Coal Movement on Indian Railways

3.1    Introduction

Transportation of coal forms a significant part of the total traffic on the Indian Railways as compared to other commodities in terms of tonnage of loading and the revenue earnings. Transportation of coal to the extent of 235.85 million tonne during the year 2002-2003 constituted 45.46 per cent of the total traffic carried by Indian Railways in terms of volume and Rs.11480.79 crore (43.31 per cent) in terms of total revenue earnings.

There are about 117 stations serving 227 coal loading points/ sidings situated over Indian Railways from where coal is loaded and transported to different destinations. Coal of improved quality is also imported from foreign countries and loaded from 11 sidings over Indian Railways and transported mainly to various steel plants. The Railways carry coal to about 208 unloading points/ sidings. About 60 Thermal Power Plants/ Power Houses, 12 Steel Plants and 55 Cement factories which are major consumers of coal, receive coal by rail.

3.2    Highlights

The changes in freight tariff structure through the annual budgetary exercises failed to increase the Railways’ share in transportation of coal.

Concession of 25 per cent introduced with effect from 1 April 1999 on short lead traffic failed to bring in additional revenue in four routes out of five short distance routes test checked.

Test check of four middle distance routes (108-402 kms.) revealed scope for capturing coal traffic moving by road which could have yielded additional revenue of Rs.60.37 crore during the review period.

(Para 3.6 & 3.7)

Railways could have earned Rs.35.51 crore during the year 2002-03 if open hopper wagons were deployed for transporting coal to five of the unloading points test checked as these wagons save a substantial amount of time on unloading operations.

(Para 3.8.1)

Failure to conduct time and motion studies and reduce the allowed free time in 15 mechanised loading points and three mechanised unloading points led to avoidable grant of excess time and loss of earning capacity to the tune of Rs.86.38 crore during the year 2002-03.

(Para 3.9.2)

During the year 2002-03, the excess time taken beyond the free time allowed at 36 loading points resulted in loss of earning capacity of wagons to the extent of Rs.226.65 crore of which highest amount (Rs.180.49 crore) was on Eastern Railway. Similarly, there was loss of earning capacity of Rs.175.10 crore at 31 unloading points of which highest amount (Rs.80.66 crore) was on Eastern Railway.

(Para 3.10.1)

Levy of penal freight to minimise the overloading was not acting as a deterrent and cases of overloading was found in 20 out of the 22 sidings test checked. At Junadih Line No.4, Korba loading point all the wagons weighed were found overloaded.

(Para 3.10.3)

Diversion of coal rakes and non-issue of Supersessional Railway Receipts (SRRs) was a common feature on Eastern and South Eastern Railways.

494 diversion cases of coal rakes were found in respect of six loading points test checked on South Eastern Railway during the period 1 April 2002 to 31 March 2003.

134 diversion cases of coal rakes were found in respect of five loading points test checked on Eastern Railway during the period 1 April 2002 to 31 March 2003. Freight outstanding on account of non-issue of SRRs as assessed was to the tune of Rs.20.24 crore.

(Para 3.10.4)

13794 wagons were hauled in empty condition in loaded Closed Circuit (CC) rakes and Non-CC rakes from the loading points test checked during the year 2002-03 on account of their rejection by the siding holders as unfit for coal loading. The loss of freight works out to Rs.27.37 crore.

(Para 3.11.1 & 3.11.2)

Waiving of demurrage charges has become a routine practice in the Railways defeating the very purpose of assessing and levying them. The extent of waival also was far above limits considered as reasonable. An amount of Rs.361.11 crore was leviable as demurrage charges during the period 1998-99 to 2002-03 in sidings test checked of which an amount of Rs.153.22 crore was waived beyond the permissible limits. A sum of Rs.49.65 crore was waived in excess of limits in Eastern Railway alone.

(Para 3.12.1)

Non-realisation of earnings from coal transportation is a serious matter and has not received the attention that it deserves. The outstanding amount from State Electricity Boards/ Power Houses has steadily risen from Rs.1139.91 crore as on 31 March 1999 to Rs.1753.87 crore as on 31 March 2003. Out of the outstanding as on 31 March 2003, a sum of Rs.966.63 crore was due from Badarpur Thermal Power Station managed by the National Thermal Power Corporation.

(Para 3.12.2)

3.3    Organisational structure

Policy matters governing the movement of coal, fixation of target of loading to be achieved by Zonal Railways etc. are dealt with by Traffic Transportation Directorate of Railway Board under the Member (Traffic), Railway Board who is assisted by an Executive Director.

At Zonal Headquarters' level Chief Operating Manager is responsible for monitoring the operations of train movements, Chief Commercial Manager is responsible for fixation of various charges for Coal sidings and the Financial Adviser and Chief Accounts Officer for ensuring collection of freight and other charges.

At Divisional level, Senior Divisional Operating Manager, Senior Divisional Commercial Manager and Senior Divisional Accounts Officer respectively are responsible for operation and movement of coal rakes, implementation of Headquarters' instructions on the subject and realisation/collection of freight and other charges as fixed by the Headquarters.

3.4    Scope of review

The review broadly covers the following areas :-

  • Coal production, despatch and Railway’s share in its transportation.
  • Indian Railways’ coal traffic achievements versus projections and impact of annual budgetary exercise on Railways share in coal transportation.
  • Availability of rolling stock and performance of improved freight stock.
  • Impact of modernisation of infrastructure at coal loading and unloading points.
  • Operational efficiency at coal loading and unloading points.
  • Efficiency in revenue realisation.

The review covers the period from 1998-99 to 2002-03. However, in respect of certain areas, the period has been restricted to the year 2002-03.

3.5    Sample size  (The number of Zonal Railways has been taken as 9 based on the jurisdiction prior to re-organisation of Zonal Railways made with effect from 1 October 2002 and 1 April 2003.)

A macro review of coal loading, net tonne kilometres (NTKMs) and revenue earnings for the period 1998-99 to 2002-03 was carried out from the records available at Railway Board and Ministry of Coal.

