Multi-billion losses and colossal waste
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Sri Lanka’s dilapidated railway noted for financial waste and corruption, and which operates many types of locomotives and carriages imported from various countries, booked a loss of Rs 12.43 billion in 2022, compared with Rs 10.30 bn in 2021, on revenue of Rs 11.07bn.
The Department of Sri Lanka Railway does not have a human resources development plan.
Losses mounted despite passenger demand shooting up as a result of the economic collapse. But, services are severely curtailed. Bus fares soared and rail passengers surged to 6.6 million in 2022 from 2.15m the year before. Now, passengers must squeeze into fewer carriages, a questionable strategy meant to increase yield. Fares were also increased on July 12, 2022.
Recurrent expenditure jumped to Rs. 23.5bn and capital expenditure was cut by 30.7% to Rs. 19bn. For 2022, just 50 renovated carriages were put into service.
Purchases of locomotives from India in 2020, despite Department of External Affairs recommendations that American locos are more economically viable, have caused losses exceeding Rs 3bn (at today's exchange rates), the national auditor has found.
Ten M11 locomotives were bought for Rs. 850m. These engines are long and could have caused running problems. Three remained idle as of April, 2021. On 20 instances, bidder specifications did not match that of the department. Seventeen of 46 technical specifications had not been met.
Without a study or proposal, Rs. 96.93m was spent to fix an event recorder and vigilance system on 6 M class trains and w-3 class locomotives.
Spare parts worth between Rs. 1.90bn and Rs. 6.39bn have been in stock for 16 years.
The deputy railway protection superintendent (coverage) retired in January 2020, but he was overpaid Rs. 855,235 as salary from January-October 31, 2020, the auditor found. He was overpaid Rs. 160,924 despite not working, without leave, from August 15-October 15, 2019.
A CCTV system costing Rs 35.57m was installed between Fort and Maradana in November, 2013. But, eight months later, a lightning strike on July 12, 2014, disabled 31 cameras at Colombo Fort Railway Station and 17 at Maradana Railway Station. The contractor had fraudulently claimed it was affiliated with the University of Moratuwa. Legal action has not been taken, the auditor observed.