TRAFFIC COSTING & TRAFFIC ACCOUNTS FOR ACCOUNTS DEPT OF INDIAN RAILWAYS

TRAFFIC COSTING

Present Costing:

Unit cost of goods services computed by Zone and compiled by Rly Board at all India average.
Coaching done class wise for passenger service and parcel, luggage, postal and catering services.
Board computes commodity costing for 29 selected commodities that constitute 94 % of originating tonnage and 95 % of such earnings. Standard train costing is done based on the unit cost not compiled.
Specific train costing is carried out based on actual survey.

Uses:
1. financial appraisal of various projects
2. granting special rates
3. costing of special trains both freight and passenger services
Desirable objectives:
- knowing the cost of various elements for effective cost control facilitates improving productivity of services.
Hurdles:

zonal rly is taken as a unit- field unit cost cannot be ascertained as inefficient field units get merged with efficient field units- no appreciation for good performance and no punitive action for wasteful expenditure
Hassan Iqbal committee suggested activity based unit costing at field unit level – that is not done atleast divisional level study to be done since accounting system provides for that exercise
Fully distributed costs – no proper guide for formulation of rates for different commodities or different class of passengers travel – highly variable and keep revised
GTKM for all statistical purpose seems irregular
cost of van and shunting goods trains still done though obsolete – to be dispensed with
no marshalling
no smalls and repacking

suggestions:
filed unit study or divisional level
budgeting reforms- segregate fixed and variable costs – provide fully for fixed and for variables by determining the anticipated cost of performance and multiplying the same with the anticipated performance units – divide zone into various responsibility centres down to grass root level in divisions and workshops each responsibility centre to be given a unique code
short term variable cost – less than five years long term – five to ten years 11 years period prescribed for productivity tests
social service obligations
a. passenger and other coaching services
b. essential commodities carried below cost
c. operation of uneconomic branch lines
d. new lines opened for traffic during the last 15 years
5 SFC needs review – after five years or so when special locos are introduced
6. Line haul cost at various speeds to be done by Engg analysis not by accounting or statistical method
7. GTKMs based on standard rake composition duly updating it for additions and deletions – monthly basis
8. Train costing to be reviewed – enroute collection by TTE unreserved earnings etc to be taken into account
9. Costs at Rajdhani is excess 10 % more for I AC, 2 AC ACCC is compared to Mail/Express trains.

HISTORY OF TRAFFIC COSTING IN RAILWAYS

In 1962 at the instant of World Bank part of Statistics Dept
Present T C system started w e f 01.04.1979 Revised Classification (activity based cost)
Unit cost is the end result
Unit cost = total expenditure (source: C & R accounts – Book of Statistics) divided by Total performance (arrived from Statistical Statements of Statistical Dept)
How reliable? T C analysis will be reliable
subject to booking of correct expenditure appropriate detailed and sub detailed heads of relevant abstracts
if the CTRs are not correctly collected and compiled by statistical dept correct performance cannot be ascertained eg NTKM, VKM, EKM, TKM

Expenditure:
Demand Nos 1 & 2 total expenditure of I R as a full apportioned to all railways based on their activities proportionately
Demand no 3 – over heads
Demand no 4 to 10 4, 5, 6& 7 repairs and maintenance
8, 9 & 10 operating expenses
Demand no 11, 12 & 13 over head

C & R prepared gauge wise, demand wise, abstract wise and sub detailed head wise
statement 15 prepared by statistical dept and gauge wise expenditure bifurcated between coaching and goods on the basis of total GTKM earned ( prepared by Statistical Dept)
proforma 5 is a statement prepared by T C cell to bifurcate the cost of suburban expenditure from that of total coaching expenditure

