-I 2 stenancesTrans-i :Trans- scosts a sture a a s sport s a 17 2 3 '4 5 6 7 8 9 10 -------------------- -----------------------------------------------------eeeeeeeeeeeee- 1974-75 1975-76 1976-77 1312 1312 1977-78 1312 1312 1978-79 1312 1400 2260 4972 1979-80 6716 3536 196 116 46 37 913 2001 13561 1980-81 6829 3645 196 116 46 . 39 988 2042 13901 1981-82 7085 3749 196 116 46 43 1064 2083 14380 1?82-83 7195 3718 196 116 46 43 1139 2124 14577 1983-84 7446 3822 196 116 46 45 1215 2165 1505t 1984-85 7552 3924 196 116 46 46 1291 2206 15377 1985-86 7799 4021 196 116 46 48 1366 2247 15839 1986-87 8043 4115 196 116 46 50 1442 2288 1629? 1987-88 8143 4211 196 116 46 52 1517 2329 16610 1988-89 8382 4704 196 1516 2306 54 1593 2370 20721 1989-90 8618 4392 196 232 92 56 1669 2411 17666 1990-01 8851 4478 196 232 92 58 1744 2452 18103 1991-92 9082 4566 196 232 92 59 1820 2493 16540 1992-93 9309 4651 196 232 92 61 1895 2534 18970 M93-94 9534 4731 196 232 92 63 1971 2575 19394 1994-95 9756 4928 196 232 92 65 2037 2616 19932 t 1995-96 9975 5006 196 232 92 67 2122 2657 20341 * 1996-97 10192 5083 196 232 92 69 2198 2698 20769 1997-90 10405 5152 196 232 92 71 2273 2739 21160 1998-99 10749 5336 196 232 92 72 2349 2779 16469 1999-2000 10956 5405 - - - 74 2425 2820 21680 - 66 - TAISE 14 (Page 4) PROJECT-COMPLTM'ON REPORT THIRTEENTH RAIL-AY PROJECT REULTS Of ECOMMIC EVALUATION COMPARI SOIN 0F ALTERIJA=VES (Rs. -in mid.lionl Year : a) - (): a)- (b) (b)-(c) :Cost difference iCost differernce:Cost difference (172. (2) (3)> 4 --- - --------- ------------ 1974.:75 3467 2342 1125 1975.:76 3927 2681 1246 1976 77 2004 752 1252 1977 7å 2878 t 1702 1176 197å~79 ~ 402 (4r 1137 1539 1979'80 () 1586 (J) 1228 (2) 358 198081 (.) 1926 (J) 1228 (Z) 698 1§81 82 ,()2405 (i) 1228 ()1177 1082"83 (Z) 2602 () 1228 (2) 13'4 1983-84 () 3076 () 1228 () 1848 198485 (-:) 3402 () 1228 (4 2174 1985-:86 (J) 3864 () 1228 (-) 2636 1986-87 () 4321 (-) 1228 () 3093 1987i88 () 4635 (-) 1228 (-) 3407 1988s9 - 8746 (-) 4888 (-: 3858 1989.90 (-4 5691 (-) 1228 (- 4463 1990291 () 6128 (i) 1228 (-) 4900 1091i92 () 6565 (i) 1228 (4 5337 1092.93 () 6995 (i) 1228 (-) 5767 199.,94 (Z) 7419 (1 1228 () 6191 t994.95 (-:) 7957 (i) 1228 (-:) 6729 1995Z96 (-)'8372 () 1228 (-) 7144 199697 (-') 785 () 1229 (- 7557 1997-98 () 9185 (4 1228 () 7957 1998199 () 4494 () 1228 ( 3266 1999-2000 (-) 9705 (- 1228 (- 8477 Sconomic Rate of Return 18% 14% 21% -67- ANNEX B INDIA SUPPLEMENT TO PROJECT COM':PLETION REPORT Indian Railways VIII Project Credit 582-IN 1. This supplement to the Project Completion Report (PCR) for Credit 582-IN is submitted in response to questions by OED staff. Issues Raised in PCR on Credits 280-IN and 448-IN 2. Actions initiated by GOB or IDA during the period July 1977 through June 1980 relating to issues raised in Project Performance Audit Report (PPAR) on Credits 280-IN end 448-IN are listed below: (a) PPAR Para 15 - foerations of IR Production Units In conjunction with appraisals of the ongoing Credit 844-IN, IDA undertook a thorough investi- gation of IR's manufacturing units, and found them to be generally efficiently operated, although tooling and manufacturing methods often were dated, and costing systems reflected government budgeting and accounting requirements rather than indnstrial cost accounting. As part of the ongoing Credit 844-IN, tool modernization is being undertaken in the Diesel Locomotive Works and Chittaranjan Locomotive Works, and an industrial costing and management information system for all IR manufacturing units is being established for introduction by 1981. (b) PPAR Para 15 - Wagon Fleet CaDacity The PPAR found that IR's knowledge of the carrying capacity of its freight wagon fleet is not sufficiently detailed for the purpose of sound invezt- ment planning and that improvcmencs in this field would require a complete breakdown of all aspects of freight wagon use for.each commodity group. Such information will become available as part of a real-time operating control system for motive power and rolling stock currently being developed by IR for introduction in about two years. The most important result of availability of such infor- mation on a real time basis, however, will be not better budget or investment planning, but more efficient operational management which is expected to result in reductions in wagon turnaround time of at least 30%, which in turn will reduce demand for additions to the wagon fleet. - 68 - (c) PPAR Para 24 - Uneconomic Lines The PPAR found that IDA had probably made a small contri- bution to the increase of uneconomic lines, instead of being instrumental in their decrease. To the extent Credit 582-IN indirectly has enabled GO and IR to under- take irvestments that could not otherwise be financed, this finding is s7till true. (d) PPAR Para 25 - Locomotive Availability At the time of the PPAR broad gauge locomotive availability was about 84% for diesel and 80% for electric traction. The significance of these figures is not their absolute levels, which are better than most other developing countries' railways, but the fact that electric locomotive availability is significantly lower than diesel. The main reason was the low quality of the insulation material used for the traction motors for electric locomotives produced in IR's Chittaranjan locomotive Works, while traction works used for diesel locomotives manufactured by Bharat Heavy Electricals Ltd., uses insulation material of adequate quality. This problem has now been remedied as reflected by the current (1979/80) availability of 85% for both diesel and electric locomotives. Vurther increases in overall locomotive avail- ability will depend on the introduction of a unit exchange maintenance system, for which IR has requested IDA assistance in the form of a component remanzfacturing plant to be established starting within the next two years. (e) PPAR Paras 33-38 - Transoort Sector Planning With a view to identifying, studying and proposing solutions to a %ariety of issues in the transport sector, a study group in the Planning Commission, assisted by a UNDP-financed expert, and acting as a secretariat for the National Transport Policy Committee over the past two years has prepared a framework for overall transport planning and