At micro level, test check at loading points, unloading points was carried out as detailed below:

  1. Loading of indigenous coal is mostly done in sidings served by stations on five Zonal Railways (Central, Eastern, Southern, South Central and South Eastern). 26 serving stations (with a minimum of five on each) and 69 loading points/ sidings served by them on these Railways were selected. In addition, eight serving stations and nine loading points/ sidings on Northeast Frontier and Western Railways were selected (Annexure XIX).
  2. 19 Thermal Power Plants, seven Steel Plants, 11 Cement Factories, two Fertiliser Plants and one Port siding which represent a minimum of five unloading points on each zonal Railway were selected except North Eastern and Northeast Frontier Railways where one Thermal Power Plant on each Railway was selected (Annexure XIX).
  3. Five short distance routes between loading - unloading points in Central, Eastern, Southern, South Central and South Eastern Railways were selected to examine the impact of Railways efforts to capture short lead traffic.

3.6    Coal production, desptatch and Railways’ share in its transportation

All India figures of coal production (excluding Meghalaya Coal) during 1998-99 to 2002-03 were as follows:

(In million tonnes)
Year Production
1998-1999 292.27
1999-2000 299.97
2000-2001 309.63
2001-2002 322.64
2002-03 (April to December - provisional) 239.76

Source : Annexure IX -Annual Report 2002-03- Ministry of Coal

To bridge the gap between the requirement and indigenous availability and to improve the quality of overall blend for technological reasons, coking coal is mainly being imported by Steel Authority of India Limited and other Steel sector.

3.6.1    Despatch of coal

Keeping in view the requirement of Power and Cement sectors in terms of quantity and quality of coal, the available capacity for production of coal and the available modes of transport, linkages are drawn up by Standing Linkages Committee (Long term) and Standing Linkages Committee (Short term). These Committees are represented by the representatives from the Ministry of Power, Ministry of Industries, Central Electricity Authority, Coal India Limited (CIL) etc. functioning under the Chairmanship of Additional Secretary, Ministry of Coal. Supply of coking coal to Steel Plants is made by the coal companies themselves on the basis of linkages established by a competent linkage Committee.

Major sector-wise despatch of Coal during the period from 1998-99 to 2002-03 was as follows:

(In million tonnes)
Sector Year
1998-99 1999-00 2000-01 2001-02 2002-03 (April to
December -provisional)
Power Houses 204.68 222.63 234.60 242.76 189.36
Steel Plants and Cokeries (raw coking coal) 24.98 21.40 19.98 20.28 19.30
Cement Plants 8.61 9.50 10.33 11.85 9.52
Fertilizer Plants 4.11 3.37 3.18 3.20 1.19
Others 46.20 47.49 47.52 47.72 26.00
Total 288.58 304.39 315.61 325.81 245.37

Source : Annexure X -Annual Report 2002-03- Ministry of Coal.

Important modes of transportation of coal are Railways, Road, Merry-go-Round (MGR) System, Conveyor Belt and the Rail-cum-Sea Route. The share of these modes of transport in the total movement of coal was approximately as under:

(In percentage)
(a) Railways 53.0
(b) Road 14.0
(c) MGR System 22.1
(d) Others (Conveyor Belt, Rail-cum-Sea Route etc.) 10.9
Total 100.0

Source: Annual Report 2002-03 - Ministry of Coal

About 85 per cent of the total coal production in the country comes from the collieries of CIL. The percentage of Railways share vis-a-vis Road/ MGR and others in transportation of coal produced by CIL during the period 1998-99 to 2002-03 was as under:

(In million tonnes)
Mode 1998-99 1999-00 2000-01 2001-02 2002-03
Tonnage Per centage Tonnage Per-centage Tonnage Per- centage Tonnage Per- centage Tonnage Per centage
Rail 148.19 60.38 156.09 60.46 161.71 60.02 166.47 60.01 167.82 58.91
Road 29.54 12.04 30.23 11.71 31.06 11.53 32.1 11.57 36.48 12.90
MGR & Others 67.71 27.58 71.83 27.83 76.64 28.45 78.82 28.42 80.03 28.19
Total 245.44 100.00 258.15 100.00 269.41 100.00 277.39 100.00 284.33 100.00

Source: Marketing Manager, CIL, Kolkata.

Review of the performance of wagon coal loading on Indian Railways during the year 2002-03 revealed that there was scope for increasing the share of Railways in coal transportation. The Railway was not able to load coal to the extent offered by the CIL. The average figures of offer and loading are given below:

(Wagons in Four Wheeler Units/ day)
Particulars CIL Non-CIL Total
Offer 21120 6858 27978
Loading 19281 6950 26231
Excess/ shortfall in loading -1839 92 -1747

On an average the wagon loading on Eastern Railway was to the extent of 8048 wagons/ day against the offer of 9488 wagons/ day i.e. a major shortfall in loading of 1440 wagons/ day followed by South Eastern Railway where the loading was 12006 wagons/ day against the offer of 12303 wagons/ day i.e. a shortfall in loading of 297 wagons/ day.

In the following paragraphs Audit has attempted to review Railways’ performance in various areas of coal transportation and identify areas where there was scope for improvement which could result in capturing a larger share in coal transportation.

3.7    Indian Railways’ coal traffic projections and achievements

As a part of the annual budget exercise, Indian Railways draw up targets for coal loading, the NTKMs to be achieved and the revenue to be earned therefrom. These projections are based on the Railways’ performance in the previous year, the anticipated growth in the coal sector, the freight tariff structure etc. The performance of the Railways vis-ŕ-vis the budget projections and the impact of the changes made in the freight tariff structure on achievements of the budgeted projections are depicted and discussed below.