Traffic costing – an introduction

Ø Railways second largest carriers in Asia
Ø Rail transport influence pricing of commodities
Ø Being a government undertaking railways are not run purely commercial basis
Ø Railways perform dual roles – maintaining commercial viability and obligation of meeting efficiently the increasing transport requirement or rapidly diversifying Indian economy
Ø Cost study helps in location of inefficiency in any dept of railways and facilitates removal of such
Ø Railways manufacture and sell transport – cost of products – transport of goods and passengers
Ø Primary responsibility - convey passengers and goods cheaply and quickly between the pair of points
Ø Suitable measures are to be adopted to reduce the cost of
- Haulage
- increased speed
- Comfort
- Safety
- Punctuality
Ø Railways transport cost one constituents of over all cost of commodities carried by them
Ø Railways basically are bulk carriers moving - raw materials and finished products
Ø Transport costs enter into cost of commodities and affects general price level
Ø The primary goal of rail management is to minimize railways’ transport cost without affecting the commercial viability and the quality of service
Uniqueness of rail costing:
1. not comparable with other commodities or other services – spread over all India uniform policy
2. product not homogenous – common assets are used for carrying passengers and goods traffic – with in both there are varieties – different classes of passenger traffic – luggage, parcels, RMS traffic- goods 45 categories
3. like any other transport ‘ a perishing commodity’ – cannot be stored – if a wagon not utilized for loading on a particular day its transport capacity is lost forever – not so for other commodities
4. requires creation of vast costly assets – over all cost depends on efficient use of these assets

CONCEPTS USED IN TRAFFIC COSTING:

Fixed cost: non variable cost, indirect cost or over heads – remain constant with a change in volume of traffic over a period – include establishment charges, interest depreciation and expenses on maintenance of P Way

Variable cost: marginal cost, incremental cost or differential cost – increase / decrease in direct proportion to changes in the volume of traffic – include lubricants, wages of running staff

Fully distributed cost: represent the total expenditure by railways - include working expenses, interest and depreciation on capital

Common cost: joint cost – due to non –m homogeneity of product mix same assets are used for providing passenger and goods services – expenses incurred jointly constitute common costs – allocated on the basis of certain ratios

Consignor’s cost: incurred by consignor – includes packing charges, charges for loading goods in to trucks, transportation from consignor’s warehouse to the rail head, unloading and loading in to wagons

Consignee’s cost: expenditure in taking delivery of consignment at destination station – cost of transport from destination station to consignee’s warehouse – includes unloading from wagons, loading in to trucks, transportation from rail head to warehouse

Inventory cost: imputed costs – interest charges on capital values of goods locked up during the period of transit
Inventory cost per tonne = V x r t
365
V - Value per tonne of goods x annual rate of interest
t - number of days in transit from consignor’s warehouse to that of consignee’s. Delay in transit puts the customer to lose because inventory will go up. Railways take longer time therefore road is preferred though the freight is lower

Trader’s cost: total expenses incurred by trader for this movement of goods by particular mode of transport. Includes consignor’s cost, consignee’s cost, inventory cost, and freight Ultimate cost when it reaches the market

Operator’s cost: expenses incurred by transport operator in providing the transport services. Includes requisition, maintenance, operation, improvement, replacement of transport facilities, compensation for damages, interest on borrowed money, dividend on capital
Economic Cost: includes cost of transport to the nation in terms of material and labor – excludes elements of taxes both central and State.
































FUNCTIONS OF TRAFFIC COSTING CELL

Preparation of Proforma 5
suburban analysis MG/BG separately
freight unit cost / Green Book preparation MG/BG
coaching unit cost MG/BG
shunting engine hours cost
incremental cost ( marginal, differential)

End result / objectives of TC

rate fixing for fare and freight
project appraisal
managerial tool to assess performance of each dept
profitability analysis
cost consciousness and help control costs

5 shunting engine hour cost – shunting 1. By shunting engine by shunter
2. by shunting engine by driver
Operating cost of 2 is higher; hence it is essential to determine the hauling charges which are based on hourly basis.
No separate shunting engines are available in electrical engines in SR. however; under diesel separate engines are available for shunting

6 Incremental cost: Marginal cost to asses the actual additional expenditure incurred for moving as additional volume of traffic.