coordination in India. The work of the study group is contained in the report of the National Transport Policy Committee, which was published in may 1980. (f) PPAR Para 40 - Technica. isistance to IR Bank Group staff is increasingly being supplemented by either specialists or technical experts to advise IR and guide the Bank Group in further leading operations. Such specialists have been used in preparation, appraisal, and supervision of projects dealing with workshop moderniZation, manufacture of wheels and axles, remanufacture of locomotive conponents, maintenance of motive power and rolling stock, electric traction technology, and operations control systems including telecommunications. The Bank expects-to continue to use such expertise on IR projects. -Physizjl Accomolishments 3. Physical accomplishments under the project are shown in Annex A. Credit 582-IN provided foreign exchange support for a time slice of IR investments rather than for specific, discreet projects. Table 4 of the PCR provides details of physical accomplishments in motive power and rolling stock which, combined with spares for maintenance, consumed over 90% of the credit proceeds and for which clear physical production targets were provided at appraisal. Details of physical accomplishments under the project for signalling and telecommunications, other works, services ard inventories, and staff quarters and welfare are not provided, since such schemes (as stated in the appraisal report) are of an incremental and continuous nature for which a percentage of physical implementation vould not be meaningful for a particular time slice. Therefore, the PCR provides the measure of accomplishment in terms of Rupees spent. It would naturally be possible to, for example, extract the exact details of staff quarters, research and development equipment, or channeling equipment for the microwave system, implemented within the time slice, but it is doubtful that such information can be used to determine any impact on IR operations or benefits from such investments for a two or three year time slice. *4. As detailed in Table 13 of the PCR, there was a major reallocation of US$19.2 million to category 1 of Schedule 1 of the Development Credit Agreement for Credit 582-IN for components and material for manufacture and maintenance of rolling stock and motive power. Most of the reallocation was from category 3, the allocation for equipment and material for track rehabilitation,bridge works and other line capacity works. This reallocation took place mainly for two reasons: (i) the need for foreign exchange for the category 3 items was reduced because local production capacity increased more rapidly than expected; and (ii) GOI reduced IR's investment budget. About US$2.2 million of the reallocation to category 1 was from category 8, since some items, such as locomotive pistons, allowed by the Development Credit Agreement to be purchased through negotiated contracts, were bought through ICB. GOI requested the reallocation and extension of the closing date in order to fully utilize the credit. The Association acceded, in recognition of the importance of continuous support of IR's rolling stock and maintenance and manufacture needs and the large increases in the price of imported components. Performance in 1977/78 and After 5. IR performance in 1977/78, and after is shown in Annex B. Action Plan 6. The action plan referred to in the PCR consists of specific steps for achieving better turnaround of motive nower and rolling stock, which, of course, will have the effect of reducing IR investment requirements, j 4 Y a G t t-? i t4 - 5－、 ー／ざー メf女戸刃分ろ／被，女 73 - C PP,Q7BLV COMETION MORT - SUPPLEXIMIMAL TABLES 111M - THIPTEMM RAIWAY PPMECT TMLE PF Pa Tables 1. Indian Railways Investment Plan,, 1975-78 2. Freight Traffic and elagon-Turnaround, 1974-80 3. Freight Traffic by Comodity, 1977-80 4. Smimry of Operating Statistics,, Broad Gauge,, 1974-79 5. Summy of Operating Statisticso, r-Lter Guager 1974-79 6. Revenue and Expenditure Accounts, 1976-80 、付 ！可 以·必 ＼二 八 必＼ 孓＇ :&& 久 e ×k ×·、 C 文（ k 入 - 75 AMW C Page 1 of 7 INDIA TABLE 1 Thirteenth RaQU Project Project CgHletion Report INDIAN RAILWAU INVESTMENT PLANj 1975-78 1975/76 and 1976/77 1977/78 Appraisal Actual Percent- Appraisal Actual Percent- Estimates ages Estimates sge$ A. Total Investment 7680 7243 94 5500 4190 76 (IS In million) 1. Locomotives & Rolling Stock a) Investment (RS Mil) 3292.5 3982 120 2400 2131 89 b) Production L) Locomotives Diesel Electric BO Main Line 163 141 86 110 91 83 XG Main Line 24 10 42 30 12 40 Diesel Hydrolic BG - Shunter 21 21 100 24 24 -100 NO - Main Line 20 20 100 - - - Electric Locomo- 122 98 so 122 98 80 tives Total 350, 290 83 230 180 78 (Locomotives) ii) Electric Multiple units (Eve) 311 192 62 250 ill 44 iii) Coaches 1536 1786 116 1000 891 89 1v) Wagons (In terms 20500 24159 lis 18000 12160 67 of 4-Wheelers) 2. 'Workshops & Sheds Investment (RS Million) 335.4 727 64 250 129 52 3. Plant & Machinery Mestmen (RS Hillion) 152.7 189 124 80 68 85 4. Track Work,-Bridges Electrical Works a) Investment71R-AMil) 2094.9 2078 99 1600 1128 70 b) Rail Renewals (Us) 2050 1535 75 U/s, n/a U/a Sleeper Renewals (K=) (X28) 2700 2308 86 n/a n/a n/a d) Double Tracking (Kms) 450 288 64 n/a n/a n/a ANNEX C - 76 - Page 2 of 7 TABLE 1 1975/76 and 1976/77 1977/78 Appraisal Actual Percent- Appraisal Actual Percent- Estimates ages Estimates ages 5. Signalling & Tele- 1/ communication Investment 285.7 296 104 250 142 57 6. Electrification a) Investment (RS 411) 463.9 367 79 270 262 119 b) Energisation (Route As) 329 272 83 n/a u/a u/a 7. New Lines a) Investment (RS Mil) 364.2 390 107 200 224 112 b) Physi.al Progress (Kws) 300 345 115 220 262 119 8. Other Works, Services 1/ & Inventories Investment (RES Mil) 463.4 (-)452 - 300 (-)12 - 9. Staff Welfare & 1/ Quarters Investment (IS Mil) 207.3 166 80 150 176 117 11 Specific physical targets or percentages do not apply. n/a - not available. August 1980 INDIA SUPERVISTON OF A RAILWAY MODERNIZATION AND MAINTENANCE PROJECT Summary of IR's Total Freight Traffic, Average Lead, Net Ton-km and Wagon Turnaround 1974/75 - 1979/80lz Originating Tons Average Lead Total Ton-km --- Wagon Turnaround (days) -- Year (million) (km) (billion) HG MG 1974/75 196.7 663 134.3 14.6 12.0 1975/76 223.3 664 148.2 13.5 11.6 1976/77 239.1 656 156.8 13.0 11.1 1977/78 237.3 686 162.7 13.3 11.5 1978/79 222.6 693 154.8 14.2 12.8 1979/80 218.0 711 155.0 15.2. 