Sunday, March 29, 2009

GENERAL EXPENDITURE

FEASIBILITY REPORT TECHNO – ECONOMIC STUDY:
Since the Planning Commission monitors all infrastructural and developmental works, prior to incurring the huge capital expenditure, a feasibility report or a techno –economic study is conducted to gauge the monetary value of the project. Plan Heads are used to indicate the source of funds and these are common to all ministries.
RECONNAISSANCEThis is a rough and rapid survey without any technical instrument.
The purpose is to assess thePRELIMINARYConsists of a detailed instrumental examination of the route/s selected as a result of reconnaissance survey in order to obtain a close estimate of the probable cost of the projected railway. Based on this survey, the decision whether the line is taken up of not is usually taken in conjunction with Traffic survey.
TRAFFIC SUVEY: In this survey no sophisticated survey equipments are used.TRAFFIC This is detailed survey of the traffic conditions and prospects of an area with the object of determining the most promising (economic) route for the Rly line in the area, the probable traffic. Based on this survey only project is determined
FINAL LOCATIONThis is a more sophisticated and detailed technical survey and is normally conducted after once the justification of the project is accepted, based on the Preliminary Survey. The alignment of the line is finally selected is fully staked on the ground with a “theodolite” or “ tachometer” and the report with detailed plans and sections prepared only after the final location survey has been completed and the report received by the Rly Bd , sanction for the project is accorded.Estimate is an assessment of quantum of labour, material and other services required to complete a work and it is expressed in monetary values.
ABSTRACT ESTIMATE - 702 E,
DETAILED ESTIMATE- 707 E,
SUPPLEMENTARY ESTIMATE - 707 E,
REVISED ESTIMATE - 708 E,
PROJECT ABSTRACT ESTIMATE - 709 E,
PROJECT DETAILED ESTIMATE -710 E,
COMPLETION ESTIMATE - 713
ABSTRACT ESTIMATE is prepared in order to enable the authority competent togive administrative approval to the expenses to judge the necessity, utility and Financial prospects and to enable the authority to gauge the magnitude and Nature of the work contemplated. These estimates avoid the delay and expenses Of preparing estimates in detail at a stage when the general desirability of the work Has not been decided. Para 702
DETAILED ESTIMATE is prepared to secure technical sanction to the work After the administrative approval is accorded. These estimates are prepared In sufficient details to enable the competent authority to ensure that the cost Indicated in the abstract estimate in not exceeded. The work is taken up only After the sanction of this estimate. Para 707 E
PROJECT ABSTRACT ESTIMATE is prepared after the Final Location is completed. This is submitted to Rly Bd showing the abstract cost of the project under Different sub heads of allocation showing further the unit cost and rate of Expenses per kilo meter of the line for the whole line and sections of the line. This is accompanied by i. an abstract estimate of junction arrangementsii. A narrative report of explaining the proposed expenditure under capital headslike workshop, stores, buildings, plant & machinery etc iii. Detailed estimatefor the civil construction.This estimate is submitted for purposes of Parliamentary and Administrative Approval and necessary funds for taking up the work are allotted to the Rlys Based on these estimates. Para 702 E
PROJECT DETAILED ESTIMATE is detailed working estimates of all works Included in the project and is prepared after a careful examination of all Various details of construction involved in the project. Once this estimate is Prepared preparation of further working estimates should not arise except Some supplementary or revised estimate becomes necessary. This is prepared and submitted to the competent technical authority for his sanction. Details of junction arrangements, main line and branch line estimates, Divisions of project including estimates for the alternative alignments and For the length with it would supersede if adopted to be furnished. It should be Split geographically based on the sections likely to be opened for traffic in stages
SUPPLEMENTARY ESTIMATE is prepared for any item of work which ought to have been included in the first instance in an estimate already sanctioned but has not been included, which it is found later should be considered as being a part of or a phase of an estimate already prepared and sanctioned, if it cannot be met out of contingencies. Such estimates should be prepared in the same form and the same degree of detail as the main detailed estimate and for all purposes be treated as part of the detailed estimate.
REVISED ESTIMATE As soon as it becomes apparent that the expenditure on work or a project is likely to exceed the amount provided for in the detailed estimates or construction estimate ( including supplementary if any) a Revised Estimate should be prepared and submitted to competent authority. It should unless otherwise ordered by the sanctioning authority, be prepared in the same form in the same degree of detail as the original estimate. It should be accompanied by a comparative statement showing the excess or savings under each sub head a/c against the latest sanction.