Basic increments:
1. C&R A/cs (where over heads such as A.K.I.M are not involved)
2. Certain heads of accounts which are directly involved will be taken into a/c.
3. By comparing the additional traffic of previous year useful in fixing the station to station.

It is fixed for certain commodities to attract bulk traffic between 2 pairs of point.
It will be lesser than the classified rate but it will not be lesser than incremental cost.
Eg.New port at Ennore - Movement of boulders from Mahendravadi Salem to Mathur (MG) movement of lines stone
This rate is applicable to a fixed commodity for specific traffic alone.
This attract bulk traffic / to compete with road traffic.

1).Other studies in Traffic Costing Cell.

Survey Ratio: Once in five years to arrive at the specific Ratios for different activities where joint costs are involved last study done in 1989 present 1995 study not yet approved.



MG
1) SS/KPD total Pay Rs.8000
BG Parcel

Goods Coaching Reservation


2).PWI – Assessment tire ETKM Equated Tract kilometer basic wear & tear repair
Maintenance (1&3km)
3).Plinth area of Serviced station buildings in Sidings 10 km=3km (Wear &Tear)

Stations are selected comprising of small, individual 7 large stations where activities such as marshalling, Terminal etc. are involved and data such as ETKM no of staff of different department, Plinth area of service buildings and other actual activities they under take & to work out the ratios

Train costing: Introduction of New trains
Argumentation/Cancellation
Stopping.
Direct Cost: Indirect Cost, Over heads, Central charges, Deduction to goods Trains.

Depreciation
Direct cost: 1:LOCO Interest
Repair & Maintenance
Fuel, Crew
Requirement of LOCOs
Total hours require for re of the train
Total working of loco 6 hours * ½ attaching + ½ detaching

Per day 10 hours 7 hours required out of 20 hours = 7 hours
7/20 x100= 35 % of required
Add ½ 5 % as spare capacity 125x10/35

Depreciation straight line method
Annual Depreciation=Present cost of asset-scrap value/life of asset =B%
B % of A = Annual Depreciation

b).Interest Present day cost x requirement of LOCO x 7%

c). Repairs Maintenance = Abstract c 500
Total expenditure of 2 under abstract 1500/ total no of Electric loco over zone

Over cost of repair & maintenance of LOCOs
It is converted to requirement of ratio
d).Fuel: Specific Fuel from statistical branch consumption x GTKM of train will give actual requirement s of fuel to run the train annually

This x cost fuel = Cost of Fuel per

Crew 1 Driver 1 Asst. Drawn Pay + DA+ TR etc + 30% running allowance
20% of cost drawn x 12 annual cost of crew.+ cost of Asst+ requirement 10hours but asked for 7 hours 7/10 x 100 = 70%

2 Coaches i) Depreciation
ii).Interest as composition is not disturbed requirement of coaches taken as fuel + 10% spares coaches present pay cost of coaches – class wise
iii).Repair & maintenance: Ac Non Ac
Figure obtained from coaches.

3). Generator Car: (Only in some train)
Fuel SFC
Lubricant
Staff
Train costing:
4) Cost of Train examination L Enroute)
Places/ No. of train examination points arrived assume train stop for 10 minutes

Staff = 1+XR 1ELc Annual Pay
2 KH 2 KH
Cost to be assumed
Indirect cost
Unit cost: 1. cost of track (P.Way) on GTKM
Unit cost per 1000 GTKM available in coaching unit cost and multiplied by
GTKM.

2. Cost of Signal: Based on Engine KM (Distance in time table)
Unit cost per EKM x this EKM

3. Cost of transportation: SM, Guard, Pointman etc
Based on the cost of Train KM

Cost of OHE: Unit cost of OHE x Total distance of Electrification

Terminal Expresses: Based on No of Passenger originated per class.

