Sri Lanka Railways continues to grapple with financial and operational inefficiencies, impacting both passenger and freight services.
Decades of underinvestment, maintenance failures, and mismanagement have left the railway system struggling to meet demand. Aging infrastructure, outdated locomotives, and inefficient service schedules have further worsened the situation.
While recent efforts to improve revenue streams through increased passenger fares have helped boost income, the department still operates at a loss.
Addressing these challenges requires significant investment, modernization efforts, and improved management to transform Sri Lanka’s rail network into a reliable and efficient mode of transport.
In 2023, a total of 122,426 train journeys were scheduled, but only 36,771 operated on time. Additionally, 10,531 journeys were canceled, meaning that 70% of scheduled services faced delays or cancellations.
The National Audit Office (NAO) identified frequent strikes, often considered unjustified, as a major factor that disrupted services and caused inconvenience to the public.
Despite Sri Lanka Railways (SLR) handling 6% of total passenger traffic and 6.5% of freight transport, the department has struggled to expand its market share.
An audit report revealed that the railway network, which covered 1,521 kilometers in 1934, had been reduced to 1,465 kilometers by 2023, even after the addition of 32 kilometers through the extension to Beliatta. This reflects a net loss of 56 kilometers in track length.
In 2023, SLR transported 109.15 million passengers, covering 7,043 million passenger kilometers. The railway system also moved 1.99 million tonnes of goods. Revenue rose to Rs. 16,079 million, up from Rs. 11,076 million in 2022.
Passenger revenue alone increased by Rs. 4,064.26 million, largely due to more travelers opting for trains in response to rising bus fares. However, operational costs remained a significant challenge, with total expenditure reaching Rs. 38,983 million, comprising Rs. 27,840 million in recurrent costs and Rs. 11,143 million in capital expenses.
Several issues were identified in the audit, including the unapproved payment of employee bonuses between December 2004 and December 2023, based on outdated salary calculations from November 2004.
Regulations require these bonuses to be reviewed every six months, but the last review was in November 2002. The NAO has recommended an immediate reassessment of the bonus scheme.
Additionally, Rs. 200 million was allocated in the 2022 interim budget for a railway project to transport vegetables, with Rs. 198 million spent on refurbishing five railway compartments. However, the project was never implemented. While three sub-departments utilized nearly 49% of these funds for alternative projects, SLR defended the expenditure, stating that the money was used for long-term railway improvements.
The audit also found inefficiencies in the online ticket booking system. Currently, only passengers with rail ‘warrants’ can reschedule bookings, while others cannot. Furthermore, when a booking is canceled, those seats remain blocked in the system, leading to empty seats on certain trains.
Several instances of mismanagement of railway assets were highlighted. Thirteen Romanian-manufactured railway carriages were left unused for over two years at Jaffna station, while 69 wagons and carriages abandoned across four stations deteriorated over time.
The report also noted that ten M11-Class locomotives purchased under an Indian credit line in 2019 and 2020 at Rs. 765 million each had a high failure rate, with five engines becoming inoperable within four years.
Additionally, 132 government-owned railway quarters in five stations remained unoccupied due to the lack of basic amenities such as electricity and water.