Year Budgeted/ Revised/ Actual Tonnage Originating
(in million)
(in million)
Earnings (Rupees in
1997-98 Budgeted 205.00 125118 8501.00
  Revised 209.50 128929 8779.03
  Actual 208.75 127515 9245.03
1998-99 Budgeted 218.00 137340 9489.00
  Revised 201.50 123922 9481.68
  Actual 197.60 121779 9050.50
1999-00 Budgeted 214.00 133750 10395.08
  Revised 211.00 127734 10079.86
  Actual 209.96 126771 9929.82
2000-01 Budgeted 221.50 133731 10627.70
  Revised 223.00 129558 10418.76
  Actual 223.69 133444 10552.16
2001-02 Budgeted 234.50 134628 11173.06
  Revised 227.30 135307 11032.52
  Actual 229.82 141091 11241.32
2002-03 Budgeted 232.50 137386 11433.37
  Revised 235.00 140003 11440.74
  Actual 235.85 141724 11480.79

During the year 1998-99 to 2002-03, the following changes in freight rates were made which had direct impact on the loading and earnings from coal traffic.

Adjustment in freight rates for coal over shorter distances was made, the increase being in the range of about two per cent for different distances upto 500 Kms. There was no increase beyond 500 Kms. upto 1500 Kms. but there was a reduction of one per cent beyond 1500 Kms. To make the freight rates more attractive over middle and long distances, the taper of rates for coal were so adjusted that the rates would reduce at longer distances, by about one to two per cent. It was expected that this would not only give a boost to the core sector, but also enable this sector to offer more traffic. From the performance figures shown in the table above, it can be seen that the strategy of making adjustment in freight rate with the expectation of attracting more traffic failed completely. The Railways failed to achieve the projected originating tonnage, NTKM and revenue earnings compelling them to make downward revision in the Revised Estimates. Even the revised targets were not achieved. In fact the achievements were lower than that of last year.
The freight rates were increased by four per cent on all commodities including coal. The classification for charge in respect of Washed coal was so adjusted that increase was by one step only. Based on representations from the trade to reduce the burden of idle freight on short lead traffic, which was charged for a minimum of 100 Kms., a concession of 25 per cent was allowed in the freight rate for traffic hauled for distances upto 50 km. Though the performance was better in comparison to the previous year, the originating tonnage, NTKMs and earnings were less than the Budget Estimates and the lowered targets of the Revised Estimates. Despite giving concession for short lead traffic, the Railways could not even regain the NTKMs position of the year 1997-98. A test check of five short distance routes between loading-unloading points was carried out to see the impact of extending the concession of 25 per cent allowed in the freight rate for traffic hauled for distances upto 50 kms. In two routes (Chennai Harbour/ Port (Attipattu) to Ennore Thermal Power Station on Southern Railway and Colliery (Pit Head) to Bhajudih coal washery on South Eastern Railway) out of five routes test checked, Railways already had 100 per cent share of coal traffic moving on these routes. The concession therefore only benefited the trade and did not help the Railways in increasing their loading or revenue earnings. On the contrary, the earnings only reduced due to the concession and reduced coal loading on these routes in comparison to the earnings from these routes in the year 1998-99. Out of the remaining three routes, in one route (Ghugus Colliery to New Thermal Power Station, Chandrapur on Central Railway) despite increase in loading over the previous year (1998-99) the revenue earnings actually reduced and percentage share of the Railway remained more or less same which is a clear indication that offering the concession was not in Railway’s interest. In respect of route on Eastern Railway (Colliery - Pit Head to Patherdih Coal washery), the Railway’s share did increase from 76.16 per cent to 98.95 per cent, but as a combined result of reduced availability of coal for transportation and concessional tariff, the earnings were on continuous decline. Only on route in South Central Railway (Rudrampur siding to Kothagudem Thermal Power Station), there was an increase in loading and in earnings. [Annexure XX(a)]
A general increase of five per cent in the rates of all commodities except essential commodities was proposed. However, with a view to encourage higher industrial growth, the increase of five per cent was contained to less than five per cent in respect of coal (a core sector commodity) by down grading the classification. The performance was more or less as per expectations in regard to the originating tonnage and NTKMs. However, the actual earnings fell short of Budget Estimates by Rs.75.54 crore.
The freight rates for coal (not meant for household consumption) were increased by two per cent. The performance was more or less as per expectations.
Marginal increase in freight rates of coal was enforced due to rationalisation of freight structure. The Railways were able to achieve the projected targets in terms of originating tonnage and earnings. It however, came to notice that the average lead for coal traffic, which was 614 kms in 2001-02, had decreased to 601 kms in 2002-03. Thus, while the Railways were able to bring in additional coal traffic, they had actually suffered loss of long lead traffic at the cost of short lead traffic.

An analysis of data relating to Railway’s share in coal transportation (Para 3.6) and the results of the annual budgetary exercise of the Indian Railway clearly reveal that the increase in originating tonnage of coal transported by rail was directly related to the increase in coal production by the collieries and the increase in revenue earnings of the Railways were due to the tariff revisions. The annual budgetary exercise of the Railways failed to increase Railway’s share in coal transportation. On the other hand, the share has marginally reduced in favour of Road, Merry-Go-Round System and others. Thus, there was no clear focus in the Railway Budget to aim at replacing other modes of transport, especially road transportation of coal.

A micro study of coal carried in certain other routes was also carried out by Audit to examine the impact of Railways effort to capture the coal traffic moving by road. The findings are discussed below:

Review of four other points revealed that from one point (Bhajudih coal washery, Santaldih) the Railway’s share of coal transportation was nil and on another point (Ambuja Cement Company Limited Siding, Bhatapara), the Railway’s share was on declining trend and the traffic was only 4.17 per cent in 2002-03. Out of remaining two points, on one point (Larcen & Toubro Cement Plant, Juturu on South Central Railway) though Railway’s share of coal transportation was 100 per cent during the year 1998-99 to 2000-01, it suddenly declined to 37.85 per cent in 2001-02 and further went down to 12.23 per cent in the year 2002-03. The coal transportation by rail in respect of Mejia Thermal Power Station on Eastern Railway only was on increasing trend. Though the distance traversed from collieries/ washeries to these points was considerable and ranged between 108 and 402 kms., road transportation was being preferred/ resorted to. Railway Administration did not try to find out the reasons for coal transportation by road. Had the Railways been able to capture the total coal traffic moving by road, they could have earned Rs.60.37 crore more during 1998-99 to 2002-03 [Annexure XX(b)].