Unit cost of Booking
Ticket Checking Seat Capacity of each class x No of days of service annually
Enquiry & /Reservation
Special Services

Total Unit cost
Direct + Indirect
Add overloads + Central charges
Total cost to run a train + total cost of detention to goods train
10 % of total expenditure for Rajadhani & Shadabti
2 % of total expenditure for Mail & Express train
Nil % of total expenditure for ordinary train
Actual final Total/ 365 = cost for trip

Earnings:
For all classes / Coach Capacity + No of Coaches stc x fare whole distance + Reservation charges


NANJUNDAPPA COMMITTEE RECOMMENDATIONS

Ø Crisis in traffic costing world over
Ø Study by ICWA in 1960
Ø Monopoly government rate fixing
Ø Loss to be met by state governments
Ø Adhoc basis discontinued in 1948
Ø 1950’s bifurcation of coaching and goods on equity basis
Ø 1960 world bank suggested a cost cell
Ø 1970 passenger and EMU services loss identified
Ø 1986 task force – analysis of fully distributed costs – complex in nature passenger no class wise
Ø different costs, different capital, different interest
Ø lacks professional approach
Ø no normalization or annualized of huge expenditure

Suggestions:
1. survey ratios - frequent surveys
2. apportionment - simplified as against 1200 detailed accounts heads, 160 apportionment factors
3. annualisation or normalization – 3 to five years
4. methodology adopted for green book also for passenger (pink ) book
5. liability register to be maintained at the lowest cost centre
6. Accounting system to be revamped with professionals, finance ministry and cost accountants
7. demands to be fixed and variable – accounting complexes
8. interest accrued to be taken for assets replaced by DRF
9. data on deferential cost to be ascertained ( type & class)
10. divisional accounts to delinked from EMU costing
11. divisional accounts to be separated from repair and maintenance of HQ buildings, other railway buildings, welfare building such as central hospital
12. leasing charges to IRFC not be included in EMU costing
13. further breaking of variable cost of stores, staff, fuel and energy for each facet of operations
14. loss on branch lines to be made good by additional traffic on mainline based on avoidable cost
15. PRS to be used for collection of data on passengers
16. effective use of surplus staff and stores
17. cost of repairs and maintenance to be fixed assets, depreciation , interest to reckon long time variable cost
18. speed restrictions etc on cost consciousness – brochures and newsletters
19. posting of cost accountants in major cost centers
20. comprehensive book on traffic costing
21. spread costing information to wider area



TRAFFIC COSTING

Objectives:
provides basic data for rate fixing
provides data for project appraisal and evaluation of further capital investment
creates cost consciousness and control
helps carrying out profitability analysis

Fixed cost
Establishment charges, interest, depreciation, expenses on maintenance of p way etc

Variable
Fuel, lubricants, wages of running staff (taken for quoting special rates for attracting high rated traffic moving by road

Fully distributed or joint costs
Working expenses, interest, and depreciation on capital

TECHNIQUES OF T C

Direct – bifurcation of expenses between different gauges, coaching and goods services
Indirect – assessment through
1. engineering analysis based on experience and knowledge of engineers- ratios for apportionment of traffic maintenance , expenditure, repairs & maintenance of locomotives
2. Statistical analysis used for apportionment of common costs through survey method – ratios based on sample survey in S rly 1986 and 1995 statistical regression analysis based on correlation analysis simple and multiple regression analysis –more than one independent correlated or regressed with the dependent variable. Simple one dependent variable correlated with one independent variable
3. percent variable method – proportionate distribution of joint costs in relation to direct cost to total expenses
4. ratio of direct expenses – ratio of direct expenses of different services
5. Cost accountant’s method – based on behavior of different elements of cost by study of employee duty hours machine hours, and other factors required for producing passenger and goods services.