14.1 / Provisional Source: Indian Railways June 1980 00 INDIA SUPERVISTON OF A RATLWAY MODERNIZATION AND MAINTENANCE PROJECT Freight Traffic by Commodity 1977/78 to 1979/801 Originating Tonnage Net Ton-km Average Lead (million) (billlion) (km) Commodity 77-78 78-79 79-801 77-78 78-79 79-801 78 78-79 79-80 1. Steel Plant Traffic (a) Finished products 9.0 8.3 7.2 9.6 9.0 8.0 1,062 1,097 1,111 (b) Raw materials to steel plants (excl coal) 22.2 21.5 20.8 4.5 4.5 4.5 204 208 216 2. Coal (a) For steel plants 15.5 14.5 14.7 4.8 4.6 4.5 310 315 306 (W) For vasheries 7.8 7.4 7.0 0.2 0.2 0.2 27 27 28 (c) For railways 14.7 13.8 14.0 10.8 9.7 10.0 734 699 710 1 (d) For power houses & others 45.8 42.2 40.7 35.5 31.5. 30.2 775 748 738 4 3. Iron ore for export 10.6 10.3 9.3 7.1 6.9 6.2 664 665 667 1 4. Cement 13.6 12.3 10.3 9.2 8.9 7.6 676 724 738 5. Food grains 19.5 16.7 18.1 23.0 20.5 23.5 1.181 1,229 1,298 6. Fertilizers 8.2 8.6 8.2 8.1 8.9 9.2 991 1.038 1.122 7. P.O.L. 13.1 14.3 14.2 8.2 10.0 10.2 631 698 718 8. Other goods 45.5 43.5 43.2 40.0 38.8 39.4 880 893 912 9. Railway materials 11.8 10.0 11.0 1.7 1.3 1.5 140 128 140 Total 237.3 223.4 218.0 162.7 154.8 155.0 606 693 711 1/ Provisional Source: Indian Railways .h1 1980 79 ANNEX C Page 5 of 7 TABLE 4 c 1974-75 W;S-6 1976-77 1977-7S 1972-;9 1973-79 1i;-0 1. rer&cetage of servceable loar" ves SC94C 84.39 d5.63 36.61 55.38 841.71 84.30 84.70 Diesel 82.26 52.93 82.92 83.15 85.52 85.40 895.0 sectc 78.77 79.95 79.40 AC s2.78 33.35 03.-0 85.30 DC 73.98 74.56 73.90 76.60 2. Percentage of serviceable paqs.er whicleg 84.02 94.29 81.26 86.59 86.56 86.70 86.20 3. Percentsage og e-viceable utaons 95.52 95.59 96.01 96.02 95.66 95.52 95.39 4. tagine-ka per day per enne n usae Paserter Sca= 236 238 233 22s 218 217 215 Diesel 652 641 721 735 628 631 627 glecrIc 408 450 697 636 459 437 452 Freithte Stean 112 114 14 111 100 100 94 Diesel 306 321 379 353 317 315 306 Uetic 296 331 445 AC 410 3o5 322 293 DC 337 171 166 179 5. Geas trallng load per freih trala (za) 1563 1577 1607 1638 1648 17211' 1771L 6. Met tonnae pr frelght traln 778 782 796 818 857 912-1 952,1 7. 9agon-1m per day per vagen 70.3 76.3 31.1 81.9 75.9 75.8 72.2 8. Ne te= la per vagon per day 907 982 1019 1045 976 1080 10571, 9. Cre* cm 'a per freft czain tour 26756 217663 -12=. 3C238 :346 21978 3206 10. umt can k- per f:cigzt tra. -.ur 14599 15018 16292 1444 15341 1532 139C,1 11. Percentaga of paaeenger :ralns arrtv.ng an time 82.1 86.5 93.2 91.3 88,3 88.6 86.0 12. Avera$« vagn l0ad (ton) 18.5 18.9 18.9 19.0 18.9 21.01' 21.1I 13. ~aCiti uttlizactån ('.) Steaa 46.7 48.3 45.3 47.9 45.3 46.7 49.5 Diese 76.7 80.0 30.0 79.2 7817 76.6 76.3 EleCIc 72.1 76.3 79.6 80.4 76.3 74.4 74.0 All traction 54.2 56.7 55.4 57.9 56.3 56.9 58.9 14. Average speed at all frelght eras (11h) steam 12.0 11.8 11.9 11.5 11.2 11.2 10.9 DieL 22.1 22.1 23.1 22.5 21.9 21.7 21.1 Eecrie 22.4 23.5 25.2 AC 25.0 24.2 24.2 23.8 DC 20.6 19.3 19.4 18.7 ALU traetton 18.4 18.8 20.1 19.7 19.6 19.6 19.5 15. Average apeed of chrough treight tralna (:1h) Scedn 15.8 15.9 16.8 16.3 15.8 15.7 15.2 Diesel 22.3 22.3 23.3 21.9 21.9 21.7 21.3 Electric 22.5 23.7 25.4 AC 25.1 24.3 23. 24,0 DC 21.0 19.6 19 18.9 AU craction 21.0 21.6 23.2 22.5 22.1 V V..7 16. Averaga lead ot a toa of freig,1c (10) 631 636 626 659 663 65. 6751 . tga lurn-ound (day.> 14.6 13.5 13.0 13.3 14.3 14.4 15.3 4 aed on traln documents. Pnovisiocal Sourcet Zadian Ratie M.a 198 80 - ANNEX C Page 6 of 7 u e or 4 r:..s - -;...::g r: :: :st:: ...r m e:.TABLE 5 ACC!!_ Det..lser 1974-75 1975-76 1976-77 197-79 1973-79 r:3 ;u .979-60 Actual 1. Percenag of Gervicetb lacooacives SteU 85.23 84.45 86.37 66.42 85.38 85.30 R5.70 oiese1 86.55 88.33 68.58 87.62 87.25 .75 88..0 Ecerc 37.90 85.00 e.00 80.02 80.0 A1.C0 84.40 2. rercentage of siceable pascenger vehiclen 87.13 88.45 89.39 89.30 89.50 29.70 88.80 3. Percentage of servlceable egenv 94.81 95.65 96.00 96.09 95.86 95.9 95.40 4. tkS-Ia per day per *ngina in use Pasnner Sce91 205 215 215 215 .223 2CS 199 Difsel 556 533 573 561 576 57. 528 lectrie 361 401 4.33 431 6i9 417 411 Stean 117 120 126 123 115 112 114 Diesel 272 286 344 305 295 .13 273 Uec%ric 232 225 24 211 211 21'. 211 5. Cro trail«ng lad per freight ea (ton) 800 800 785 800 P35 Aa' 86,111 6. get Con~age per fright tr41n 422 413 -13 423 451 47:11 487- 7. u4s- per day per vago tn usa 53.7 56.4 58.1 57.5 52.7 52.7 49.4 8. yet ton k per vatgon per day 528 545 570 570 543 534, 5521 9. crgme con k& per taight-train hor 11300 11109 11097 11164 11495 iM 1193311 10. se% t= ka per talthz-traiz tour $5s 6423 6556 6511 4WS .31 11. Percentage of pasentr :raing arrIVG on ete 85.6 88.7 14.1 92.4 91.7 .1.4 86.1 12. Average vagn load (ton) 13.2 13.3 13.6 13.7 13.8 14.6 14.7- 13. räootive utiliation (2) Steam 35.6 41.7 41.3 40.8 38.0 p.c 37.8 Diesel 68.8 74.2 74.6 72.9 72.1 7.3 70.8 Electric 45.0 53.3 58.3 61.7 59.2 51. 56.3 All cracti 39.4 45.4 45.4 45.0 42.5 42.6 42.. 14. arag* speed of al freight Stea~ 12.5 12.1 12.2 11.9 1l.i .5 11.2 D1sel 18.7 18.5 19.1 18.8 18.4 16.3 18.7 ectric 22.5 20.0 19.4 16.8 17.1 17.3 17.9 all tracton 15.2 14.9 *15.2 15.0 14.3 14.9 14.d 15. aerage speed of throuh freig. craens (k=/O) staeen 14.4 14.1 14.1 13.7 12.7 12.3 12.2 Disel 19.0 18.8 19.2 19.3 18.6 13.6 18.5 Electrl.c 22.5 20.0 19.4 16.8 17.1 r.z 17.9 All trAction 17.6 17.3 17.6 17.4 16.9 16.9 16.6 16. Averöge lead of ton of freight (k=) 478 456 458 473 507 517 5121 17. tiagon tn-rou~d (dayal 12.0 11.6 11.1 11.5 12.8 12.7 14.2 1 ased mn train etnents. /p~ovsienal 8eurt 2ndin Ratuvay Itap 1980 ANNEX C - 81 Page 7 of 7 TABLE 6 INDIA SUPERVISION OF A RAILWAY MODERNIZATION AND MAINTENANCE PROJECT Revenue and Expenditure Accounts for 1976177-1979/80 (Rs Million) Provisional 1976177 1977/78 1978/79 1979/80 Revenues Freight 13,259 13,434 13,054 14,479 Passenger 5,693 6,217 6,728 7,500 Other 1,409 1,583 1,728 1,565 20,361 21,234 21,510 23,544 Operating Exoenses Repairs and Maintenance 5,956 6,087 6,537 7,148 Operating Staff 3,126 3,162 3,550 3,884 Fuel 2,883 2,992 3,072 3,702 Operating other than