A test check of one unloading point Chandrapura Thermal Power Station (CTPS) on Eastern Railway where coal was being received from other sources also revealed that 18.14 lakh metric tonnes of coal were transported by road and 19.75 lakh metric tonnes by rail. Though the distance travelled was 17 Kms., the freight was being charged for the distance of 60 Kms. from Katrasgarh to CTPS via Gomoh, as per the distance table effective from January 1995. Since the actual distance travelled was only 17 kms., and attracted 25 per cent concession with effect from April 1999, a review and correction of the freight charges being levied could have attracted the coal traffic which is moving by road. Audit assessed the possible additional revenue earnings at about 8.99 crore for the period 1999-2000 to 2002-03.

Efforts to improve the performance in coal transportation through other means like increasing and improving the Rolling Stock, upgrading and modernising infrastructure at coal loading and unloading points, improving operational efficiency in transportation of coal were also studied by Audit. The findings are discussed below.

3.8    Rolling Stock

High sided bogies open wagons namely BOX ‘N’, BOX and open Hopper wagons with bottom discharge arrangement namely BOBS, BOBX, BOBR etc. are mainly used for transportation of bulk commodities like coal, iron ore etc. Since Coal transportation by rail constitutes nearly 45.46 per cent of the total traffic in terms of volume, the importance of adequate availability of these wagons with the Railways cannot be over emphasised. To generate adequate rail transport capacity for handling additional freight traffic, the Indian Railways had proposed to introduce new types of wagons in place of conventional type of wagons. Four wheeler stock was to be phased out and replaced with higher capacity roller bearing 8 wheeler stock and pay load to tare ratio of wagons was to be improved by increasing axle load.

The authorised stock of High-sided open bogie wagons on Indian Railway during the years 1998-99 to 2002-03 was as follows:

Year Units available at the end of the year
BOX BOXN Open Hopper wagons
with bottom discharge
Total Percentage of
Open Hopper wagons to Total
1998-99 25351 55483 6159 86993 7.08
1999-00 21650 59204 6089 86943 7.00
2000-01 16446 62523 6783 85752 7.91
2001-02 14610 64687 7299 86596 8.43
2002-03 13586 66142 8766 88494 9.91

In addition, 301 BOXNHA wagons were procured which were got manufactured based on a design developed by RDSO.

3.8.1    Technological upgradation of wagons

Technological upgradation of the wagons not only help in improving axle load, speed and pay load to tare ratio and increasing the freight traffic but also in effecting substantial reduction in operational and maintenance costs.

  • In 1983, Railway Board approved the development of design of Bogie Open Rapid Bottom Hopper wagon for transportation of coal from coal fields to nominated thermal power plants. The main feature of this Hopper wagon was the automatic rapid discharge of coal rakes (within two-three hours) with the help of electro-pneumatic operation of the bottom doors, facilitating quick and complete discharge. Before introduction of these Hopper wagons (1986), coal was being largely carried in BOX ‘N’ wagons for which time permitted was 11 hours in manual unloading and 10 hours in mechanical unloading for a rake of 58 wagons.

Review in audit of the performance of unloading during the year 2002-03 at five unloading points where BOXN and open hopper wagons were being run revealed that difference in average time taken in unloading of one rake of BOXN wagons and one rake of hopper wagons was 9.27 hours at New Thermal Power Station, Chandarpur (Central Railway), 16.56 hours at Calcutta Electric Supply Corporation, Budge Budge (Eastern Railway), 9.15 hours at National Thermal Power Corporation, Unchahar (Northern Railway), 9.05 hours at Kothagudem Thermal Power Station, Gajulagudem (South Central Railway) and 22 hours at Kolaghat Thermal Power Plant, Mecheda (South Eastern Railway). The highest difference in time taken (22 hours) was at unloading point on South Eastern Railway (Annexure XXI).

Despite the big difference in average time of unloading of these wagons and the advantages accruing in terms of reduced detention and improved turn round time, it was noticed that during the period 1998-99 to 2002-03, out of the total number of rakes unloaded in these points, the percentage share of rakes consisting of open hopper wagons was 45.23 only. The percentage share of deployment of these rakes was lowest at unloading point of Eastern Railway (28.34) (Annexure XXI).

Further, at unloading point of South Central Railway, the deployment of open hopper rakes was on decline vis-ŕ-vis BOXN wagons rakes. The number of open hopper rakes (790) deployed in 1998-99 came down to 486 in the year 2002-03 while the number of BOXN rakes deployed increased from 719 in 1998-99 to 1349 in 2002-03.

In this context, it is relevant to note that authorised stock of open hopper wagons was only to the extent of 9.91 per cent of the total stock of High sided open bogie wagons as on 31 March 2003 (refer para 3.8). Had the Railway Administration increased their stock of hopper wagons and used them for transporting coal, they could have achieved better turn round time and increased their coal earnings figures. Audit attempted an assessment of the possible earnings that could have accrued to the Railways on the selected unloading points by taking into account the savings in unloading time by using hopper wagons and found that an amount of Rs.35.51 crore could have been earned during the year 2002-03 (Annexure XXI).

  • BOXNHA wagons with the speed potential of 100 kmph, higher axle load of 22.1 tonnes for coal loading and higher payload of 65.13 tonnes were designed with the help of Research Designs and Standard Organisation (RDSO). With the introduction of BOXNHA wagons payload per rake was to increase to 3783 tonnes as against 3411 tonnes in the existing BOXN wagons resulting in 11 per cent increase in throughput per rake. Railway Board procured five rakes (301 BOXNHA wagons) at a total cost of Rs.32.66 crore between November 1999 and March 2000.

