After the crash of the Sarmiento Train at Once station, which killed 51 people, the railway system was under scrutiny. Nine days after the catastrophe, the General Audit’s Office (AGN, for its acronym in Spanish) published its final report on the Train Company of Buenos Aires, also known as TBA, with alarming observations: The National Commission for Transport Regulation (CNRT, for its acronym in Spanish) detected irregularities of 100% in the maintenance, monitoring, and repairing of "security-sensitive elements", such as brakes, wheels, and wheel-axle assembly of railroad cars. 

The report approved this afternoon by the School of auditors of the AGN aimed at verifying controls performed by the CNRT and the Ministry of Transportation regarding TBA's contractual obligations regarding maintenance, public and operational safety of passengers, in addition to assessing the controls performed in the redetermination process of subsidies, all on the period from 2007 to 2009.

The "rolling stock" of the railroads (railroad cars and locomotives) should be periodically subjected to technical reviews "according to the requirement of the concession contract." The most important "refers to the related parts of the brakes, the control wheels and axles, overhaul and repair of coupling elements, among other things," which is known as "Rev. ABC ".

To develop its monitoring, the CNRT defines a "theoretical estimate of interventions," and compares it to the maintenance operations actually performed by the company.

The audit noted that this "high deficit has a direct impact on the safety of the railroad system."

In addition, the review noted that Rev. ABC "cannot be replaced by a larger number of other tests with lower value" and stressed the "historical lack of information" of "TBA by not disclosing the mileages traveled by other cars in the fleet. This last shortcoming "was the subject of observation in previous audit reports and a cause in claims made by the CNRT".

High Degree of Deterioration of Roads and Lack of Maintenance

If the performance of the company was a deficit in the maintenance of railway vehicles, things went no better with the state of roads and related construction jobs. The CNRT found in their inspections, "aged crossties", "trampled boards", "worn down side rails", "trampled boards caused heavy blows on the railroad cars", "weeds", among other shortcomings. The audit highlighted on the observations of the Committee on Transport: there is "a high degree of deterioration of roads and infrastructure due to a lack of maintenance." This causes as already noted on several occasions, "irreversible failures and increased costs for recovery."

AGN said that "plans for road maintenance submitted by TBA for 2009 were insufficient to cover the length of the entire system." The report of the CNRT established that "the tasks of reviewing tracks proposed by the company covered less than 10% of the railroad system," indicating that the comprehensive study would be completed "10 years in the future, when the cycle established by legislation is four to six years." To this, they add that the projects "were presented past the due date, just like the monthly progress of its implementation."

Penalties

The CNRT proved that 26 accidents in 2008 had been caused by TBA, it amounted to "failures in maintenance" so that "it led to the imposition of fines" for $ 2,840,000.

During 2009 derailments and collisions reached 41 and persisted shortcomings in preventive checkups, inspections, and repairs of the property subject to the lease. In this case, the Commission imposed a penalty of $ 1.8 million to TBA.

In the same year, the Commission "rose to the Secretary of Transportation 53 cases (of which 15 were on TBA) for breaches during 2007. Of that total, 12 "are paralyzed." The AGN concluded that "the above makes clear the delays in implementing authority to define the application of penalties."

None of the fines mentioned had been made effective at the time of the audit and that is why the federal watchdog proposed to “further the procedures to effectuate the application of sanctions."

Subsidies

It is important to note that TBA incurred in all the shortcomings mentioned above even though "between 2003 and June 2010 it received $ 1,924,625,755.67" on subsidies. These state subsidies "were taking an increasing share of income of the company." In 2003 "the concept represented 32.64% of concession revenues, while in 2009 that number increased to 75.63%," which means "an increase of 132%," according to the federal watchdog. Furthermore, "between 2006 and 2010 the monthly transfer allowance increased by 146%."

In this regard, the report explains that "according to the contract there can be a redetermination of the fee, or the fee subsidy, when a party invokes any increase or reduction of more than 6% in areas such as personnel, materials, energy, among others.”

The "majority" of the adjustments were in the "Personnel" and, according to the AGN, "is carried away from the procedure laid down in the regulations." However, “the functions to be performed by the staff could not be certified or they failed to verify if the personnel were effectively fulfilling the duties for which they had been hired." It's no minor detail that in January 2003 TBA had 2,952 workers and by July 2010 that number had increased to 4,464.

For delays incurred by the Transport Department in resolving claims for the redetermination of benefits "a credit balance for interests was generated that could have been avoided, it reached a total of $59,334,760." In fact, the AGN states that the Office of the Comptroller General (SIGEN, for its acronym in Spanish) had already said in 2009 that "the delays incurred in processing records derived in an economic loss to the Federal Government for the payment of interest or updates."