CHAPTER 3
Guna-Etawah new Broad Gauge line Project (Phase I and II)

1.    Introduction

The Guna - Etawah new BG rail line Project covers a total distance of 348.25 kms. This line runs through two states viz., Madhya Pradesh and Uttar Pradesh and connects the Bina - Kota line at Guna, Delhi - Kanpur trunk route at Etawah, and Delhi - Mumbai route at Gwalior. This line passes through the Chambal valley. The Preliminary Engineering-Cum-Traffic Survey for the Guna - Etawah Rail Line via Shivpuri, Gwalior and Bhind was sanctioned by Railway Board in the month of October 1980. The survey was carried out during 1980 to 1983 and the survey report and estimate was submitted to Railway Board in January 1985. The entire project has been divided into three Phases as given below:

1 Phase I Guna (GUN) - Shivpuri (SVPI) 102.40 kms.
2 Phase II Shivpuri (SVPI) - Gwalior (GWL) 124.55 lms.
3 Phase III Gwalior (GWL) - Etawah (ETW) 117.71 kms.

Phase I and II of the project were completed as on February 1991 and March 1999 respectively and opened to traffic. The expenditure incurred till the end of March 2002 was Rs.52.41 crore and Rs.148.02 crore for Phase I and II respectively.

2.    Scope of Review

As Phase I (Guna - Shivpuri) and Phase II (Shivpuri - Gwalior) of the project have been completed so far (August 2002), the review covers the entire construction activities and financial appraisal of these two Phases.

3.    Highlights

  • The decision of Railway Board to construct the new line Guna-Etawah even after knowing that the project was not financially remunerative was injudicious.
(Para 4(i))
  • Though the work of construction of new line (Guna - Etawah) does not fall within the ambit of urgency, an amount of Rs.4.00 crore was injudiciously sanctioned to start this work.
(Para 4(ii))
  • Extensive sinking of track on Guna - Badarwas section occurring due to large number of deficiencies in work led to discontinuance of train services for two years and extra expenditure of Rs.0.33 crore on rectification work.
(Para 5.1)
  • Train services on Gwalior-Panihar section being un-economical remained suspended from September 1996 to March 1999. Commissioner of Railway Safety inspected Khajuri-Mohana section after its completion in March 1999 and pointed out several deficiencies due to which operations on the line were commenced with several speed restrictions. A large number of speed restrictions were still in force (July 2002).
(Para 5.2)
  • Railway Administration decision to reduce the quantities of work assuming a slope of 1/4:1 was injudicious as a clause for variation of scheduled quantities up to +40 per cent was incorporated to take care of the likely increase in quantum of work. This resulted in avoidable extra expenditure of Rs.0.73 crore.
(Para 5.4.3)
  • An amount of Rs.1.27 crore recoverable from 16 defaulting contractors whose contracts were closed between 1990 and 1998 is still to be recovered.
(Para 5.4.4)
  • Railway Administration's poor contract management resulted in loss of Rs.0.47 crore. The loss could further increase if the remaining two cases are also decided in favour of the contractors.
(Para 5.4.5)
  • 63 contracts are pending for finalisation though works were physically completed between January 1989 and January 1999.
(Para 5.4.6)
  • Material at Site (MAS) accounts of Phase I and II show stores balance of Rs.2.99 crore and Rs.10.98 crore respectively despite the fact that works have been completed more than 10 and 3 years ago.
(Para 6.1)
  • Railway Administration's failure to take corrective action to change the consignee resulted in unnecessary transportation of railway material leading to extra expenditure of Rs.0.23 crore.
(Para 6.2)
  • Non-observance of proper procedure for issue/ accounting/ verification of stores resulted in misappropriation of material worth Rs.1.17 crore.
(Para 6.3)