Scrutiny in audit revealed that the wagons could not run at the expected higher speed with high axle load as the existing track structure/ infrastructure did not permit such speed and load. Therefore, Railway Board in their order dated 23 May 2001 reduced maximum load to be carried by these wagons to 60.1 tonne for all commodities having Carrying Capacity (CC) weight condition. Fixing of reduced weight condition by the Railway Board thus defeated the very purpose of introduction of such upgraded wagons. A comment on this was made in para 4.2.1 of Railway Audit Report No.8 of 2003. A further review in this regard revealed that though all the five rakes were put in use in May 2001, they were withdrawn from traffic and stabled at Mughalsarai from 26 April 2002 to 7 June 2002 for want of Headquarter’s permission for running. One rake was again stabled from 10 February 2003 till date (November 2003) due to all wagons being sick in the rake. It was further noticed, that the existing track structure being inferior to the standards specified for BOXNHA wagons, these wagons could not be run at the stipulated speed of 100 kmph. These wagons were cleared for speed of 100 kmph only in Dhanbad-Gomoh and Sonnagar-Mughalsarai sections of Gomoh-Gaya-Mughalsarai section on Eastern Railway. Even on Mughalsarai - Dehri-on-son sections where these rakes were cleared for 100 kmph, it was seen that average speed of these rakes was not exceeding 68.91 kmph in UP direction and 78.57 kmph in DN direction.

Thus Railways efforts to introduce high speed wagons with higher axle load and payload have not met with success. This type of wagons manufactured and put on line based on design developed by RDSO have been kept stabled for major part of the period of review or have been put to use with lesser payload and running speed defeating the very purpose of their introduction.

3.9    Modernisation of coal handling at loading/ unloading points

Efficiency of terminal operations constitutes one of the most important parameters of asset utilisation of Railway. It was estimated in the Ninth Plan document that the terminal detention constitutes nearly one-third of the total detention of rolling stock. Minimisation of detention time to increase the wagon turn round by means of mechanical handling devices was proposed as a need to increase efficiency and improve services to the customers.

3.9.1    A review in Audit revealed that 26 sidings/ loading points still continue to have manual loading facility. Of these, 17 sidings/ loading points are on Eastern Railway alone. There are 208 unloading points/ sidings for unloading of coal over Indian Railways. In 83, unloading was done manually and in 125 facility for mechanical/ mechanised system of unloading (tippler) was available. Railway should pursue with the siding holders to provide the mechanised system of loading and unloading (tippler) to enable them to utilise the rolling stock more efficiently.

3.9.2    Railway Administration should carry out time and motion studies as soon as mechanised facilities for loading/ unloading are introduced and stabilised. The existing free time limits for loading and unloading operations should be reduced based on the time and motion studies.

Test check revealed that on 15 sidings/ loading points where the mechanised system was introduced prior to 1998, the actual time taken for loading of rakes was less than the permitted time. Non-conducting of time and motion studies to revise the permissible free time after the introduction of mechanised system at loading points resulted in loss of earning capacity of Rs.70.62 crore during the year 2002-03 [Annexure XXII(a)].

Similar, review in this regard revealed that on three sidings/ unloading points on three Railways where the mechanised system was introduced prior to 1998, the actual time taken for unloading of rakes was less than the permitted time. Non-conducting of time and motion studies to revise the permissible free time after the introduction of mechanised system at unloading points resulted in loss of earning capacity of Rs.15.76 crore during the year 2002-03 [Annexure XXII(b)].

3.9.3    A further scrutiny of loading/ unloading operations at Vizag Port revealed that as per agreement with the Port Trust Railway, for consistent good performance by way of availing lesser time than free time allowed, an incentive is given to the Port Trust Authorities in the form of credit hours which would go towards reducing the hire charges for Rolling Stock used by them.

A review of the position for one year revealed that in most of the months credit hours were earned by the Port Trust Railway, Vizag resulting in less hire charges to the Railway Administration. It was also noticed that the allowed free time was fixed as long back in 1983 whereas there was a considerable increase in the operational efficiency due to modernisation of the infrastructure at the Vizag Port. The Railway Administration should consider revision of the required free time taking note of the modernisation of infrastructure.

3.10    Operational efficiency in the transportation of coal

3.10.1    Detention to rolling stock at loading/unloading points

Detention to Rolling Stock at loading and unloading points also occur due to Railway’s inefficiency in providing power for placing the rakes for loading and for removing the empties after unloading, inadequate capacity in the sidings to load/ unload full rakes, bunching of rakes etc. The Railway Administration has taken various steps to minimise the detention of rakes. Despite the steps taken by the Railway Administration several instances of detention of rakes at both coal loading and unloading point were noticed by Audit.

Loading Points

Test check revealed that on 36 loading points (six each on Central and Northeast Frontier, seven each on Eastern, South Central, South Eastern and three on Western Railways) 22,97,950 wagons (four-wheeler) were detained during the year 2002-03 beyond permissible time limits. The excess time taken by these wagons worked out to 17,07,378 wagons days resulting in loss of earning capacity to the tune of Rs.226.65 crore. On Eastern Railway, the number of wagon days lost (14,05,195) and loss of earning capacity (Rs.180.49 crore) was highest amongst all the Railways (Annexure XXIII). The detention at the following loading points was alarming and requires attention by the Railways.

Railway Name of loading points/ sidings/ stations No. of wagon days lost
Eastern Andal 443990
Katrasgarh 379465
Patherdih 261870
Ray Churi Monkey and Bachra 156020
KD Heslong 111505
South Central Godavari Khani Incline No.1 49169
Strutt Pit siding/ Singareni Collieries 42339

Unloading Points

Similar test check revealed that at 31 unloading points (three each on Central and Western, five each on Southern and South Central, four each on Eastern and Northern, one on North Eastern and six on South Eastern Railways) that 20,17,916 wagons (four wheeler) were detained during the year 2002-03 beyond the permissible free time allowed for unloading. The excess time taken by these wagons worked out to 11,57,514 wagon days resulting in loss of earning capacity of Rs.175.10 crore. On Eastern Railway, the number of wagon days lost (6,28,140) and loss of earning capacity (Rs.80.66 crore) on account of detention was highest amongst all the Railways (Annexure XXIV).