TRAIN COSTING
Direct costs:

locomotives – crew demand no 8
oil and lubricants demand no 10
depreciation demand no 8
interest demand no 8
repairs and maintenance demand no 05
b. coaches depreciation demand no 8
interest demand no 8
repairs and maintenance demand no 06
c. power generation of a/c fuel and lubricants demand no 10
stores demand no 8
staff demand no 8
d. cost of train examination demand no 9
e. catering
f. staff on train/train superintendent etc demand no 9
TOTAL DIRECT COST:
indirect costs:

cost of track maintenance demand no 4
cost of signaling demand no 7
other transportation costs demand no 9
cost of traction OHE demand no 7
cost of terminal services demand no 9
TOTAL DIRECT & INDIRECT COSTS
overhead charges

add over head charges 22%
Demand No 3,11 & 12 on direct and indirect costs cumulative up to OH
Central charges add central charges 0.46%

demand no 1 & 2 on direct and indirect costs cumulative up to
detention cost cost of detention to goods train 10% cumulative up to central charges
total cost per annum = total direct + indirect + OH+ CC + D / no of trips per year
= cost per trip










EMU COSTING

Direct
1. pay and allowances including consumable stores like lubricants d no 08 400
2. electricity charges d no 10 332
3. IOH, POH, ROH change of control cables at depots & workshops d no 06 400
Direct allocation
STAFF
D NO
SUB
DETAILED HD
ACTIVITY
08
410
Running staff
08
420
Shed and yard staff
08
430
Other operating expenses
Like lubricants, consumable
Stores
08
440
Miscellaneous

FUEL 10 332 energy supplied to EMUs

D NO
SUB
DETAILED HD
ACTIVITY
06
410
Repairs in sheds
06
420
Repairs in workshops
06
430
Periodical Over Hauls
06
440
Intermediate over Hauls
06
450
Special repairs and Over Hauls
06
460
Other repairs –
control cables Running repairs in
sheds and Workshops
Control cables – other repairs POH
Control cables – other repairs IOH
06
470
Miscellaneous charges-
trials and experiments,
special adjustments
over/under charges on cost
over/under charges Manufacture
& repairs


Indirect
1. cost of repairs and maintenance of P Way d no 04
2. cost of repairs and maintenance of Plant & Equipment d no 07
3. other transportation charges Train Passing etc d no 09
Common costs/joint costs based on GTKM, TKM, Survey Ratios

Over head
1. general superintendent d no 03
2. pension etc d no 13
Based on pro rata rupee basis

Depreciation
Railway wise, abstract wise and gauge wise (suburban)
Interest
Dividend pre 1980 6 %
Upto 1994 7 %
1995 7.5 %

Recommendations
EARNINGS
EXPENDITURE
Suburban earnings to be accounted
Separately
TKM basis for calculation not GTKM
Suburban earnings in JET separately
TKM to be inflated a factor of 1.5 %
Suburban earnings for traffic interchanged
With foreign railway separately
Track life to be 30 years instead of
55 years
Earnings at suburban section
a. license fee, VLR, book stall
b.
OHE life to be 20 years instead of
40 years