4.    Financial Justification and Sanction

Sanction to conduct the survey for constructing new BG line from Guna to Etawah via Shivpuri-Gwalior-Bhind was conveyed by Board in October 1980. The preliminary survey was completed in January 1985 and the cost of the project was estimated at Rs.131.56 crore at 1982-83 price level with an anticipated rate of return as 2.7 per cent. The work of this project was included in the Works, Machinery and Rolling Stock Programme of Railways for the year 1985-86 at an anticipated cost of Rs.158.77 crore. In order to commence the work of land acquisition before the onset of 1986 monsoon, the proposal of the Central Railway to undertake the work on Urgency Certificate was accepted by Board in April 1986 and an amount of Rs.4.00 crore was provided during 1986 for Phase I. Final location survey for Phase I was submitted to Board in May 1986 and detailed estimates of Phase I was sanctioned in the year December 1986 at an estimated cost of Rs.41.97 crore. In December 1986 Board increased the scope of work under Urgency Certificate sanctioned for Phase I and asked the Central Railway to cover Phase II as well.

Detailed estimate for Phase II was sanctioned by Board in March 1992 at an estimated cost of Rs.98.87 crore. Subsequently supplementary estimate amounting to Rs.0.56 crore for electrical works and upgradation of signalling work at a cost of Rs.4.18 crore was sanctioned in March 1994 and November 1998 respectively.

In this connection following audit comments arise:

(i)    As per codal provisions, no proposal for fresh investment will be considered as financially justified unless it can be shown that the net gain to be realised as a result of the proposed outlay would, after meeting the working expenses, yield a return of not less than 10 per cent on the initial estimated cost.

The initial projection of Rate of Return (ROR) of 2.7 per cent was done by assuming running of 3 pairs of passenger trains and 1.5 goods train. However, later in the project estimate survey of Guna to Etawah line ROR of 11.01 per cent was worked out by projecting running of 3 pairs of passenger trains and 8.5 Goods trains. In September 1989, Railway Board asked Central Railway to again work out the ROR by adopting current fare and freight rates on the traffic assessed at survey stage when the first ROR had been calculated. On the ROR worked out by the executive, the FAandCAO(C) stated (April 1990), that due to steep escalation in cost of works, rolling stock and Working Expenses, the ROR has come down to 9.01 per cent as against 11.01 per cent as such the work was financially un-remunerative. In May 1990, Railway Board again directed Central Railway to review all the works proposed and asked to retain only essential facilities required for the project to prune down the cost thereby bringing the ROR to the level of making the project as financially viable. In September 1990, Central Railway advised Railway Board that after taking into consideration the reduced level of facilities, the ROR worked out to 9.3 per cent. ROR of 11.7 per cent was also worked out by taking advantage of Annual Statistics of Railways and reported to the Board. However, Finance disagreed with the method of calculation of ROR stating that taking into consideration the figures of Railways' Annual Statistics is neither correct nor as per procedure in vogue. Finance's views were also reported to Railway Board.

Thus the decision of the Board to construct the new line Guna -Etawah even after knowing that the project was not financially remunerative was injudicious.

(ii)    As per codal provisions, works which are considered to be urgently necessary to safeguard life or property or to repair damage to the line caused by flood, accident or any other unforeseen contingency, so as to restore or maintain through communication and works considered urgent to meet the immediate needs of traffic, should only be started prior to sanction of the detailed estimate. Though the construction of this line does not fall within the ambit of Urgency, an amount of Rs.4 crore was injudiciously sanctioned.

In 1986-87 when the Urgency Certificate for Phase I and Phase II were issued, 16 works involving Capital expenditure of Rs.450.52 crore were in progress over Central Railway. Audit scrutiny of records revealed that as against funds amounting to Rs.282.58 crore required to complete these works, only funds of Rs.30.61 crore were provided. Guna-Etawah new line construction project was sanctioned by overlooking the requirements of ongoing works, the progress of which suffered due to non-availability of funds.

5.    Execution

The work was carried out by Deputy Chief Engineer(Construction) Gwalior[Dy.CE(C)/GWL] under the overall administrative control of Chief Engineer(Construction) North / Chief Administrative Officer(Construction), Central Railway, Mumbai. Dy.CE(C) GWL is assisted by two Executive Engineers and two Assistant Engineers.