The detention on following unloading points was very high and requires attention by the Railways:

Sl. No. Railway Name of the unloading point Number of wagon
days lost
1. Central New Thermal Power Station, Chandrapur Uttar Pradesh Electricity Board, Paricha 46885 29191
2. Eastern Durgapur Steel Exchange Yard, Durgapur 474730
Calcutta Electric supply Corporation, Budge Budge 65250
Bandel Thermal Power Station 62930
Chanderpur Thermal Power Station 25230
3. South Central Kothagudam Thermal Power Station 61870
Rayalaseema Thermal Power Station 38596
Jindal Vijayanagar Steel 23068
4. South Eastern Kolaghat Thermal Power 85895
Bhajudih Washery 27574
5 Western Wanakbori Thermal Power Station 46451
  Ahmedabad Electricity Company Limited 36809

3.10.2    Irregular placement of empty rakes in the siding without any indent from the consignors

As per existing rules empty rake should be supplied to the siding holders when an order/indent is received from them for loading. Therefore, supply of empties without indents or prior to receipt of indents lead to unwarranted detention of rolling stock on Railway’s accounts resulting in loss of earning capacity of these empties.

Test check revealed that on five sidings/ loading points (Baihata and Jogighopa on Northeast Frontier Railway, Pandhar Pavani (old) and New Sasti (Pandhar Pavani - New) on South Central Railway and Bhujudi Washery siding/ Santaldih on South Eastern Railway) empty rakes consisting of 820 wagons, 9637 wagons and 11745 wagons respectively were placed in the sidings/ loading points during the year 2002-03 without any indent from the consignors. This led to detention of empty wagons resulting in loss of 21857 wagon days (1521 on Northeast Frontier Railway, 6476 on South Central Railway and 13860 on South Eastern Railway). Though Railway Administration raised demurrage charges against the consignors, the payment was not made by the consignors on the ground that there were no indent from their side. Thus, Railway Administration suffered a loss of earning capacity of these empty wagons to the extent of Rs.3.48 crore (Rs.0.22 crore on Northeast Frontier Railway, Rs.0.95 crore on South Central Railway and Rs.2.31 crore on South Eastern Railway).

On Eastern Railway, figures for placement of rakes without indent/ allotment and period of detention of such rakes were not maintained at the Coal Demurrage section of the Office of the Senior Divisional Operation Manager. However, a review of available statement of allotment of rakes vis-ŕ-vis supply of loading of rakes revealed that during 2002-03, 349 rakes were supplied in excess of allotment in different sidings served by five sidings/ loading points test checked. A perusal of the minutes of meetings held in connection with the waival of demurrage revealed that in respect of collieries of BCCL, the amount of demurrage charged for advance supply/ transferred supply (i.e. wagons allotted for some other collieries were supplied to another colliery) was deleted from the demurrage bills as invalid amount. For collieries in Andal area, the amount of demurrage for excess/ advance supply of rakes were available which were subsequently waived. The figures for such invalid/ waived amount for collieries served by Patherdih, Katrasgarh and Andal revealed that an amount of Rs.4.40 crore was treated as invalid/ waived for excess/ advance/ transferred supply of rakes. It was not clear as to how the amount of invalid/ waived amount of demurrage charges were assessed by the Railway Administration in the meetings of demurrage waiver when the figures of excess/ advance/ transferred supply of wagons were not maintained at the Coal Demurrage section of Divisional Headquarters.

3.10.3    Weighment of wagons

As per existing rules, penal charges on the excess weight of coal loaded in wagons beyond permissible limits are to be levied. The restrictions are imposed as a measure of safety to avoid accidents and damages to wagons.

Test check on 22 loading points/ sidings revealed that out of 1,32,19,599 wagons (four wheelers) loaded, 1,29,10,281 wagons (97.66 per cent) were actually weighed during the year 2002-03. Out of the wagons weighed 8.76 per cent were found over loaded and penal freight amounting to Rs.48.89 crore was levied. At Junadih Line No.4/ Korba loading point on South Eastern Railway, all the wagons weighed were found overloaded. Percentage of wagons found overloaded to wagons weighed was as much as high 76.56 at BOCM I, II & III/ Belpahar loading points on South Eastern Railway followed by 55.29 at Andal and 51.24 at Katrasgarh on Eastern Railway, 43.89 at Junadih and New Kusumunda/ Korba on South Eastern Railway and 34.91 at Pateherdih on Eastern Railway (Annexure XXV).

It would appear from the above position that levy of penal freight to minimise the overloading is not acting as a deterrent. The reasonable course to deal with the overloading of wagons is to unload the excess coal and recover the cost of such unloading and demurrage for the detention to wagons on this account from the consignor, as permissible under proviso of Section 73 of the Railway Act. But, instead, when overloading is detected by weighment, Railway Receipt (RR) is issued for the total weight including excess and overloaded wagons are carried upto destination station. Obviously, Railways overlook overloading although, it is a safety hazard, as they carry overloaded wagons for long distances with full knowledge and acquiescence. A case of damage to rolling stock on account of overloading occurred on Eastern Railway which is as under.

Twenty wagons moving with a carrying load of 52 BOBR wagons got derailed at Km.291/13 between Daltonganj and Kajiri section on 16 January 1999. 18 wagons were so badly damaged that they had to be condemned. Against their codal life of 35 years, the life of these wagons ranged from one to ten years. These wagons, after loading, were weighed at the forwarding station before despatch and the extent of overloading was known to the Railway. Though the wagons were found to be overloaded (ranging from 0.1 tonne to 5.7 tonne), these wagons were allowed to run. A Fact Finding Committee constituted by the Railway concluded that overloading was the sole cause of the accident and the party (loading authority) was held responsible for such overloading which led to the accident. Subsequently, Railway preferred a claim of Rs.2.12 crore against the party for damage to the Railway property. The party, however, refused to pay the bills on the plea that accident occurred outside their siding premises. Realising that the possibility of recovery of the bills as remote, the Railway finally withdrew the bills. Though the reasons for damage to Railway property was established, no action could be taken against those responsible for the loss.