COMPLETION ESTIMATE is prepared in super cession of construction estimate This estimate shows in a tabular form the following particulars: 1. amount of sanctioned estimate 2. Actual expenditure 3.comittments on that day 4. Anticipated further outlay 5. Total estimated cost 6. Diff between sanctioned estimate and estimate cost.Check of estimates:Propriety of expenditureIncidence and classification of chargesExistence of budget provisionsFreedom from errors and omissionsCompetency of sanctionAs a Financial Advisor, it is the duty of AO to seeThe expenditure proposed is to be charged to the railway funds is properly and legitimately chargeableThat proper financial justification is forthcoming in all works requiring financial justification,That in the case of estimates for the staff quarters and other rent returning buildings the anticipated yield of rent as shown in the Rent Statement will not have the effect of reducing the return on the cost of each class of quarters to less than the dividend rate per annum.Incidence and classification of charges should be verified in an estimate according to rules of classification of expenditure as provided in the Revised Classification ( FII). In the verification certificate AO should indicate the correct allocation and the same is verified.Existence of budget provision. The provision in the budget for the proposed work should be verified with reference to the sanctioned allotment for the year. Errors and omissions should be got vetted by the executives where needed a check note indicating the errors and omissions should be enclosed to the estimate at the time of verification.Competency of sanction The powers vested with the sanctioning authority should be verified with reference to the extent Schedule of Powers and a clear indication regarding the authority competent to sanction the estimate should be given in the estimate. A certificate of accounts verification I the following form is to be appended to “incidence and allocation verified subject to the check note attached. This requires the sanction of …………………….”Minor points:1 the particulars of work should be given in sufficient detail and proper distribution should be made between cash and stores2 the allocation of each item is given and an abstraction of allocation is made3 that all incidental expenditure that can be foreseen has been provided for in the estimate4 that in the case of renewal, replacement or dismantlement, the credit for the released materials has been provided (CRRM)5 that in the case of a work to be done for other Govt depts., or private bodies provision has been made for necessary departmental charges6 that in the case of estimates for staff quarters and other rent returning buildings a Rent statement is enclosed
COMPLETION REPORT:C R of a work or project is prepared by the executive dept in the prescribed format with a view to comparing the actual expenditure on the works, sub work wise with the latest sanctioned estimate/ completion estimate. Where ever more one dept has executed the work, part CR can also be prepared in respect of their sub works for which separate sub estimates are available. Where ever the expenditure of the work exceeds 10 % with reference to the estimated cost, under each cub work explanation for the same should be given. Similarly, for any savings exceeding 20 % an explanation is given.Before the CR is drawn, the executive should ensure that all charges and receipts for the work have been fully booked to the work account. In order to help the executives in this direction, the work registers are viewed in the accounts office and where ever no bookings occur continuously for more than 3 months, such works are reported to the executive concerned thru” work suspended statement”. Based on the statement, the concerned executives should take speedy action in collecting further charges and receipts against the work so that CR may be drawn.In case of works for which no revised estimates are prepared to cover the variations in the cost, the same shall be also regularized under competent sanction through CR. The CR prepared with the help of the postings in the works registers and they are submitted to the AO where the following points are verified.that the CR has been prepared in the prescribed formatthat the entries made therein agree with those mentioned in the concerned works registersthat the credit for released material as provide for in the estimate has been adjusted against the work concernedthat the materials originally charged to the work but not used up has been returned to stores or transferred elsewhere duly affording necessary credits to ht workthat the posting of all final bills of supply or contract relating to the work have nee made in the works registerthat satisfactory explanation are given for excesses of savingsthat necessary certificate that “addenda and corrigenda” to the list of building have been issued to given in the CR.In case of deposit works a certificate that all charges have been fully booked should be entered in the register of deposit works or sidings. After checking the CR as above the same are certified for sanction of the competent authority duly indicating the authority in terms of Schedule of Powers. The CR is then suited to the competent authority for sanction and on receipt of the sanctioned CR the same is noted in the separate Register of CRs Sanctioned in the estimates register against the concerned work also in the works register.Even in the case of work where work are not finished but there is no reasonable prospect of completing the works in the near future, the Accounts of the work should be closed as in the case of completed works and CR drawn and submitted to the competent authority who has accorded the administrative approval to the work duly certified by accounts.