5.1    Guna - Shivpuri (Phase I) 102.40 kms.

The work of Phase I was initially targetted for completion during 1992-93. In March 1989, the target date was advanced and the work was slated for completion by March 1991. The work of Phase I was completed in stages and entire section Guna-Shivpuri was opened to traffic in February 1991.

The work from Guna to Badarwas (49.48Kms) was completed and opened to traffic in July 1989. This section was handed over to Open Line in November 1989. Open Line Organisation, in December 1989 pointed out a large number of deficiencies such as slopes not pitched properly, deficient ballast, curves and slopes needing re-alignment or adjustment, longitudinal levels not proper etc. and asked the Construction Organisation to rectify the same which suggest that the guidelines and safeguards were not observed. The trains on this section were, therefore, running under speed restrictions. Ultimately in the monsoons of 1990, the section was damaged due to abnormal sinkage of earth work and train services were stopped from August 1990.

The works on sections from Badarwas to Kolaras (27.46 kms) and Kolaras to Shivpuri (25.46 kms) were completed in April 1990 and February 1991 respectively and handed over to the Open Line Organisation.

Railway Administration spent an amount of Rs.0.33 crore for rectification of deficiencies and the train services on entire Guna-Shivpuri section were restarted in July 1992.

5.2    Shivpuri - Gwalior (Phase II) 124.55 Kms.

The work of Phase II i.e. Shivpuri-Gawlior was targetted for completion by 1994-95. The work of this section was started from both ends and the sections from Shivpuri to Khajuri (15.90kms) and Gwalior to Panihar (24.85kms) were opened to traffic in March and September 1993 respectively. The train services on Gwalior-Panihar section being uneconomical were suspended from September 1996.

The work Panihar-Mohana (38kms) section was completed in July 1998 and Commissioner of Railway Safety had authorised this section for opening to passenger traffic but the train services were not introduced.

The work of Khajuri-Mohana (45.80kms) section could not commence due to delay in transfer of land by Forest Department till December 1994. The possession of land was taken in December 1994 and the work commenced thereafter and was completed in March 1999. This section along with Gwalior - Panihar and Panihar - Mohana were inspected by Commissioner of Railway Safety (CRS) in March 1999. The CRS pointed out a large number of deficiencies in the earthwork, bridges, permanent ways, signallings and interlockings. The deficiencies in earthwork formation like provision of retaining walls in a haphazard manner, deep cuttings, non-provision of blanketing on top of formation, inadequate compaction, deviation from the degree of compaction as prescribed by RDSO, non-provision of proper side and catch water drains and trolley refuses etc. led the CRS to suggest a large number of corrective measures to remove the deficiencies including obtaining exemption from Railway Board for non-adherence to stress analysis in embankment and slopes and non-provision of blanketing on top of formation as required vide guidelines issued by RDSO in May 1987. The sections were, however, authorised subject to removal of all deficiencies and imposing speed restrictions on vulnerable stretches. A large number of speed restrictions were still in force (July 2002), which is an indication that adequate action has not been taken to rectify the deficiencies. The quantum of deficiencies pointed out by CRS also reflect on the poor quality of work done by contractors having been certified by Railway Engineers as correct.

5.3    Excess over Estimate due to Cost and Time overrun

Estimated requirement of funds as per Final Location Survey was Rs.42.27 crore for Phase I to be spread over the period of 7 years from 1986-87 to 1992-93 and Rs.106.18 crore for Phase II to be spread over the period of 7 years from 1988-89 to 1994-95. Against this there was a time over run of 4 years in Phase II and the actual expenditure for Phase I and II was Rs.52.41 crore and Rs.148.02 crore by the end of March 2002 which was in excess of the estimated provision. The increase in cost was 23.98 per cent and 39.40 per cent for Phase I and Phase II respectively and attributed to:

  1. material modification sanctioned by Railway Board in November 1998, for provision of Standard I signalling with multiple colour light signal at a total cost of Rs.4.18 crore; and
  2. delay in acquisition of land for Panihar -Mohana and Mohana - Khajuri sections. Though the action to acquire the land was initiated in July 1990, the land could not be acquired due to non-availability of alternative revenue land for afforestation and delay in obtaining clearance of the Ministry of Environment which could be obtained in September 1994 and the possession of land taken in December 1994.