Staff and Fuel 872 880 838 916 Administration 1,528 1,540 1,620 1,771 Miscellaneous Expenses 1,125 1,045 1,115 1,219 Depreciation Fund 1,350 1,400 1,450 2,000 Pension Fund 350 400 500 640 17,190 17,506 18,682 21,280. Net Revenue from Operations 3,171 3,728 2,828 2,264 Capital Charges to Revenue 208 200 220 280 Net Revenue 2,963 3,528 2,608 1,984 Dividend on Capital-at-Charge 2,091 2,266 2,242 2,405 Surplus (Deficit) 872 1,262 366 (421) Operating Ratio : 84-.4 83.0 87.5 90.4 Rate of Return on Average Capital-at-Charge % 6.5 7.4 5.2 4.7 Total Freight Traffic (Million Tons) 239 237 223 219 Source: Indian Railways June 1980 一才p一 州‘·、＇婉→以一乙洶／夕 - 83 ANMX D Sm *Mfg NFRW *T# *MR FX DHIR Offammed of b&& mWast bmm* soma F CE saw$" or pba" M" ,=USX") 2;o.3739SsP&rtm=t d 8momie Affaft (Ar** 1DLrY&Tbbsg) q(*r*/J1evVo&t% 3rd ftbrmaty^A* Dear .8hzi Vasudev, Kindly refer to W, ftiv 8, Mapmrs DirectorMPs, letter dated 31st Octobei, IN3 calling for 0011s coments an draft Project Performance Audit Report an Mdrteenth Railway ProJecC(Cr.N**5S&-1K1 by 9th February, 1984,w 2e r anclose the observations/commerts received from WAstry of R-11vays an th.,4 draft report. These are In tw* Parts . Vart.1 which Incorporates Indian Fallways' p-)siti*n an some geniral tnpics raised in the Report and Vart-11 which contains paravise coments on the Report. Kindly pass on the same to the c-)ncerned Bar& authorities for consideration, Kindly acknovIedge receipt. Y*urs sincerelyx Wi C.1-1, Vasudevq Adviser to ZO(Bank)v 0/6 Ind bassyl MIA11 160 M&9320 9- 一Jーゾー y不ン／粉ンぐf沿ん矛 85 MAGI liaMAN01 "I AMM INA&1132i A"-#AX RAW= 19MAT- EAP-Ml am" al (a) As stated in the lot sentence of paru '"rof the Report, the Project was basically to support an ongoing investment Programme and was to cover a 'time-slices of the programme. The Project Completion Report furnished by IR gave figures for the first two years of the projects presumably because the Staff Appraisal Report was based an assessments/projections etc. over a two year period onlys Accordingly, PCR attempts to compare the position of eatuals during these two years vis-a-vis that anticipated in the SAR. Relevant figures for the 3rd year have been incorporated by the South Asia Region In their Wpplement. A chirt giving the position for all the three years is at Annexure 1 for ready reference* (b) Agal 1 akd 3.1 tX of AtAM stl aW UataZ3nfbnu== The statement In Para 149 that the "information on the status of the fleet is limited" is not clear. Substantial data/infomation regarding the wagon fleet, type-wise and age-wise is available* Any Data required by Audii could have been furnished by IH on demand. (a) g3 Wa3 zal a of natmant PmnaaW As A doubt has been expressed whether the investment proposals in the Project were the mDst economical solutions for 1h when compared with alternatives, The Project was a part of an ongoing investment Programme. Individual works constituting the Programme apparently had been accepted by IR as the best f6r it and for the country. a/ All references in this Annex are'to paragraph numbers in an earlier draft PPAR. - 86 - A note on IR's Project valuation Procedures is annexed to the BAR as Amexure 8. Investment proposals, particularly for line capacity works, new lines and other facilities are financially appraised and taken up only it found to be financially justified and/or necessary for the efficient functioning of La. In fact, IR has a system of evaluating the benefits actually derived from the investment vis-a-vis the benefits expected at the appraisal stage through a 'Productivity Test' carried out over various time-periods after the completion of the Project. (d) Tacat of Mkun i n r n in Pailamon-t Railways provide the basic infrastructure viz,, Transport which has an important bearing on the country's economy particularly in a country like India which has large geographical dimensions and also scarce financial resources. Railways are one of the key infrastructure sectors in the country. Performance of the Railways directly affects the country's economy. The converse is also true. Hence for any meaningful control over the economy, the role to be played by the Railways has to be appropriately regulited. Keeping in view the above position of the Railways, they have to function as a public utility and not as purely a commercial undertaking. While performance of Indian Railway'is sought to be judged by commercial standards it has to be recognised that Ih forms part of the Indian Government and is controlled by Ministry of Railways. It has to operate within the financial resources position of the country as a whole and to that extent operates - 87 - in a "strait Jack-t as far as resource Mabilisation is concerned. It has also to follow other government policies and directives for achieving parallel National goals prescribed by the Government. e.g., priority for movement of essential commodities like foodgrains, salt, perishables, etc., which have direct bearing on the cost of living of' the weaker sections of the society, or movement of bulk raw material items for core sector establishments and industries like coal, iron ore etc., which have direct bearing on the country$s industrial growth. In this context totally infAltered exercise of commercial decisions may not always be possible and compromises have to be struck and adjustments made in the movement of traffic and operations/commercial practices in keeping with the country's overall socio-economic objectives and goals. (e) stmatin= f 14's arary.n cannrAty The tasks allotted to 14 are highly complex taking into account the variety of commodities required to be carried needing differant types of rolling stock e.g. coverd/open freight cars, special purpose rolling stock and i. would be difficult to carry out the type of detailed exercise su;gestfid In the audit report. There are sevaral imponderables to be looked after -Ihich can not be even quantified or forecast. The movement pattern suddenly changes Aith failure of monsoon or floods in some regions, A bumber harvest would promote inputs requirements of fertilizers. The movement pattern from agricultural production centres to other parts of the country would change with drought/semi-drought conditiojns. Similqr uncertainities arise