GENERAL QUESTIONS

In your opinion would ‘privatization’ of the existing production units improve quality and productivity ? commentAIntroduction:Of late, there is much talk of privatization of some activities of the railways. The activities are broadly classified in to core and peripheral i.e. the running of trains and the allied activities like the maintenance of coaches and wagons, hospitals, schools, colleges, welfare activities like institutes etc. there is much talk on outsourcing the peripheral activities. As such, the talk of privatization of repair workshops is in the air. The recent Public private Partnership – PPP has given fillip to such schemes.Before privatization of railways, the following points are to be seen.Railways and Balanced Economic Development:Railways in India have been the foremost agent of social transformation. The railway net work has changed the face of India. In the words of Shri P C Tandon,“ The Indian Railway System is almost a State with the State, with the largest industrial activity, the largest employer, a network of communications of track, telephone and telegraph that connects all parts of the country except the high Himalayas, moving vast number of peoples, traditionally peripatetic by nature, and quantities of goods chain of technologically advances manufacturing and maintenance units backed by it own research, development engineering and training institution of finance, higher training and teaching and consultation “. Prakash C Tandon, REPORT OF THE COMMITTEE TO STUDY ORGANISATIONAL STRUCTURE AND MANAGEMENT ETHOS OF INDIAN RAILWAYS”)Railways As Pace Maker:The Indian Railway as part of the Govt. of India has assumed of the entrepreneurial function to achieve the projected speed of economic development. Railway projects are of high cost and long gestation period. Therefore, the private sector will hardly invest in such projects, which eat away a large amount of profits. It is estimated that the cost of laying one Kilo Metre of B G rail link costs about Rs. 1 Crore. The KONKAN Railway is the best example to understand the magnitude of the cost of railway net work. Estimated to cost at Rs. 600 in 1990 now ended up with a cost of Rs. 3200 Crores in 1998.Railways as Resource Generator:For purpose of economic development, plenty of funds are required. Public Enterprises are meant to supplement the revenue of the State in a big way by appropriate pricing policies and by mopping up profits which otherwise may go to private sector. The Five Year Plans have pointed out the limitation of taxation for raising revenue and have alluded the need for raising revenues through Public Enterprises. The Third five-year Plan stated that in a developing economy the Public Enterprises constitute a ready and increasingly important source for financing investment either for the expansion of these enterprises, which yield these surpluses, or elsewhere in the economy.Railways have paid dividend to the General Revenues much more than the investment made by the Govt. of India.This is in addition to contributions to internal funds like Depreciation Reserve Fund (DRF), Development Fund (DF), Open Line Works Revenue (OLWR) and Capital over and above meeting the revenue expenditure.Railways and National Allocation of Sources:In many of the under developed countries, which are predominantly agricultural, over populated and under developed, resources are unevenly distributed among the people. The main reason for the expansion of Public Enterprises lies in the pattern of resource allocation decided upon under the Five Year Plans. In the Indian Railways the Capital expenditure is based on the National Planning Commission. For this purpose the Plan Heads maintained by the Planning Commission are incorporated in the Railways.Public Enterprises as Means to Achieve Social Objectives:A UN resolution stated that Public Enterprises plays an important and vital role in developing countries in as much as it helps in Capital Formation in fuller utilization or natural resource and in achieving a more equitable distribution of income and wealth. The Fourth Five Year Plan ,Second Draft described thus “Planning should result in greater equality in income and wealth that there should be progressive education of concentration of incomes wealth and economic power and that benefits of development should accrue more and more to the relatively less privileged classes of society and in particularly the Scheduled Castes and Scheduled Tribes whose economic and educational interests have to be promoted with special care“Avoidance of Concentration of wealth and means of production: Railways as a Public Enterprise helped to promote national objectives as laid down in the Constitution that the ownership and control of material resources of the community does not result in concentration of wealth to the common detriment. Railways being the bulk carrier are the backbone of the Indian economy. If it were to be in the hands of the private sector, the country would have faced with enormous difficulties and the private sector would have dictated terms to the country’s premier transportation mode.By treating the labour generously and by putting a comparatively low ceiling on the salaries and benefits at top level Public Enterprises