3.10.4    Diversion of coal rakes and delay in issue of Supersessional Railway Receipts (SRR)

Diversion of coal rakes is a common phenomenon on Indian Railways. Diversion may take place on two accounts: (a) at the request of the consignor, (b) due to operational constraint. As laid down in Para 1873 of Indian Railway Commercial Manual, (IRCM) Vol. II, diversion of goods/ consignments should not be made as a matter of course. Under exceptional circumstances (viz. accidents, breaches, civil commotion or heavy congestion etc.) goods/ consignments in transit may be diverted to destinations other than the originally booked destination under the order of the competent authority obtained on the basis of the application to this effect submitted by the party in possession of Railway’s Receipt at the booking station. On receipt of the advice, that the consignment has actually been diverted, the Station Manager of the booking station will issue a fresh invoice to the diverted station in supersession of the invoice issued to original destination station, the freight and other charges (like diversion fee etc.) to be collected at the booking Stations for the diverted destination stations.

In order to expeditiously complete all formalities required for early realisation of freight and refund of dues and settlement of claims of major customers arising out of diversion of coal rakes, a Joint Procedure order was issued on 2 May 1988 and 1 December 1998 on Eastern and South Eastern Railways respectively. Special cells were created in the Operating, Commercial and Traffic Accounts offices for settling the cases of diversion and these cells had to work in a coordinated manner. The cells in the Operating offices were to produce a fortnightly statement of diversions and submit the same to the concerned Chief Claim Officer with a copy to FA&CAO (WST). These statements were to form the basis for settlement of claims and realisation of Railway's dues. Non observance of the laid down procedure has led to a number of diversions not being followed by issue of SRRs and non collection of differential freight as discussed below:

South Eastern Railway

During the review of fortnightly diversion statements prepared at Headquarters during the period 1 April 2002 to 31 March 2003, 494 diversion cases of coal rakes were found recorded in respect of six loading points test checked.

No SRR was issued either by Station Manager of booking station or Chief Claims office against the diversion cases ordered and recorded in the fortnightly statements in respect of loadings made at six loading points during the year 2002-03. Freight outstanding in such cases could not, therefore, be assessed.

A comparison of the fortnightly diversion statements prepared by the Chief Operations Manager (COM) of Headquarters and those prepared by the Divisional Operations Manager (DOM) of the divisional Headquarters also revealed a wide variation of figure of diversion cases as detailed below:

Name of the
originating station
No. of diversion cases shown
 in the fortnightly diversion
statements prepared by the
COM’s office of headquarters
No. of diversion cases shown in the
fortnightly diversion statements
prepared by the DOM’s
office at Divisional headquarters
Belpahar 109 2 107
Brajarajnagar 132 1 131
Korba 214 9 205
Gevra 23 1 22

This indicates that there was lack of coordination between the Headquarters authorities (Commercial) ordering the diversions and Divisional Headquarters as well as station authorities who are required to issue SRRs.

Eastern Railway

During the review of fortnightly diversion statements prepared at Headquarters during the period 1 April 2002 to 31 March 2003, 134 diversion cases of coal rakes were found recorded in respect of five loading points test checked. Against these, only in eight cases SRRs were issued and not a single SRR was issued within the stipulated time limit. The exact amount of outstanding towards freight accrued on the diverted rakes where SRRs were yet to be issued, were still to be assessed by the Railway. Taking into account the freight rate for the distances of the diverted destination, it was assessed in audit that an amount of Rs.20.24 crore was outstanding towards freight accrued on these diverted rakes. Further, there was a likelihood of claims amounting to Rs.15.47 crore (freight element only) to be preferred by the original consignees against Railway.

3.10.5    Claims

Claim cases arise due to diversion of coal rakes and non-receipt of the same by the consignees at the destination stations. Settlement of claims to the original consignees and non-raising of the bills against the consignees of the diverted destination points results in huge losses to the Railways.

Audit scrutiny revealed that in the case of diversion of coal rakes meant for Kolaghat Thermal Power Plant (KTPP), the Railway Administration had failed to settle these claims expeditiously which led to unilateral decision taken by the KTPP to adjust their freight bills with their pending claims. While an amount of Rs.90.57 crore has been paid/ adjusted with the claim of KTPP after prolonged correspondence and long drawn process involving adjustment of Railway’s dues against the claim of KTPP, an amount of Rs.41.46 crore is yet to be realised from TNEB, the consignee of the diverted destination points.

3.11    Maintenance of rolling stock

3.11.1    In order to improve utilisation of rolling stock, Railway Board had issued instructions to the Railways to run the rakes in a closed circuit (CC) in specified routes. The salient feature of this system was that the CC rakes were to run generally for 4,500 kms. between two consecutive examinations of wagons. Each Zonal Railways were to nominate some examination points where the CC rakes were to be brought back after a fixed circuit operation for intensive examination and issue of Brake Power Certificate.

Test check of the loading position of CC rakes at 19 loading points (four on Central, two each on Eastern and Southern, five on South Central and six on South Eastern Railways) revealed that 5,321 wagons were hauled empty in loaded CC rakes during the year 2002-03 on account of their rejection by the siding holders. The reasons for not loading these wagons were (i) damages to body, floor & panel (ii) defective & missing doors and (iii) door jam etc. This indicates that the wagons were not properly examined by the Carriage and Wagons staff at the nominated examination point resulting in incidence of wagons becoming unloadable in the CC rakes. Railway Administration suffered loss of freight to the tune of Rs.8 crore during 2002-03.

3.11.2    Non CC rakes are required to be intensively examined in empty condition at the unloading station and moved to loading station as per requirement of traffic. If no examination facility existed at the unloading station, the empty/ back loaded rakes were required to be examined at the first train examination point in the direction of movement. Hence, there should be no occasion for non loading of the wagons at the loading points.

Similar test check of the loading position in respect of non CC rakes at 24 loading points (four each on Eastern, Central, South Central and South Eastern, three each on Southern and Western and two on Northeast Frontier Railways) revealed that 8,473 wagons were hauled empty in loaded Non CC rakes during the year 2002-03 on account of their rejection by the siding holders as unfit for coal loading. The reasons for not loading these wagons were (i) damages to body, floor & panel (ii) defective & missing doors and (iii) door jam etc. Railway Administration suffered loss of freight to the tune of Rs.19.37 crore during 2002-03.