on rccount of port congestiod, change of internatio;al situation In respect of - 88 - commodities availability etc. Many of the core sector industries which provide for the bulk of the movement by 14 are not in a position to give precise forecasts pattern of rail movement requirement and are not able to guarantee that traffic as would be possible in a purely commercial situation. In the absence of total discretion in regard to resources mDbilisation, as also employment policies which need to take into account the Government policies from time to time (IR being a Govt. organisation) the adaptability to changing situations is rather limited. There are other extraneous factors which influence.the pattern of railway movement and many of these affect changes very suddenly. In an environment of mixed economy and politically democratic and free society, the traffic patterns would also change depending upon the socio-economic situations prevailing from time to time. It would, therefore, be an extremely complex and difficult exercise and perhaps of little purpose to try and assess carrying capacity on the basis of the quantum of traffic likely to be offered and the pattern of movement etc. Any specific suggestion in regard to prevailing practices adopted on some Railways abroad working in similar situation would be appreciated and on receipt studied carefully. - 89 - PRDJnCT Pi1kFORM ANCE3 AUDIT REPORT InHA a iazi MALAx .dOJECT 1RAV91Q U A, - IN) EAAI A NWv&i _ ik RAAA . s In a vast developing country like India, Railways are the life-line of the nation. With the technological advancement of the country, IR ushered in an era of industrial growth, accelerated the pace of national development and built up the back bone of the national economy. It provides the infrastructure for economic development and social interaction. In view of this position, IR has to function both as a public utility and as a Commercial undertaking. Since IR has such an important bearing on the economy and economic life of the country, adequate Parliamentary Control is inescapable. However, IR enjoys a large measure of autonomy for its day to day operational efforts, Many Railways of the world are financially in the red. Still their operations are continued in the national interest. It is obvious that these are also operated on other than "purely economic grounds". A number of issues have becn raised in this para. The main ones amongst them are s- (a) Statistical Data is Incomplete/not in ap xia fr . -. _ 1A has a well-developed statistical organisation and substantial data/information is available relating - 90 - to practically all its assets/operations. Data,as may be required by the Bank, can be made available. (b) Whether investments accepted by the Bank were th nAt anMnA1 9n1tinn & Physial Arhiawammana IR is in complete agreement with the views expressed by the South Asia Division in para 3 of the supplement. IA has an elaborate system of financial appraisal of individual projects/works before they are accepted for execution Ann. 8 of SAR. The "Project" under discussion was more in the nature of an ongoing programme of development/renovation/expansion of Ia. The Credit provided foreign exchange support for a time-slice of IR's investment. This comprised numerous works, all being executed as a part of this Programme. It would be extremely difficult to provide the details of all these works in a summarised manner for inclusion in the ambit of SAR. However, individual works, connected ith this programme have gone through the detailed financial appraisal system obtaining on IA and Bank Group are free to go into the records of each of these 'Projects'/works. Ia is, perhaps, one of the two or three railways in the world which is making profit. Bven the privately-owned railways whiZh are purely comme*1cially oriented and whose basic philosophy would be to "want to make a highf return on its investment........" are unable to make profits despite all commercial freedom to pick their traffic ad to maintain its own freight and fare structure. In this context IR's financial performance, even against heavy odds of being liable to carry any and every traffic offered to it and also of having to adjust its tariffs in consonance with the overall economy of the country, is - 91 - noteworthy. 1he tariff Policy of 1A, is based on a Judicious blend of the m-rket situation as well as state policy. IR provides the basic infrastructure i.e. transportation for products of all sectors - agricultural, mineral and industrial - of the country's economy. The country's socio-economic philosophy, therefore, cannot be divorced from the operational/tariff philosophy of IA. This, nerhans wo-ld be the position in practically all the countries of the world. Within the overall framework of the country's economic and socio-welfare aspirations 1A enjoys considerable autoomy in its operational/commercial/ procurement policies. Being a self-contained government department with its own integrated finance, 1A is free to take its decisions relating to various matters inclidinZ procurement etc. The autonomy enjoyed by Ld has been considered to be sufficient. However, as brought out earlier it has to be recognised th:it spanding by IA has to be regulated within the financial resources approved by the Parliament. The resouces therefore made available to 1i have the same limitations and constraiats aj the resources available to the Indian 4overnment who have also to look after the requirements of resouces for various other core sec*ors of ind stry as also req7Arements of agriculture, power, energy and other important inf:-astructurfil sectors. The PGR presumably gtve quantities and expenditure for the initial two years of the proj.ct as the iA. was based on the assessments for these two years only. - 92 - However, quantities and achievexents of the extended year of the project were subsequently furnishec by the South Asia Division in its i upplement annexed to the Audit Report. A table showing the achievements for the three years is also anexed as Annexure-2, Changes in procurement programme become necessary consequent to chnnges in the traffic requirements and availability of financial resources and occasionally,* to suit the local environmental