The CAG has observed that although with the abolition of the freight equalisation fund from January 16, 1997, SAIL was free to charge actual railway freight from customers, it charged ceiling freight, which was more than the actual freight. Thus, it suffered a loss of Rs 132.85 crore from 1992-93 to 1995-96. Further, it suffered a loss of Rs 8.14 crore on railway freight towards disposal of 233,000 tonnes of stock. The company could not recover any compensation from the Government on these accounts.

Due to non-recovery of siding and haulage charges from the customers after decontrol, the company suffered a loss of Rs 18.88 crore up to December 1994.SAIL could not recover Rs 5.22 crore from a customer due to its failure to amend the escalation clause of the sale order immediately after the decontrol.

The report said that SAIL incurred an avoidable expenditure of Rs 43.18 crore on diversion of 10,83,000 tonnes of finished stock from 29 branches to other branches during 1993-94 to 1997-98. In the Bokaro, Guwahati, and Chennai branches, such diversion was 566 per cent, 31 per cent, and 29 per cent respectively of the total sale.

It further pointed out that the company started booking orders against the memorandum of understanding (MoU) since 1994 with high-stake customers. It suffered a loss of Rs 5.52 crore by extending additional benefits to MoU customers in 27 cases.