Metro hurtles into financial abyss <javascript:clippopup(1540854);>
NIDHI SHARMA
*[ Monday, May 22, 2006 12:30:00 amTIMES NEWS NETWORK ]*
NEW DELHI: It is official now. Delhi Metro Rail Corporation (DMRC) is
suffering losses every year. And official statistics put this figure at Rs
76.33 crore at the end of 2004-05 financial year.
The first elaborate review of DMRC's accounts and balance sheet shows that
all is not well with Delhi's mass rapid transport system.
The revenue generated during the 2004-05 financial year was Rs 72.26 crore.
This includes income from operation, consultancy and rentals from
properties.
The total expenditure (before adding depreciation and interest on loans) was
Rs 52.25 crore. The end result, however, after adding depreciation and
interest and other costs puts the loss at a whopping Rs 76.33 crore.
If seen independently, the losses don't seem much. But if one compares it to
the 2003-04 financial year, it would mean a 135.24% increase in losses. DMRC
had incurred losses worth Rs 32.45 crore in 2003-04.
The balance sheet also shows that DMRC is gradually falling into the trap of
all loss-making corporations. The maximum expenditure is on salaries, wages,
allowances and other employee costs.
About 23% of the total expenditure in the 2004-05 fiscal, was only in
salaries and wages. This is the same trend that agencies like MCD and DTC
reflect.
The maximum expenditure is on employee salaries. For DMRC also, the
expenditure under this head has been increasing. There has been a 67%
increase under this head over the past one year.
This could be because of an increase in the number of people employed by
DMRC. Interestingly, DMRC claims that it has one of the lowest people per
kilometre ratio in the world.
This is not all. The Comptroller and Auditor General (CAG) has pointed out
some faults in the accounts maintained by DMRC.
According to CAG report on the statement of accounts for 2004-05, the
balance sheet has not been maintained properly because of which, there has
been an understatement of current liabilities on DMRC to the tune of Rs
138.69 crore.
In case of accounting policy, CAG has observed: "During the year 2004-05,
the company continued to adopt lower rates of depreciation in respect to
certain fixed assets pending approval of the government. This has resulted
in understatement of depreciation and loss for the year by Rs 14.74 crore,
and overstatement of net fixed assets to the same extent. The resultant
cumulative impact as on March 31, 2005 is Rs 23.69 crore on each of these
heads of the accounts."
NIDHI SHARMA
*[ Monday, May 22, 2006 12:30:00 amTIMES NEWS NETWORK ]*
NEW DELHI: It is official now. Delhi Metro Rail Corporation (DMRC) is
suffering losses every year. And official statistics put this figure at Rs
76.33 crore at the end of 2004-05 financial year.
The first elaborate review of DMRC's accounts and balance sheet shows that
all is not well with Delhi's mass rapid transport system.
The revenue generated during the 2004-05 financial year was Rs 72.26 crore.
This includes income from operation, consultancy and rentals from
properties.
The total expenditure (before adding depreciation and interest on loans) was
Rs 52.25 crore. The end result, however, after adding depreciation and
interest and other costs puts the loss at a whopping Rs 76.33 crore.
If seen independently, the losses don't seem much. But if one compares it to
the 2003-04 financial year, it would mean a 135.24% increase in losses. DMRC
had incurred losses worth Rs 32.45 crore in 2003-04.
The balance sheet also shows that DMRC is gradually falling into the trap of
all loss-making corporations. The maximum expenditure is on salaries, wages,
allowances and other employee costs.
About 23% of the total expenditure in the 2004-05 fiscal, was only in
salaries and wages. This is the same trend that agencies like MCD and DTC
reflect.
The maximum expenditure is on employee salaries. For DMRC also, the
expenditure under this head has been increasing. There has been a 67%
increase under this head over the past one year.
This could be because of an increase in the number of people employed by
DMRC. Interestingly, DMRC claims that it has one of the lowest people per
kilometre ratio in the world.
This is not all. The Comptroller and Auditor General (CAG) has pointed out
some faults in the accounts maintained by DMRC.
According to CAG report on the statement of accounts for 2004-05, the
balance sheet has not been maintained properly because of which, there has
been an understatement of current liabilities on DMRC to the tune of Rs
138.69 crore.
In case of accounting policy, CAG has observed: "During the year 2004-05,
the company continued to adopt lower rates of depreciation in respect to
certain fixed assets pending approval of the government. This has resulted
in understatement of depreciation and loss for the year by Rs 14.74 crore,
and overstatement of net fixed assets to the same extent. The resultant
cumulative impact as on March 31, 2005 is Rs 23.69 crore on each of these
heads of the accounts."