conditions. Freight Traffic is necessarily dependent upon the overall economic climMte prevalent in the country. Railway Planning therefore becomes a complex exercise. Traffic requirements are strongly influenced by the fluctuations in the input/output of the agricultural and/or industrial units. Railways providing the infrastructure, have to function in consonance with the overall national requirements. For IR, this assumes s'5rious and complex dimensions in the context of its liability as a 'Carrier'. The problems faced in Railway Planning to arrive at any "realistic Traffic forecasting" are perhaps common to most of the Railway systems in the rorld. The 3ank, in their document "The Railway Problem", have also recognised this. It may be pertinent to recall their observations on the subject:- "Yet there is no simple, certain ans,:er to the problem. zilay traffic forocusting is inevitably difficult when many t af ics are gradually moving away to other preferred modes, especially if this coincides, as recently, with a period of considerable - 93 - year-to-year fluctuation in overall economic growth. Simple past ironds in railway traffic or overall relationships between railway traffic and GNP can. be very misleading." (Para X=XI of "The Railway Problem") WIN~T QF §UMqIAL WA"J~dT 3 RARP-3 14 to 3Ck S joy jr1n v, alght Xa1nCW Gonsiderable data/information, regarding wagons - age-wise & type-wise is available with IR and can be made available as desired. However an analysis of carrying capacity suggested in para 15, viz. by watching of wagon fleet with expected traffic levels taking into account factors like origin/destination of traffic, nature of commodity and its loadability, equipment etc., does not appear to be practicable in a vast organisation with complex traffic problems like the Indian Railways. Ie, has over 7,000 loading points and a very large number of comwodities are carried over the system. Though the 'bulk commodities' constitute over 80.Z of the traffic, the traffic pittern is influenced by a number of extraneous factors - both natural and man-made, e.g. failure of crops requiring large scale movement of foodgt-ains, industrial unrest/ problems in some areas, require movement of industrial products from other areas and so on. 6esides, 1A has a legal obligation to carry any traffic offered to it for carrioge. All these result in fluctuations in the traffic pattern making it highly complex. It would be problemetic for any railway system, even amongst Railways with the rost advancel Information Systems, *hich could assess its traffic potential/carrying capacity based- upon such a highly co-ordinated and well-documented/ quantified methodology as suggested. dhile the need - 94 - for improving upon the techniques and method for traffic forecasts is imperative, it has to be tempered with the availability of data and practicability of analysis. Ground facilities which influence line capacity are not transferable. So also the material handling facilities which may be specific for certain types of commodities or pattern of traffic and are provided at various terminals are not transferable. Even in the case of rolling stock some of these are meant for a specific purpose/commodity and variation in the need' of the traffic for such specialised rolling stock may affect their availability or create surpluses which are not transferable. It may be pertinent to recall at this juncture that 1A inherited a legacy of conventional four-wheeler, all purpose, wagons which are no longer efficient. Even, of these wagons, many have become overaged and need early replacement. During the last few years, IR has introduced more modem type of wagons for handling traffic more efficiently. Procurervent of coponents for the manufacture of such wagons is one of the items covered by the latest loan/credit. PRA 12 T 1;TMADUU E4T A l MIS Individual sections on which double tracking is provided are exazin.-sd, appraised and subjected to a financial, economic scrutiny before their acceptance. 4 As mentioned elsewhere, Ih have an elaborate system of examining its investment proposals. 4orks for double tracking are taken up only on saturated sections where even improved signalling -,ould not be adequate to meet the demands of traffic. Regarding the obrervations in respect of utilisation of line capacity, studies are being conducted - 95 - periodically to assess the reasons, if any, and for taking appropriate remedial measures. PARA _S AND 1e s 'AId.OF.1R s The conditions of working not being at all comparable, as mentioned in the report itself, it mould be invidious to compare the Indian Railways' performance with that of the Chinese Railways. As in any country following democratic idelogies, on the Indian Hailways the labour organisations have much more say and freedom of action than in countries which operate on totally different systems of controlled societies and idhogies, Again in monetary policies while there is a lot of latitude permitted on the Indian Railways, it has to be guided by the overall availability of financial support from the Government which has to take into considerHtion simltaneously the needs of all other sectors which go to affect the economy of th,e country, whereas in the regimented systems different norms apply based on expediency as may be convenient. In making any comparison the following factors would necessarily need be kept in mind while going into the relative performances of the two systems z- (a) The lailways in ChineLoperate under very regulated labour conditions Fnd all the sectors being under Government control including industries much more planned and regulated movement is possible than on It. Variations from set nrocedures as planned are hence very few and far bet-ieen. (b) Priorities in China diff3r and while they give enphasis on industrial growth and freight, it is also agro based on IA mad very much more importance and similarly attention is given to the growth in the passenger traffic by the IA. Such measure of movement - 96 - by passengers is not evident in China. The IR move as much as 10 to 11 million passengers per day. (a) In Chine the economy is developed on regional basis termed cellular economy and thereby by and large the distances