ISLAMABAD, June 15: Performance of Pakistan Railways continues to decline, and the Auditor-General of Pakistan in its new report revealed that railways administration has failed to achieve the target of zero operating deficit, and suffered a net loss of Rs27 billion during fiscal year 2010-11.

The new audit report on Pakistan Railways placed before the National Assembly by the Auditor-General showed that in 2009-10 Pakistan Railways suffered losses to the tune of Rs20 billion, reflecting an increase of 33.715 per cent over the preceding year.

The loss increased due to increase in ordinary working expenses of Rs4,007.723 million and decrease in gross revenue by Rs3,274.863 million.

The audit report went on to state that while gross earnings of Pakistan Railways decreased by Rs3,274.863 million, representing an increase of about 15 per cent as compared to previous year, its operational working expenses increased by Rs4,007.723 million, reflecting an increase of 11 per cent over previous year.

The main cause of decrease in earnings was shortage of locomotives, resulting in suspension of train operations running on profitable routes and for goods traffic.

The interest on debt amounting to Rs4,956.742 million contained internal and external portion of Rs3,865.740 million and Rs1,091 million, respectively.

However, interest on overdraft for internal portion covering June 2011 amounting to Rs309.684 million was not included in the expenses for 2010-11, thus the loss was understated to that extent, points out the audit report.

The audit report showed that the overdraft of Pakistan Railways rose to Rs40 billion at the end of fiscal year 2010-11.

The substantial amount of overdraft indicated that the railways management had not been able to attain sound financial results in recent years through better financial management and proactive strategic policies.

The federal government provided grant-in-aid of Rs32.64 billion which was 77 per cent more than the previous year. The actual loss was Rs27 billion while the remaining amount was transferred to balance sheet to reduce the cumulative deficit.

The audit report points out that Pakistan Railways was deprived of potential earnings of Rs585.393 million due to delay in carrying out periodical overhauling and repair of 522 wagons and 42 locomotives which caused operational inefficiency too.

Operational inefficiency caused decrease in goods and passenger earnings of Rs669.792 million and Rs898.290 million respectively. Unnecessary procurement caused blockage of capital worth Rs67.34 million.

The report pointed out loss of potential earnings of Rs57.377 million due to unjustifiable detention of 976 wagons.