3.12    Revenue Realisation

3.12.1    Irregular waiver of Demurrage charges

Demurrage charges are levied for the detention of wagons beyond the prescribed free time. These charges are more in the nature of penalties than source of revenue. The Public Account Committee (PAC), in its hundred and forty eighth report (1974-75), had pointed out that accruals of demurrage charges reflect on the poor mobility of wagons. Railway Board had also directed (March 1995) that normally not more than 25 per cent of the amount should be waived in each case and detailed reasons for waiver of ten per cent and above of the amount accrued should be recorded in each case.

Records of loading/ unloading sidings test checked revealed that a total amount of Rs.361.11 crore was leviable during the period 1998-99 to 2002-03 as demurrage charges. Out of this an amount of Rs.243.50 crore (67.42 per cent) was waived. This was much in excess of 25 per cent of the amount prescribed by the Railway Board. The percentage of waiver of demurrage charges was highest on Western Railway (87.63) followed by 83.32 on Northern Railway, 78.73 on North Eastern Railway, 77.57 on South Central Railway, 66.06 on Central Railway, 65.53 on South Eastern Railway, 65.45 on Northeast Frontier Railway, 61.67 on Southern Railway and 59.87 on Eastern Railway. Though in terms of percentage waiver of demurrage charges, the figure of Eastern Railway was on lower side, the actually waived demurrage charges (Rs.85.25 crore) on this Railway was the highest amount. Such routine waiver of demurrage charges defeats the very purpose of levying the charges and undermines the very intention of Board's guidelines. The excess waiver of demurrage charges beyond the limit of 25 per cent considered as reasonable resulted in loss of Rs.153.22 crore during the period of review, of which Rs.49.65 crore was on Eastern Railway alone. Further, out of the amount actually levied, a sum of Rs.9.38 crore was outstanding. (Annexure XXVI).

3.12.2    Outstanding freight

Non-realisation of earnings is a great concern to Indian Railways. Out of unrealised earnings of Rs.2058.61 crore as on 31 March 2003, an amount of Rs.1753.87 crore (85.19 per cent) was on account of outstanding freight, wharfage and demurrage etc. against the State Electricity Boards/ power houses in connection with the coal movement. An amount of Rs.966.63 crore was due from Badarpur Thermal Power Station (BTPS) managed by the National Thermal Power Corporation (NTPC).

The position has only been deteriorating over the years as can be seen from the table below:

Period ending Amount outstanding against
State Electricity
Boards/ Power Houses
(Rs. in crore)
As on 31 March 1999 1139.91
As on 31 March 2000 1306.19
As on 31 March 2001 1661.06
As on 31 March 2002 1616.45
As on 31 March 2003 1753.87

The Union Cabinet, in August 1996, decided that with effect from 1 October 1996, the Railways would transport coal to Power Houses only on pre-payment of freight. As regards old outstanding, it was decided that the outstandings would be set off against recoveries from the Central Plan Assistance to the State Governments. In reply to Paragraph 1.4 of Railway Audit Report for the year 2000-01, the Ministry had stated in their Action Taken Note that they had introduced the system of adjustment of freight with the traction bills to avoid the increase in outstanding dues. It was, however, noticed that the management of freight collection from the Power Houses/ State Electricity Boards continues to be highly ineffective. The outstanding dues against the main defaulting Power Houses/ State Electricity Boards was as follows:

(Rupees in crore)
Sl No. Name of State Electricity
Board/ Power House
Outstanding dues
as on 31
March 2002
Outstanding dues as on 31
March 2003
Increase in dues
during the year
1. Badarpur Thermal Power Station (BTPS) 957.61 966.63 9.02
2. Punjab State Electricity Board 325.31 424.05 98.74
3. Delhi Vidyut Board 160.86 179.88 19.02
4. Rajasthan State Electricity Board 105.75 109.92 4.17
5. Uttar Pradesh State Electricity Board 8.27 27.36 19.09
6. Damodar Valley Corporation 4.75 7.94 3.19
7. West Bengal State Electricity Board 4.21 8.11 3.90
8. Madhya Pradesh State Electricity Board 2.99 6.29 3.30

Figures indicate that neither the Cabinet’s directives regarding prepayment of freight were followed nor could the Railways device a mechanism to ensure that the outstanding dues against the Power Houses/ State Electricity Boards are liquidated. It was also noticed that outstanding freight of Rs.751.05 crore accrued against BTPS for the period upto 30 April 1997 was frozen as per instructions issued (May 1997) by the Railway Board. No decision to recover/ adjust the freight has been taken despite lapse of more than 6 years.

3.13    Conclusion

Railways have the inherent advantage of being a low cost carrier of large volumes of goods moving in trainloads over long distances. Despite this, the percentage of rail transportation of coal remained more or less same during the review period and in fact declined slightly in the year 2002-03. The changes in freight tariff structure through the annual budgetary exercises failed to increase the Railways’ share in transportation of coal. Railways failed to take full advantage of modernisation of infrastructure and make suitable reduction in loading and unloading time. Detention, diversions and overloading continue to plague the Railways and reduce their operational efficiency. The following recommendations can be considered in this regard:

  • Indian Railways should make all out efforts to sustain the existing coal traffic as well as attract more coal traffic by adopting suitable strategies. Use of the Freight Operation Information System should be made to optimise the utilisation of Rolling Stock, provide real time information to customers in regard to booking, movement and delivery of freight consignment.
  • Railways should replace Four-Wheeler stock with more Open Hopper Wagons (BOBS/ BOBX) with bottom discharge arrangement for transportation of coal from coal fields to achieve better turn round time and increase their coal earnings figures.
  • Railways should pursue with the siding holders to provide mechanised system of loading and unloading (tipplers) to enable optimum utilisation of the Rolling Stock.
  • Railways should carry out time and motion studies at regular intervals to determine free time that is realistic and enables achieving better turn round time of Rolling Stock.
  • The Railway Administration should enforce strict measures to prevent overloading of wagons which is compromising Railway safety.