for transport by rail gets regulated severely and gets contained more z2 less within the region whether it be for agriculture or industries or for movment of consumer goods. (d) The freight movement operateton directives issued by the Government specifically with targets which are enforced rigidly. (e) The Railways in China have total options for accepting traffic selectively and thereby avoid irrational movement. Once again, the movement being mostly confined regionwise leads come down whereas the Indian Railways have to cater to a long lead traffic especially between hinterland and ports and vice versa. Therefore, while the Chinese Aailways are able to concentrate practically only on movement of block trains, on the Indian Railways it is not possible to do so completely. Jhile on the Chinese Railways the avzrage lead is about 500 kns. on the Indian Railways, it is about 700 kms. (f) The Chinese iailways have relatively new wagon fleet acquired since 1965 whereas the ih have a large number of older wagons dating back to 35-40 years. The Chinese Aail,iays have standardised their wagon stock and have only e-wheeler wagons with centre buffer coupl)rs. I still have a very large fleet of 4-wheeler wagons with screw couplings which act as a specific inhibitor of large scale fast and -97 - heavy movement. On the Chinese Railways, the carrying capacity is higher with heavier type of wagons. (g) As a result of operating in a regimented society on the Chinese Railways cases of indiscipline, industrial unrest are practically non-existent and the local labour organisations and leaders ensure working of the labourers to prescribed norms and standards. (h) Moreover, the method of compiling statistics between Chinese Railways and Indian Railways varies widely and hence in the absence of common statistical data norms, comparisons may get distorted. The II not only recognises the need for improvement of operations, wagon turn-round, wagon releases, etc. but it has also been striving to speed up movement by analysing and taking action against the restrictions that go to cut do,.n the speeds. There is a constant endeavour to improve on the performance. In this connection, recently it had c-nt a team of top level officers engaged on transportation operation to ChinaLwho on return submitted a report which is under consideration. PT s DISATI4A OF II'Q OPadATION4 The itatement in the second sentence of para 20 does not appear to be factually correct. Paras 6.05/6.06 of JAA bring out the basic objectives of I:ls investment programre. The very first objective, as outlined in Para 6.05(a), reads as follows s- "to modernise the syst-n in respect of its equipment and nractices to the maximum extent permitted by the availability of funds, so as to improve tha efficiency of the network and to reduce costs". - 98 - In 1978, the IDA identified specilc projects/ areas of IR's functioning for modernisation so as to increase effticiency, eut down costs of operation which normally cannot be achieved oy one or two isolated projects. The entire gamut of modernisation would embrace many facets of IR's working including workshops, operation of trains, day-to-day maintenance facilities as well as processes etc. etc. The sta tement in para 23 that "In the case of IR the result couldL be a reduction of the wagon fleet in the order of 100,000 units" is highly general and does not appear to be based on any detailed examination of the conditions prevalent on Indian Railways, Modernisation/inprovement of a large system like the .Indian Railways is a continuing process and a number of factors, including a whole range of circumstancas L is offering economic and industrial environmental situation, need to be taken into account while assessing/evaluating the feasibility of introduction of any measure into the system. After detailed consideration IR/GOI have identified that the 016 would be one of the measures for imDroving ef'iciency and is taking active steps for its implementation. The stritement in para 22 "why such a system for Iii was not proposed much earlier" would therefore appear to be more a question of hind sight flowing fror later knowled6e derived from analysis and decision by the 14 and would hence not appear to be warranted. The proven procedure on one railway system with its own lim-itations -md shortcomings may not be as suacessful a solution on other railway systems with different problems and :orking environment. Any innovation, - 99 - particularly one involving introaction of high technology and heavy investment has to be examined and studied in all its aspects before it is accepted in an Or anisation.' Premature/hurried inplementation of a sop%isticated system in an organisation like IR could lead to serious organisational/operational problems. In para 23, the last part of the oommeno would not appear to be tenable in came of IA. Various alternatives including those relating to increased signalling for increasing line capacity are examined in detail by IR in its quest for inproving operations. It is only after a financial evaluation of all possible alternatives to meet the objectives/requirement, that works for double tracking/signalling increase in number of loops/ crossing stations etc. is undertaken. The last sentence ,in para 23 again could be more in the nature of a general- isation as application of any sophisticated system may yield different results in different circumstances on different railways. EA A -. FINA9GIAL 9AIT4A FOU IR s It's accounting system has been gone into in detail in the previous appraisals and has come to be aiccepted by the Bank. The financial criteria of IA are clearly stated and reviewed from time to time. All such criteria are based on recommendations of a Parliamentary Committee which goes into these matters periodically. Present system of providing for depreciation has slso come to be accepted based on the studies and recommendations made by the Parliamentary Committee from time to time. Detailed statements and criteria for arriving at the amounts so provided, are available in the reports of Parliamentary Committees viz, Railway Convention Committee, Estimates Committee, Public Accounts Committee etc. Committees like the Aail Tariff Ahquiry Committee (RTSC), also