In this connection, following comments arise:

  1. Though the work of Phase II was also brought within the ambit of Urgency Certificate, action to acquire land for Panihar -Mohana and Mohaha - Khajuri sections was initiated only in July 1990. Thus delay of four years in initiating action to acquire land coupled with non-availability of alternative land for afforestation and delay in obtaining clearance from the Ministry of Environment resulted in overall increase in cost and delay in completion.
  2. In the detailed estimate, Manual Non-Interlocking (MNI) signalling system was provided. However, keeping in view the fact that traffic prospects of this section were meagre, the provision of Standard I signalling with multiple colour light signals was not justified. Moreover, changing the system after incurring considerable expenditure was not warranted.

5.4    Contract Management

Most of the works of Phase I and II was got executed through contractors. A total of 646 contracts were awarded for Phases I and II and out of these 90 contracts valuing Rs.49.58 crore were test checked in Audit. Following irregularities were noticed:

5.4.1    Increase in quantity after awarding of contract

In September 1978, Railway Board had directed all Zonal Railways that there should be much greater stress on proper estimation of quantities of items provided in the tender schedules by insisting on sample bores, trial pits and soil survey for accurate and realistic assessment to avoid subsequent increase by manipulation by contractors and engineering officials. A review of contracts of Phase I and II in Audit revealed that in 15 cases the increase in value of contracts ranged between 21 per cent to 186 per cent. This indicates that quantities of work required to be executed were not assessed properly at the time of tendering.

In 3 contracts, the quantities of earth work to be done were not assessed accurately as per site requirement and had to be revised during execution. This resulted in increase in scheduled quantities ranging from 46 per cent to 114 per cent and the original contractors demanded extra rates. The balance quantities were, therefore, got executed by awarding fresh contracts which apart from incurring extra expenditure of Rs.9.65 lakh also delayed the completion of the works by more than 12 months.

5.4.2    Award of contract without possession of land

The work of earthwork in formation as well as construction of bridges and ancillary works in Ch.51300 to 55850 on Panihar - Mohana section of Phase II was awarded to a contractor (GS-15) in January 1991 with the date of completion before August 1992. The work could not be completed in time mainly due to non-availability of forest land the possession of which was taken in December 1994. After the land was made available, no work was done by the contractor as he was seeking extension which was granted to him up to January 1996. The balance work was, therefore, got completed through another contract. Thus the delay in getting the land transferred from forest department further compounded with inefficient contract management delayed the completion of the work by 4 years.

5.4.3    Injudicious decision to change the slope of earthwork formation resulted in extra expenditure of Rs.0.73 crore

As per Railway Board's directives of April 1990, Railways should take borings at sufficiently close intervals so that quality of different types of soil and rock in cuttings could be assessed correctly and variations between contracted quantity of work and quantity executed is kept to the bare minimum. The quantity of earth work in soil and cuttings in Panihar-Mohana and Mohana-Khajuri sections was assessed and a slope of 1/2:1 was specified after conducting borings at a number of places. CAO inspected the sites after floating tenders for the work but before award of the contracts and issued instruction for adopting slope of 1/4:1 depending on the strata encountered during execution. Four Contracts for earthwork in formation, construction of bridges and ancillary works on Panihar - Mohana section were awarded in August 1995 (Sections 11-B, 11-C) and September 1995 (Sections 11-D and 11-E).

Keeping in view the variation likely to occur due to changed slopes, a clause for variation in scheduled quantities up to + 40 per cent was provided in all the contracts instead of the normal variation of +25 per cent. However, the scheduled quantities provided in contracts were also reduced in October/ November 1995 after award of the contracts based on the slope of 1/4:1. During execution, it was found that the revised slopes of 1/4:1 being provided in the cuttings were not stable and considered as source of hazard when the section would be opened to traffic. Therefore, in August 1996, the CAO decided to revert to the slopes of 1/2:1 with provision of appropriate berms.

