Parliament panel finds irregularities in railways scrap auction

Taking note of the decline in scrap earnings of Railways from 2012-13 to 2015-16, a parliamentary committee has found "irregularities" in the same period in the scrap auctions.

Railways is a major generator of scrap, and scrap disposal is a one of the important functions of the public transporter which generates Rs 3000 crore a year.

The Railway Convention Committee (RCC) in its latest report has observed with concern that there have been reported instances of irregularities in scrap disposal during 2012, 2013 and 2014 involving an amount of Rs 3.37 crore, Rs 90 lakh and Rs 1.02 crore respectively.

The railway officials found responsible for such irregularities have been taken to task, the report tabled today in Parliament noted.

Seeking action against corruption, the RCC headed by BJD MP Bhartuhari Mahtab has asked Railways to exhibit zero tolerance towards irregularities in scrap disposal, especially after adoption of e-auction mode, and take all precautionary and preventive measures to stop leakage of revenue for scrap disposal.

It has also asked the Railways to take all requisite measures to continue to maintain the confidentiality of the reserve price of scrap auction with a view to stop manipulation of a well laid system.

Railways has completely switched over to e-auction of scrap from June 1, 2013 and adopted it as normal mode of scrap disposal except for certain low value miscellaneous items.

Such auctions have succeeded in eliminating direct human interface between the bidders as well as the seller, thereby avoiding the possibility of cartel formation and bringing in greater transparency.

While taking note of the efforts made by the Railways to foster greater transparency in the disposal of scrap, the committee asked the Railway Board to guard against connivance, interference and cyber crimes in the e-auction process so as to encourage greater participation of bidders and earning best prices for the Railways.

The committee also cited one such case of the Karnataka government's bid being blocked to facilitate the finalisation of bid in favour of some other entity. RCC has also observed that the weighable scrap, if sold without weighing at the senders location, it will definitely lead to revenue loss for the Railways.