have gone into this issue and made recommendations., Hence the basis on which provision for depreciation has been made by It from time to time is very well-known, well- - 100 - established and has been much discussed. Duriag the Fifties and the early Sixties, allocation to Depreciation Reserve Fhnd was made on the basis of the amount likely to be required for replacements during the year. This situation however changed with the deficits faced by Railways in the late sixties. Further, it was not considered appropriate that large balances be maintained and carried forward in this fund. Accordingly, appropriations were suitably restricted. However, with the heavy inflationary elements which set in after the oil crisis and also the-heavy backlog of renewals/ replacements which assumed critical proportions, the requirements of funds for clearing the backlog snow- balled into huge dimensions. It has stepped up its appropriations to the Amd substantially. There is no evidence on record to showthat the Depreciation provision was pitched below the desired level intention- ally to "overstate" IR's income. To bea e of earli-r actions on the basis of such hindsight or on the basis of newly emerging situations would not be tenable. All relevant accounting information desired by the Bank are available and can b. furnished as may be required. The Accounts of any institution would reflect its basic philosophy. As indicated earlier, i carries out detailed financial appraisals of various projects including those for increased track capacity and track doub.ing pdjects before undertaking the works. Since the project under review was more in the nature of programme assistance, individual projects comprising of programme - 101 - have not been considered in all detail as is normally done vhile reviewing individual projects. Complete data/information in respect of all projects undertaken by 11, which would be fairly large in number would be available with 1A and can be reviewed if necessary. The a tements in para 26 are again in the nature of Al M. and "iapressionist" in nature. IR's forecast of traffic volumes are necessarily based upon figures oflikely traffic movedent furnished by various departments/industries duly moderated by the- Planning Ommission. In this regard our comments dn para 11 are also relevant. The argument in para 26 regarding the basia of conomic evaluation of the Project needs more detailed thought. Quantifiction of the 'Consumer Jurplus' has always been problematic and not firm. Rolling stock is only one of tie assets contributing & the carrying capacity of the iailways. There are numerous other assets contributing to the carrying capacity viz, line capacity, which are non-transferable and whtch influence operations. The lazt sentence of this para again is more a genermlisation than factual. - 102 - APRIL 1979 Tatb3,e 9 Prinpoal iteme Åneladed in th! Pro.wke sAppraisetlAgtualesAGeu l etit** du~ng durång p~.- 1975-6 7-76 1977. efte 1976-77 a 78 @Stg Total Investaant (Re vi milllen) 7680 7243 4291 94 1. Loooie & Rolline Steek (a) Investment (4. in million) 3292.5 3982 2131 91 ()egoduction,t Ckaug i JEJ 163 141 9 86 . NNn LI . 24 10 134 42 21 21 .19 lo. NS - Mein .na. 20 20 - 100 EI~2tria Locomtivsjg .2 53 ,_gg Total (LeeCmotivs> .i J2-_IL (d) Electrio Multipla Unite (EXUg) 311 192 $ 62 (Jii) Cosokee 1536 1786 til 116 (iv) Wagons (in terms of 4-whoolera)20500 24159 /#/&I Ile 2. Workshoe and Shada Invetmanta (b. in millions) 355.4 227 129 64 Invootment ch. millions) 152.7 189. 68 124. 4, Tack _g.kp Rda.a Mnd EL.oLtfalf~ b avestmont (b.ln millions) 2094.9 2078 1130 99 (b) Rail Ronewela (Kon) 2050 1537 719 75 (c) Sleoper fonewola (Kon) 2700 2308 943 86 (d) Double TfackIng (K..) 450 288 122 64 5, Sianallina & Taleomomunications Inveatagnt- (h. in millions)• 285.7 296 142 104 6. Electpificaton a (a) Investment (1. in million) 463.9 367 202 79 (b) Enorglastion (Route Ka) 'X ' 7. Im LiJneme ' () Invostment Ob. in million) 364,2 390 224 107 (b) Physical,Progrees (KMe) 300 345 78 115 -103- App 94e.141 otualo per- 1.41AMMf:~Z 5, 0ther weke, esavåse.,ad InvestMent (m. n uillioa) 463,4 (-) 45i (-) uao 9 taot 6 & arin cuaonet@ nvstrent (m. in 10llion5) 207.3 166 176 #o - 104 - pad ght Prfnannna AnMt ma nm ' 1979-80 198041 18142 (1) Route Length (KA) 60933 61240 61230 (2) Total double tracked ' 12944 13040 13141 (3) Locos in Service 110Y73 10908 1015 (4) steam 7856 (5) iesel 2243 2403 2515 (6) Xectrio 974 1036 1104 tI (7) Preight Wagons (.BG) , 41307 2 413640 41478 (8) Tons Carried (000) , 217800 2 248 (9) Ton-Ka (Millions) , 151474 174202 (10) AV-It (1a) B9 1 G 1 O XBG NO 691 521 '698 544 687 626 I (11) Ion-KM/Route-Km (Millions) 2 , 2.6 2.8 (12) Ton-Km/Freight Carw * 0.4 0.4 0.4 (Millions) 'EQ MG G G BO M (13) Average Load/Car (Tons) .1 14.1 B. 1. B 19 1 4 I 1.51, 931* tI (14) Turn arovtd time 'BG MG JIG kG B XG (Freight ragons days) 15.1 14.1 '15.2 18.3 13.3 14.2 (15) Total passenger (Millions) 3505 36126 3704.4 (16) (of which commuted) 1902 2000 2064 (17) Passenger-Km (Millions) 198657 20858 220787 (28) (of which conrmited) 38730 41086 43965 (19) Passenger Coacheq 38166 38333 3798 (20) Treffic units (millions) 354652 3632 -394989 Ton Im plus Passenger Kas. (21) Traffic unit (millions) 32 34 36 per locomotive (22) Passenger I(m per coach 5.2 5.4 5.8 (millions) (23) Traffic units per' route 4m 5.8 6.0 6.6 S13 1314 - 105 - (In rores of rupees) 197940 13980-.8 li 198l-82 1982-83 (A) Gro,sa Tri. ' o Receip ta 2337.84, 2624.02 3538.24 4375.79 (8) Ordinary kpeug xpenses 378.38 2232.46, 273,Tø55 3387.21 (C) AproprIation to DRF 200.00' 220.00, 350.00 56.00 (D) Appropriation to Penslon 61.00 84.00, 98.50 I'48.00 R2nd (a) Toto -n,b Ax~9Se 2142.38 1 2536.46, 3182.05 3891.æ 3g 4.8Mø.-5ø (F) Net Tr ii ~eiptg 395.46 87.58 356.19 4.51 (6) Net Miscellneous Receipts 31.83 * 39.93 46.8? 48.85 (R) Net alwaGR venu 227.29 127.49 403.06 33.36 (I) Dvident Payable to 293.53 325.36 356.47 458.17 General Revenues (J) Gross &urplus ( ) 66.24 197.87 4. 46.59 4. 75.19 Shortfall u-) E.. ) (K) ApproprIation to Railway Developau t Fund & Payment - - 46.59 75.19 of d red Dvident Liability (L) Net S ulus/shortfall - - - - (M) perating Ratio 91.5 96.3% 89.4Å 88.5% (h) Peromtage.net revenue 4.1 2.1% 6.05 7.3Å