A review in audit revealed that by reverting to the slope of 1/2:1, the quantum of work increased even beyond 40 per cent provided in the revised schedule of work and contractors demanded higher rates for the increased work. The negotiations with contractors for carrying out the additional quantities of works failed and Railway Administration awarded fresh contracts for carrying out the additional work. The works were completed at higher rates involving extra expenditure of Rs.0.73 crore.

Railway Administration's decision to reduce the quantities of work assuming a slope of 1/4:1 was injudicious as a clause for variation of scheduled quantities up to +40 per cent was incorporated to take care of the likely increase/decrease in quantum of work. This resulted in avoidable extra expenditure of Rs.0.73 crore.

5.4.4    Non-recovery of Risk and Cost from the contractor

16 contracts were terminated at the risk and cost of the contractors and the balance work was got executed by awarding fresh contracts. The Railway Administration had worked out an amount of Rs.1.27 crore as recoverable from the defaulting contractors on account of extra expenditure incurred for completion of the works. This amount was still not recovered though the works were completed between 1990 and 1998.

5.4.5    Loss amounting to Rs.0.47 crore on account of arbitration award against the Railway Administration

Five contracts were terminated due to slow progress and non completion of the works even after extended periods of completions and the balance works were got completed at risk and cost of contractors. These contractors filed counter claims amounting to Rs.2.65 crore as against the amount of Rs.27.36 lakh recoverable from them on account of risk and cost charges. As the Railway Administration could not resolve the claims, the cases were referred to Arbitration. In Three cases the Arbitrators decided in favour of the contractors and asked Railway Administration to pay Rs.15.11 lakh. Railway Administration, however, did not comply with the Arbitrators orders immediately and had to pay an amount of Rs.4.74 lakh on account of interest for the period of delay. Railway Administration's poor contract management resulted in loss of Rs.0.47 crore. The loss could further increase if the remaining two cases are also decided in favour of the contractors.

(Annexure XXXII)

5.4.6    Non-finalisation of large number of contracts

About 63 contracts were still outstanding for finalisation though the works were physically completed between January 1989 and January 1999. Railway Administration could not finalise these contracts as final variation statements in majority of cases have not been prepared. This is in contravention to Railway Boards orders for finalising the contracts within 18 months of completion of works. This indicates failure of the executives and also bad contract management by the executives.

5.5    Delay in drawal of Completion Report

Though the work of Guna - Shivpuri (Phase I) was completed and line opened to traffic in Feb'91 and handed over to Bhopal division, the completion report for Phase I has not been drawn as yet. Similarly the work of Phase II was physically completed and section was opened to traffic in March'99, no action has been taken to draw completion report (August 2002).

6.    Material Management

The Indian Railway code for Engineering department provides that material obtained for a new project is kept outside the accounts of any other category of stores. Such material may be obtained either from stores or by purchase or transfer and charged to the work concerned. All the receipts and issue of material is controlled through a suspense account "Material at Site" (MAS) account in which procurement, actual consumption and balances are shown. The adjustment from the MAS suspense to the relevant final detailed heads should be carried out as soon as the materials are drawn and shown as having been issued to the work. At the end of every financial year the Accounts Officer should prepare a schedule of MAS balances on the various works and should review it in consultation with the Executive. If the 'excess materials' cannot be utilised on some other works, they should either be returned to Stores Depot or taken to Engineering Stores Surplus. On a review of MAS account of Guna - Etawah New BG line (Phase I and II), the following discrepancies have been noticed:

6.1    MAS accounts maintained in respect of Phase I and II revealed that huge balances of Permanent Way and Non Permanent Way material as given below were outstanding as on 31 March 2002 despite the fact that store depots of these Phases have since been closed as the work was physically completed in February 1991 and March 1999 for Phase I and II respectively:

(Amount in Rupees)
Phase Permanent Way Material Non- Permanent Way Material Total
I 1,31,53,703 1,67,27,582 2,98,81,285
II 11,05,55,722 (-) 7,65,894 10,97,89,828
Total 12,37,09,425 1,59,61,688 13,96,71,113

High balances appearing under MAS Account even after closure of stores and completion of works need to be investigated.