EMU costing not to take leasing charges
Cf: Nanjundappa Committee Report

Separate sub detailed head for EMU like in
Mumbai and Calcutta





























LIMITATIONS AND SHORTCOMINGS OF TRAFFIC COSTING DEVELOPED IN IR
An efficient system is a sine quo non for a sound commercial costing
LIMITATIONS
REMEDIES
1. generates aggregated costs for various facets of operations fro the zonal railways as whole, where as financial accounts are prepared division wise – vide variations in the costs from one zone to another which remains unexplained – the figures appear prima facie unreliable
Instead of concentrating on production of aggregate costs, should switch over to route wise costing in each division
2.major portion ( 75 %) of expenditure on repairs and maintenance is common to both coaching and goods – is bifurcated on assumptions which can be questioned
The Railway Reforms Committee suggested RITES to develop suitable parameters for apportionment of joint costs
3 traffic costing data is available only after 18 months of the close do the financial year by which time it is only historical interest and cannot be profitably used by management
Essential that the costing system should be integrated with the management information system( MIS) and provide useful traffic costing data in real time- with the computerization it should be possible for the IR to produce costing reports in time and quarterly instead of only once in a year so that the effect of seasonal variations in the cost of operation can be gauged
4 in computation of cost the element of depreciation, interest and freight charges have not been included in a scientific and reasonable proportion
The defect may be corrected
5 the variation in unit cost from one Zonal Railways to another and within a zonal railway from year to year should be studied in greater detail so that cost centers with wasteful and avoidable expenditure are identified and corrective and remedial measures are taken.

When the division wise costing is introduced the reasons for variation from one division with another in a zonal railway should be analyzed by concerned zonal railway and suitable steps taken to eliminate waste and control costs

Purpose of cost accounting: to what extent has this been achieved in railway traffic costing where it is in vogue for some time- what extent has traffic costing helped in rational revision of rates and freight structure

Traffic costing of immense value in comparing financial working of different zonal railways, taking policy decisions in the matter of fare and freight structure, quotation of “station to station” rates, financial appraisal of railway projects and cost control
Large investment planned – aimed at self reliance – transport costing will gain importance
Becomes vital tool bin the hands of management for taking major policy decisions in areas which are nerve centers and control the profitability of the system.




• TRAFFIC COSTING – STAGE I
Step I
As a first step each item of expense is split gauge-wise-BG, MG and NG.
Detailed costing of NG is not undertaken.
Principle of direct allocation is followed for all those expenses which are incurred exclusively for a particular gauge.
Expenses related to more than one gauge are apportioned among different gauges based on certain ratio, determined on the basis of instructions issued by Railway Board.
The result of this exercise by accounts department is available in Statement XII.
Step II
In the second step expenses pertaining to EMU Services are taken out from the total expenses of those Railways, which operate these services. Due to heavy density of traffic on EMUs, the wear & tear of rolling stock and rails is very high and therefore economics of operating these services is worked out separately.
Step III
The third step in traffic costing is to bifurcate the total expenses of each gauge (after excluding EMU expenses) between Coaching and Goods services. As far as possible efforts are made to identify and allocate the expenses under each abstract directly to Coaching and Goods services. However joint items of expenses are apportioned between goods and coaching services on the basis of certain ratios developed with the help of various costing techniques. Result of this step is available in Statement 15 of Annual Statements.

FREIGHT COSTING
• After segregating the freight expenses under each head of account, they are required to be regrouped under following functional Groups :
• 1. Running (a) Through Goods
• (b) Van and shunting goods
• 2. Marshalling
• 3. Terminal Operation
• 4. Transhipment at Break of gauge point
• 5. Special Services for smalls (Repacking)
• 6. General overhead charges

For this, various statistical parameters which contribute in above mentioned areas are analysed in the form I of the Green Book to determine the ratios in which the expenses are to be apportioned in the above mentioned categories. The performance factors for through trains and Van & Shunting goods trains are also determined at this stage.

