C.S. Sharma

Additional Member Finance

 

D.O.No.99/ACIII/35/1                                                                                   Dated  6.7.99

 

My dear (All FA&CAOs Rly./PUs),

 

 

                                                Sub: Action Plan  1999-2000.

 

 

                        As you are aware, 1998-99 has been a difficult year from the financial point of view, due to non-realisation of anticipation earnings and increased burden on working expenses due to the implementation of the recommendations of the V CPC.  This calls for much greater fiscal discipline to ensure reduction in expenditure, and all out efforts to maximize earnings in the current year.  In this regard, I would also like to draw your attention to FC’s D.O.letter No. 99-B-200, dated 3.6.99 issued to all the General Managers.

 

            While appreciating the efforts made by all the Units in different importat aras, a time has come to concentrate on larger issues and thrust areas having direct impact on increase in earnings  and reduction of expenditure.  Keeping this in view, the Action Plan for 1999-2000 has been framed to lay special emphasis on the following items:-

 

(1)        Earnings

 

            In 1998-99 it was observed, that, the yield per million tonne fluctuated drastically from month to month, and at the end of the year, fell short of the ‘targetted yield’ per million tonne.  This lead to an over-all shortfall in goods earnings, apart from the shortfall on account of reduced loading.  I would like you to analyse and monitor this closely, and give a specific feed back on this aspect.

 

            Some of the thrust areas on which I would also like to concrete and quantified feed back, are indicated below:-

 

(a)               Goods

 

·        Minimise “Traffic Outstandings”,  especially w.r.t. power houses and admitted/disputed debits.

·        Monitor the Statement of ten-day earnings and watch any deviation/abnormal trends.

·        Ensure proper accountal of  all earnings viz. receipt of station balance sheets, passenger classifications.  TTE earnings etc.

·        Ensure application of latest Rate Circulars.

·        Monitoring changes in pattern of Goods movement.  Special emphasis on long lead items and high rated traffic.  Short distance traffic.  Short distance traffic also to be encouraged.

·        Correlate the impact of volume discount scheme with actual increase in originating traffic.  Suggest measures to make it effective.

·        Make judicious use of Station to Station rates.

·        Monitor demand for empties.  Approach Board to correct global imbalances.

·        Target improvement in wagon turn around.

 

(b)               Passenger

 

·        Intensify realization of unbooked luggage earnings.

·        Monitor TTE’s earnings to plus leakage.

·        Organise relentless ticket checking.  Enlist  staff from all departments.  Publicise schedules of drives to alert people.  Quantify and advertise results of past drives.

·        Study wait listed trends and suggest change in train composition to satisfy maximum demand.

 

(c )        Other Coaching & Sundry

·        Monitor parcel movement as an area of unexplored potential.  Suggest short term pricing decisions.

·        Monitor leasing of SLR space and VPU utilization.

·        Attract courier services on important Rajdhani/Shatabdi sectors, offering quick transit and high reliability.

·        Augment earnings through catering, advertisements, commercial leasing of railway space on platforms and other innovative measures.

·        Rationalisation and realization of ‘user charges’ which include rent and toll, advertisement fees, maintenance charges of sidings, saloons of private bodies, charges for electricity and water supplied to residential colonies.

 

(2)               Plan Expenditure

 

The plan  outlay for 1999-2000 for Rs. 9700 cr. is made up of internal resource component of RS. 4160 cr.  Resources to this extent will be available only if the projected earnings are realized.  Here, I would like to draw your attention to CRB’s D.O. letter No. 96/B/106, dated 14.05.99 and FC’s D.O. letter referred to above, regarding cut in Plan Expenditure.  Keeping the above in view, the following areas need special attention:-

 

 

·        Reassess the priority of works-in-progress, through a work by work, review of physical and financial progress made.

·        Propose new works after careful scrutiny of utilization of available capacity of workshops and sheds, rolling stock and infrastructure.

·        Monitor optimum utilization of assets through productivity tests, machine utilization, prompt completion of projects on hand and drawing of completion reports.

·        Detailed estimates to be carefully scrutinized ensuring cut in all wasteful expenditure.  Accurate assessment of rate of return.

·        Proper monitoring of Liability registers.  Indents  for material to reflects the bade minimum required.

·        Effective management of contracts.  Avoid time and cost overrun.  Incur no expenditure without the sanction of the competent authority.

·        Creation and operation of work charged posts to be linked to the physical and financial progress of work.

 

(3)               Ordinary Working Expenses

 

The reduced Budget Grants under Ordinary Working Expenses (Grant 3 to 12) have already been conveyed to you under FC’s D.O. letter dated 3.6.99, mentioned above.  Under no circumstances, will additional allocation be provided at the Revised Estimates or Final Modification stages.  All post-budgetary increases will have to be absorbed within the reduced grant.  

In this context areas which need attention include:

 

·        A critical review  of the staff costs to reduce expenditure on TA, OTA, NDA, Fees and Honoraria, Contingent and Running Allowance.  Postponing staff recruitments, surrender of vacancies and redundant posts.

·        Better inventory management, leading to reduction in stores expenditure, energy conservation in traction/non traction areas, attainment of the best ever SFC.  Specific steps to be taken to avoid payments of penalties to Power Houses.

·        Proper costing and monitoring of unit costs of POH and rationalizing the same through inter railway and intra workshop comparisons.  The tendency to do premature POH of wagons to maximize utilization of capacity to be avoided.

·        A quarterly review of imprests, TA and other items mentioned above to be carried out quantifying the savings achieved.

 

(4)               Internal House Keeping

 

The detailed monitoring of various housekeeping items is done through the Half Yearly Arrears Report and Half Yearly Review of Suspense Balances.  However, I Would like a special feedback on the following items:-

 

·        Proper maintenance of Liability Registers for all revenue indents to control expenditure on maintenance spares.

·        Review of staff costs through proper scale check registers and activity wise analysis for identification and reduction of surplus staff.

·        All registers, particularly those pertaining to  recovery of advances, must be personally reviewed and signed by the officer concerned.

·        Test checks to be done intensively at all levels to detect frauds and losses.  Inspection of original documents in the Executive offices needs to be ensured.

·        A detailed and effective review of Cheques and Bills, Remittance into Banks and Focal Point Banking scheme to be done regularly.

·        Daily monitoring of Net drawals personally by the FA&CAO.  Fortnightly projections of Cash inflow and outflow to be sent to Board.  (Separate instructions on the subject are under issue).

·        Top priority to be given to ATNs, Audit Reports, Special Letters, Draft Paras and Stock sheets, by ensuring early closure of these items through timely reply and after holding of bipartite and tripartite meetings.

·        More intensive Inspections by TIAs, ISAs and Accounts Officers and special attention to their inspection reports.

·        Internal Audit Cells to be activated to do quality studies.  The gist of studies already done by various units will be circulated separately.

·        Computerisation of hundred percent pay roll, implementation of TAS and implementation of Revised costing system in the workshops and sheds to be done.

·        Total computerization of Traffic Accounts with special emphasis on detection frauds in refunds through PRS.

 

According to the above action plan, you may set you own internal targets, so that a quantified compliance is reported on a quarterly basis by 20th of the following month.  The first compliance report may be sent for the quarter ending June 99, on last year’s action plan, and future reports on the current year’s action plan.

 

With Best Wishes, 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Yours sincerely,

 

                                                                                                                                                                                                                                                                                                              (C.S. Sharma)

 

 

Sh.(Name),

FA&CAO,

---------Railway.