has helped in reduction of disparities in income over a large area of employment. As on 31.03.2007, Railways employed 1.4 Million employees on the rolls and there are employment opportunities for every shade of jobs from software specialist to safaiwala from unskilled to specialized engineers, form clerk to financial analysts etc.Help to the underprivileged: Public Enterprises has been used to promote the development of certain backward sections of the society, namely, the Scheduled Castes and Scheduled Tribes. During 1978 Public Enterprises was also asked to make reservations in appropriate lower levels in respect of deaf, blind, and orthopaedically handicapped. Railway as a trend setter introduced the Roster Point Programme to ensure the Scheduled Castes and Scheduled Tribes get promotion by allowing the policy of positive discrimination.Further, as per the Central Govt.’s decision to extend the benefits of reservation in Jobs and Educational opportunities, Railways have earmarked percentage 27 for Other Backward Classes (OBC).Railways and Innovation:Public Enterprises have taken the responsibility to introducing certain new ideas in the process of management and administration. Accordingly, the Railway Ministry has spear headed certain Public Sector Undertakings:Public Sector Undertakings:Further, the following Public Sector Undertakings are also functioning under the Ministry of Railways.1. Rail India Technical And Economics Services Ltd.(RITES)2. Indian Railway Construction ( International) Ltd.(IRCON)3. Container Corporation of India4. Centre For Railway Information Systems5. Indian Railway Finance Corporation.6. Konkan Railway Corporation.The installed capacity of machines: various types of machinery from wheel lathe to traverser are installed in the workshops. These are meant to increase the productivity of the artisan staff. Such machinery is gradually being upgraded with the help of Workshop modernization under COFMOW – Central Organization for Modernization of Workshops. In case of corporatisation/privatization of workshops would be laid waste. Already due to modernization in coach and wagon building, the maintenance work is getting reduced. In such a situation, the installed capacity of machinery is to be utilized even if it meant doing work for outsiders – other Govt. depts, Ministries; State Govt. works private companies, Port Trusts, corporations and private individuals.The productivity of the labour: Railways being the largest employer of variety of skilled people large number of employees from unskilled to Master Craftsman exist in the workshops. In the past under steam loco scheme, the surplus employees were redeployed elsewhere. The trauma of the scheme still exists. The make use of the productive labour, the outside works can be executed in workshops as done by Defence workshops and Central workshop/Ponmalai. Such works can be profitably done by reducing the proforma on cost to maximum extent as per the guidelines given by the railway board in case of production units for enabling them to participate in the Global Tenders.Safety concerns: Railways being the lifeline of the Indian economy, safety concerns ought to the first priority. The corporatisation/privatization of workshops might jeopardize the safety of the rolling stock.Innovation and bench marking: To overcome such a disparaging situation, many production as well as repair workshops have shown keen interest in achieving bench marking and encouraging innovative ideas to increase the productivity of the workshop employees.Modernization: Raiwlay workshops have been taken up for massive modernization programme. The centre for modernization of workshops (cofmow) is formed with this aim to modernize railway workshops. Through various programmes like modern machinery, redesigning of workshop layout, improved working conditions, provision of rest rooms, revision of assembly lines, improved traversers, modern cranes, modern painting facilities including poly urethane painting, etc the productivity of the workshops have definitely improved.ISO certification: With changing scenario of globalization, the Indian railway workshops are gearing up to International standardization levels. Many workshops including production and repair workshops have obtained ISO certification, environmental certification etc for global competition and acceptance. The documentation process for ISO certification has identified the core and peripheral activities in workshops and the procedure for these activities have been laid down. Wherever necessary the outsourcing of the peripheral activities is done.Conlusion: privatization/corporatisation of the railways have not paid fruitful results all over the world. From the british rail to Japanese rail the process was a fiasco. The story is similar to all other railways primarily the massive rail networks, the multitude of personnel to manage, the huge investment in developing infrastructure and rolling stock and the public demand to keep railways as a public utility and not as a commercial concern. Thus the Indian railway workshops are poised to great heights even without being privatized/corporatised and are on the threshold to take up even outside work to utilize the full installed capacity of the workshops.