Applying these to the relevant head of account, the freight expenses are split into above mentioned functional groups.
Development of unit costs
Unit Cost is the cost per unit of out put for various functional group of transport.
Green Book is the Basic document for developing the goods unit costs.
It consists of seven schedules A to G.
Schedule A provides frame work for distributing Working expenses for goods services including interest and depreciation among various functional groups of services. The general over heads are then distributed to these functional groups on pro-rata rupee basis. Expenses of running (line haul cost) are further split in the cost of carrying unit i.e., wagon and cost of hauling pay load.
In the Schedule B, working expenses of various functional goods services are divided by the corresponding service units to arrive at the Unit costs.
Some of the Unit Costs of Schedule B are
Terminal Cost per tonne.
Total Terminal Cost per wagon in full loads
Line haul cost per train km.
Line haul cost per wagon km. etc.
Schedule C
This schedule consists of the Performa for further segregation of expenses into different sub-activities like expenses of documentation, traction-wise expenses of train engines, other operating expenses.
Schedule D This schedule uses the segregation of expenses carried out in schedule C, to arrive at various Unit costs. It gives the cost of documentation per invoice, cost of traction per engine hour, cost of traction per 1000 GTKM for each traction separately.
Schedule E
In this schedule the expenses under different abstracts are combined for computation of Unit Cost for various facets of operation such as cost of Terminal operation, cost of transhipment, cost of repacking etc. Unit costs are also calculated separately for through trains and Van & Shunting goods trains.
Schedule F
Under this schedule, the total expenses under each facet of operation as worked out in Schedule E are divided by the related service units to work out the unit costs. Central charges are also calculated as percentage of working expenses. Some of the unit costs worked out in schedule F.

Terminal services
(a) Cost of documentation per invoice
(b) Cost of handling per tonne
(c) Other terminal expenses per tonne
(d) Other terminal expenses per wagon (full load)
Repacking
(e) Cost of repacking of smalls per tonne per handling
Transhipment
(f) Cost of transhipment per tonne per transhipment
(a) BG
(b) MG
Marshalling
(g) Cost of marshalling per wagon per yard handled.

Prov & Maintenance of wagons
(h) Cost of Prov. And maint. Per wagon

Line Haul(Movement) costs
(i) Cost of line haul per 1000 GTKM for each traction separately
(j) Cost of line haul (other transportation) per 1000 GTKM
(k) Cost of line haul (other transportation) per Train Km.
(l) Cost of line haul track and signalling per Train Km.
(m) Cost of line haul track and signalling per 1000 GTKM
Overheads
(n) General overhead charges as % of direct costs
(o) Central charges as % of Total cost.

Schedule G
This schedule contains the summarised results of unit costs as worked out in Schedule B, D and F,

Group A Costs
These are fully distributed costs and include interest, depreciation and overheads.

Group B Costs
Under Group B Costs, Unit Costs for each type of traction and also for through goods and Van and shunting goods train are given. Over heads & central charges are shown separately as percentages. For working out total costs, these will have to be added to the Unit Cost at the end.
COSTING OF COACHING SERVICES
The Coaching expenses (excluding expenses for EMU services) are split
into various components in 19 stages as follows

Stage I - Distribute the expenses in Running and Terminals and overheads.
Stage II - Distribute Running expenses into Passenger, parcel and catering.
Stage III – Distribute Passenger expenses, into M/Exp and Ordinary.
Stage IV – Further Distribute Passenger expenses class-wise.
Stage V – Distribute Running Parcel into M/Exp. And Ordinary
Stage VI – Distribute Running Catering into M/Exp and Ordinary
Stage VII – Distribute Terminal Expenses into Booking, Ticket, Enquiry, Special. Services, Misc. Terminal, Parcel and Catering.
Stage VIII – Distribute booking expenses into M/Exp & Ordinary
Stage IX - Further distribute booking expenses class-wise.
Stage X – Distribute Ticket expenses into M/Exp & Ordinary.
Stage XI – Further Distribute Ticket expenses class-wise.
Stage XII – Further Distribute enquiry expenses into M/Exp & Ordinary.
Stage XIII – Further distribute enquiry expenses class-wise.
Stage XIV – Distribute expenses on special services into M/Exp. & ordinary
Stage XV – Further distribute expenses on special services class-wise
Stage XVI – Distribute Misc. Terminal expenses into M/Exp & Ordinary
Stage XVII – Further distribute Misc. Terminal expenses class-wise
Stage XVIII – Distribute Terminal Parcel expenses into M/Exp. & Ordinary.
State XIX – Distribute Terminal Catering expenses into M/Exp & Ordinary.
After carrying out the distribution at each stage, the overheads are also apportioned on pro-rata basis.
In the next stage the Running expenses are further regrouped under following groups.
1. Running Diesel (Repair & Maintenance Direct Expenses)
2. Running Electrical (Repair & Maintenance Direct Expenses)
3. Other transportation expenses including Train passing staff
4. Expenses of Engineering Department. (Track)
5. Cost of Signalling
6. Cost of provision and maintenance of carrying units
7. Terminal services( Booking)
8. Terminal Services (Tickets)
9. Terminal Services (Enquiry & Reservation)
10. Terminal services (Spl. Services)
11. Terminal services (Misc)
12. Terminal Services (Catering)
13. Terminal services (Parcel)
After grouping the various expenses under the above mentioned groups, Unit Costs are worked out for various Coaching Services.
Summary Form 6 – Overall Unit costs of services including overhead.
Summary Form 7 – Overall Unit Costs of services excluding over heads
Summary Form 8 – Unit Costs of Mail Express services excluding overheads
Summary Form 9 – Unit Cost for Ordinary services excluding overheads
Summary Form 10 –Class-wise Unit Costs for Mail Express services
Summary Form 11 –Class-wise Unit Costs for Ordinary Passenger Services



