6.2    Avoidable expenditure on transport of Permanent Way material

Against Railway Board's contract of September 1991, Chief Engineer(C) placed an order on the supplier firm (October 1991) to supply 2400 MT of CST-9 sleeper plates to Depot Store Keeper (C) [DSK (C)], Gwalior. This material was required for use on Shivpuri - Khajuri New BG Line. In June 1992, the consignee was changed and the supplier was asked to supply the CST-9 plates to DSK(C) Shivpuri. Out of the ordered quantity of 2400 MT, firm could supply 320.922 MT of CST-9 plates till March 1993 when the work of Shivpuri - Khajuri section was physically completed by obtaining the CST-9 plates from other sources. The balance quantity of 2069.255 MT of CST-9 plates was supplied by the firm from April 1993 to February 1994. As the work for which the material was required had already been completed, Railway Administration transported the material from Shivpuri to Gwalior through the agency of contract and incurred expenditure of Rs.22.84 lakh.

As CST-9 plates required for Shivpuri-Khajuri section were not supplied by the firm in time before the completion of the work, Railway Administration failed to take necessary corrective action to change the consignee suitably to avoid re-transportation of the same. This resulted in avoidable expenditure of Rs.0.23 crore.

6.3    Loss of Rs.1.17 crore due to misappropriation of materials

Rules provide for receipt, issue, proper accountal and verification of materials for work held in the custody of subordinates. Departmental stock verification of stores balances should be carried out by actual count of at least 1/6th of the stock every month so that the entire balance can be verified in six month period. No material should be issued without the authority of Issue Notes. One copy of the Issue Notes should be verified by the receiver in token of having received the material and returned to the Issuing Officer.

During Audit scrutiny of records of Store Supervisor (C), Gwalior it was noticed that a narrative report indicating loss of Railway material amounting to Rs.1.17 crore was issued on 31 March 1999 by SAO(C) JHS after verification of store. The report pointed out number of procedural irregularities/ lapses such as issue of material without proper Issue Notes, issue of material without any demand from the others side, issue of material on false challans etc. In May 1999, DyCE(C) Gwalior after investigating the matter charge-sheeted (SF-5) Shri J.N.Shukla, SS(C), GWL ordering an enquiry against him and he was held responsible for loss of Railway materials worth Rs.1.07 crore. "Penalty of removal from service with immediate effect" was imposed on the official vide Dy.C.E. (C), GWL's order in October 2000 (actually served on 4 November 2000). The official had appealed to CE(C)/CSTM in December 2000 which was still pending (June 2002).

In this connection, the following observations are made:

  1. Railway material should be issued on receipt of proper requisition from indenting officer and acknowledgement of the material having been received should be obtained and kept on records. This procedure was not followed by SS(C), GWL.
  2. Adequate departmental verification and stock verification as required under the codal provisions were not conducted.
  3. Material should be issued by the person in-charge of the depot only with the prior approval of the competent authority. But the same was not adhered to by SS(C), GWL.

Non- adherence to set procedure regarding issue, accountal and verification of Railway material by the concerned authorities had led to loss of Rs.1.17 crore to the Railway Administration.

7.    Conclusion

Railway Administration knowing that the rate of return from the entire project was meagre and the project being unremunerative at the stage of Preliminary Engineering cum Traffic Survey itself, took up this work on urgency certificate for which no justification existed. Due to delays in acquiring the land and consequential delay in related contracts of earthworks, bridges etc., the Phase II could not be completed within the time schedule fixed. The execution of the contracts was also delayed due to inadequate survey and incorrect estimation of the quantities of work which had resulted in huge variation in quantities executed and delay in finalisation of drawing and design. Though works in Phase I were completed within the target date, train service could not be run in this section for two years due to poor quality of work. Even in Phase II train services were not run in Gwalior-Panihar and Panihar-Mohana sections and for fairly considerable period of 2.5 years. The expenditure booked till March 2002 on Phase I and II was Rs.52.41crore and Rs.148.02 crore respectively which was far in excess of the estimated cost sanctioned. As a large number of contracts are yet to be finalised and completion reports have to be drawn, final cost may increase further.