Friday, March 20, 2009

DEPARTMENTAL EXAMINATIONS IN ACCOUNTS DEPT OF INDIAN RAILWAYS

APPENDIX III A NOTES
PREPARED BY
D XAVIER GNANARAJ AFA/WII/PER

Transfer price should be subsidized out of the profits made from sale of products of a workshop to a non railway customerQWhy overheads (on cost) in a railway production unit very heavy/ are not railways being priced out in competitive export tenders on account of this? If export tenders are freed from the burden of proforma on cost and township overhead what will be the implication?ABesides direct expenditure on labour and materials incurred on a job, in production units, there are cer­tain expenditure which can not be directly charged to jobs but included in the cost of production on certain equitable basis. These indirect expenditure are term­ed in production units as overheads. Para 1317 W. The overheads in a production unit are classified on commercial pattern into four categories to ensure proper control and equit­able distribution of indirect expenses on cost of pro­duction. These are as under: —(i) Factory overhead(ii) Administrative overhead(iii) Township overhead(iv) Stores overheadSeparate standing work orders designed for collec­tion of overhead expenditure in respect of each of the above. For facility of collection, analysis and control of overheads falling under the above­, separate expense numbers are allotted. The vouchers containing a charge to overhead expenses should bear the appropriate allocation as under:S.W.O.No. Overhead Expense No. Shop/Department.(i) Factory Overhead.—This should generally comprise of:(a) All indirect expenses of production shops.(b) All indirect expenses of production-cum-service shops.(c) Expenses of Apprentices attached to main shops.(d) Expenses of Dy. CME(W)/Work Manager's office including Planning And Progress, Preplan­ning, Estimating etc. offices.(e) Expenses of Time Keeping Organization.(f) Expenses of works canteens including meal sheds.(g) Depreciation of Building, Plant and Machinery of shops and Departments mentioned above.(h) Electric charges consumed by departments and shops mentioned above.(i) Credit for return of materials, interest and profit earned for works done for outsiders etc.para 1318 W(ii)Administrative Overheads.—These include:(a) Expenses of General Managers office and other general administrative offices.(b) Electric charges concerned by the various offices included in (a) above.(c) Credits on account of return of materials, diet charges etc.para 1319 W(iii)Township Overheads.—These comprise of:(a) Expenses of civil engineering deptts.(b) Expenses of water works, sanitation, horticul­ture etc.(c) Electricity consumed by the above departments and township.(d) Depreciation of Buildings, Plant and Equip­ments etc. of above Departments and Township.(e) Credit for recovery of house rent, electricity and water charges from staff and outsiders and re­turn of materials etc. by the Departments men­tioned above. Para 1320 W(iv)Stores Overheads.—These comprise of—(a) Cost of stores department in headquarter or elsewhere.(b) Depreciation of buildings and equipments of the various stores offices/Departments.(c) Inland handling and freight charges not allocat­ed to stores directly.(d) Clearance from Stock Adjustment Account.(e) Cost of pattern supplied by the Administration to suppliers as per agreement.(f) Cost of replacement and rectification of defective and deficient materials supplied by the stores departments and not recoverable from Firms.(g) Credit for return of materials allocable to stores Departments and for incidental, freight and depart­mental charges realised on sales. Para 1321.WAllocation and Apportionment.—Overhead expenses are allocated to departments or cost centres responsible for the expense as far as practicable. Such of the expenses, which cannot be conveniently allocat­ed to the responsible or chargeable Cost Centres in the first instance, are allocated to incurring Departments for apportionment to the departments/Cost Centres in proportion to services rendered. Para 1322 WThe factory, Administrative and Township overheads are levied on production jobs on 'Direct Wages' (ex­cluding Incentive Bonus). The percentages of Factory overhead are worked out each for Administrative and Township overheads. A single percentage rate is also worked out for stores overheads for levy on 'direct stores'.Method of Working out Percentages for Over­heads.