TRAFFIC ACCOUNTS
q Passenger earnings exceed freight earnings
q Formation of SWR reduction in Passenger earnings 22 %, Freight earnings 11 % over all 15 %
q Will not affect the OR – expenditure reduced by 18 % MYS, SBC, MYSS, CN/BNC
q Railway receipts freight to T/MAS for auditing


Distance
Weight
Class


Previously rationalized routes chargeable weight classification
Incorrect statements are prepared to detect over/under charges
Error advice sent to stations- accepted/disputed
Debits – Special Credits/ Debits
Now shortest











q Remittance by Traveling Cash Chest – cash bags –
q Cash Remittance Notes(in two parts), N I statement – cash office – cash witness – voucher 1 to station – 2 to Traffic accounts
q Auditing vouchers – Part A of Traffic Book is prepared
q Remittance in bank – credit scrolls to SAO/Books – for reconciliation – remittance into Bank – statement to Traffic Accounts
q Station balance sheet – audited Vs balance sheet
q Out standing section – disputed / accepted
TRAFFIC BOOK

A
B
C
D
Station earnings
Apportionment from
& to Foreign railways
Earnings not accounted
In stations – DAO/statements
Catering license Fee, cost of
Tender forms, rent received ,
REHLS [1] – through TC [2]s
CONCOR [3] earnings
Home railway
Ledger ( local &
apportioned)




CONCOR EARNINGS

CONCOR pays to railways for haulage 20/40 TEU ( Twenty feet Equivalent Units)
Over one KM for
International
Domestic



Loaded empty loaded empty

Different rates for
Domestic Rs 6 foreign Rs 8

Audit objection
1 each flat rail freight car can carry 2 TEU hall is running empty i.e. each flat carries 20” container only – loss in haulage, bogies, engines etc

Military warrants
Rs 20 per vouchers as service charges on realization credited to Demand No 3 299 (salary head)

Assessment:
Passenger 6 A both originating and carried
Freight 7 A originating
7 C carried

Budget
Passenger Freight



Coaching
Card tickets closing number destination wise
ARTS Floppy
Assessment: Monthly internal targets from Divisions to Traffic Commodity and division wise
Apportionment
Based on distance ( KMs) chargeable not track KM
Eg MAS – NDLS 2190 KMs
MAS – GDR 131 KMs
Therefore apportionment = 138/2190 * 100 = 6 % done by Computers










[1] Railway Employees Liberalized Health Scheme
[2] Transfer Certificates
[3] Container Corporation – a subsidiary of the Ministry of Railways