—The overhead percentages for a financial year are worked out on the basis of indirect expendi­ture provided through the original Budget estimates of labour, material and other expenses are first analysed by the various Departments.While expenses provided for the departments other than shops are wholly in­direct, the provisions made for shops comprise both direct and indirect charges. The break up of the in­direct expenses under various shops is furnished by the Production office on the basis of past actuals, latest trends and anticipated changes.Item-wise provisions of indirect expenses are then tabulated in a statement wherein expenses of the departments falling under di­fferent overheads are grouped. The percentage of ex­penses of service shops and departments etc.,to the beneficiary departments will then be worked out on the total indirect expenses of shops and departments avail­able in the statement mentioned above.The aggre­gates of indirect expenses after including results of ap­portionment as mentioned above will represent the Factory overheads for different production shops Ad­ministrative and Township overheads for the workshop as a whole. Para 1323 WThese are related to the corresponding estimated 'direct labour' or direct stores, as the case may be and percentage, rates worked out on the fol­lowing formulas: —(i) Factory overhead (FOH) =Total FOH for the shop/ Total direct labour of the shop x 100(ii) Administrative overhead (AOH) % = Total AOH / Total direct labour on the entire workshop x 100(iii) Township overhead (TOH)% = Total TOH / Total direct labour on the entire workshop x 100(iv) Stores overhead (SOH) % = Total SOH / Total direct stores x 100Review of Overheads.— The original budget estimates are later reviewed and revised through August Review. Revised Estimates and Final modifica­tion. The overhead percentages are worked out each time revised estimates are submitted on the basis of revised figures and percentage rates revised, whenever necessary. para 1324 WThe disadvantage of the PUs is that the producer and consumer are the one and the same i.e. the Indian railways. The unit price/ transfer price is adopted by dividing the total cost involved in the PU divided by the number of physical outturn. It is a simple average costing. These overheads are otherwise cannot be charged elsewhere. The only allocation that is followed in the Pus is the demand No 16 Creation of assets. The maintenance demands ie demand no. 3 to demand no.12 are not operable in the Pus.However, railway board have considered the hardship of the Pus in global tenders and have issued circulars.As a result, the production units are unable to participate in the global tenders. Railway Board have considered the constraints and have issued notification under the subject delegation of powers to GM for making their product competitive in international market.Accordingly,1. the profit margin can be reduced up to 3 %. In case the profit is to be reduced below 3 % it should be done under exceptional circumstance with the approval of railway board.2. proforma charges can be reduced up to 2 %3. variable overheads should be charged fully4. fixed over heads can be reduced up to 5 %5. Warranty charges should be levied at the rate of 2 % of manufacturing cost. The warranty of purchase items will be borne by suppliers as per IRS conditions6. contingencies and unforeseen circumstances should be charged at the rate of 1 %7. Development of design for changes from the standard rolling stock as per customer requirement will be done by concerned Production Units in consultation with RDSO wherever necessary. RITES/IRCON will pay developmental; charge for the same terms mutually agreed upon between RITES/IRCON and Production Units8. the benefit of MODVAT & duty draw back should be passed on to RITES/IRCON while framing the quote9. in case of special fittings, equipments are required as per customer’s demand, the price be increased based on price differential from IR’s standard equipment.10.Mobilization advance of 10 % should be take3n from RITES/IRCON prior to taking the work in hand by Production Units.11.The above pricing will be subject to the following conditions : a. The pricing will not have any linkage with the transfer price adopted for the railway book adjustment b. no additional infrastructure would be created for export c. the requirement of manpower if any be regulated strictly as per extant rules and policies.12.the Production Units will follow the standard format for calculating the export price of rolling sock as per annexure APRICING OF ROLLING STOCK FOR EXPORT ANNEXURE A1. Material Cost =2. Store Overhead = % 13. Modvat Benefit & =Duty Draw Back =4. Direct Labour Cost = ( Man Hours X Avg Hourly Reate5. Variable Overheads = Variable Components Of Foh, Aoh& Toh To Be Charged Fully As % OfItem No 46. Fixed Overheads = 5 % Of Fixed Component Of Foh, Aoh& Toh To Be Charged Fully As % OfItem No 47. Cost Of Addl Jigs & =Fixtures If Any8. Manufacturing Cost = (1+2+4+5+6+7+) – (3)9. Proforma Charges = Minimum 2 % Of Item No 810.Total Manufacturing = 8+9Cost11.Profit = Minimum 3 % Of Item No 1012.Contingencies &Unforeseen Circumstances= 1 % Of Item No 1013.Warranty @ 2 % = 2 % Of Item No 1014.Development Cost =Including ManpowerWhere Capacity Is NotSurplus15.Price* =* price is Ex-Works excluding Duties and TaxesThe question of Transfer price should be subsidized out of the profits made from sale of products of a workshop to a non railway customer is to be answered in affirmative. The huge investment in terms of machinery and infrastructure in Pus are done on behalf of the entire Indian railways and naturally whatever profit is earned from non railway customers by way of selling the rolling stock should be use to subsidize the transfer price to home railways.