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5 Mar, 2007

Indian Railways Upgrades To Regain Traffic Lost to LCCs

Hitting back against low-cost airlines to whom it has lost considerable business in the last few years, Indian Railways has announced plans for four high-speed railway links, 100 budget hotels on unused railway land, a systemwide cleanliness campaign and major changes in fares and reservation systems.

Presenting the 2007-2008 budget to Parliament last Monday, India’s Union Minister of Railways Mr Lalu Prasad Yadav said the once chronically money-losing enterprise is “poised to create history by generating a cash surplus before Dividend of Rs 200 billion as against Rs 147 billion in 2006-07”.

Part of a development strategy set in motion in 1998, the new plans are designed to boost services for the common man as well as recoup the premium business lost to the low-cost airlines.

Indian Railways runs around 11,000 trains daily, of which 7,000 are passenger trains, carrying roughly five billion passengers a year. It is India’s premier transport organization, the largest in Asia and claims to be the second largest in the world under a single management.

Mr Yadav said IR has decided to conduct pre-feasibility studies for high-speed trains operating at 300-350 kms per hour, one each in India’s Northern, Western, Southern and Eastern regions. All alternatives including Private Public Partnership will be considered for implementation of these corridors.

In an indirect jab at the low-cost airlines which are under fire for their contribution to global warming, Mr Yadav said, “Global warming and changing climatic conditions are a world-wide concern today. These energy efficient and environment friendly systems would go a long way in alleviating these concerns.”

Mr Yadav also announced fare-cuts of one rupee per passenger in the second class non-suburban ordinary passenger and non-superfast mail/express trains. In the air-conditioned coaches, fares are to be cut by beween two to six per cent, depending on seasonality.

He said more facilities will be made available nationwide to expand the number of reserved tickets issued every day, such as through more stations, as well as Post Offices, Defence Ministry organizations, the Internet, post offices, petrol pumps and bank ATMs.

Tickets will be issued through kiosks installed alongside bank ATMs and PCs connected to Internet. The Bank will levy a fixed service charge to be paid by the passengers on different type of tickets and also have the discretion to fix transaction charges to help them cover both the initial and recurring cost of installation of ATM structure and electricity and connectivity charges.

The banks will have to pay annual license fee to the Railways for each location, expected to 857 in the initial stage.

To boost the number of unreserved tickets, the 2,200 computerised counters for this purpose will be increased to 8,000 in two years. Another 6,000 automatic ticket vending machines will be installed in major cities and a pilot project launched for issuing tickets through multi-purpose smart cards.

The minister announced better reservation and seating facilities for senior citizens, women above 45 years travelling alone, physically challenged passengers, milk and vegetable vendors and other retail sellers.

More convenient, comfortable and high capacity new design passenger coaches will be manufactured and nationwide train enquiry call centres set up to check training operating times through one common number.

Tourist tickets will be introduced in the hugely popular suburban services of the commercial capital of Mumbai with facility for unlimited travel.

Three hundred more stations are to be developed as modern stations with proper waiting rooms, cybercafés and improved passenger facilities. This year has been declared ‘Cleanliness Year’, with a special campaign to ensure cleanliness in station complexes, passenger trains, railway lines, waiting rooms etc.

At the same time, India’s State Minister of Railways Mr R. Velu announced that 100 Budget Hotels are to be set up through a subsidiary, the Indian Railway Catering & Tourism Corporation (IRCTC) on a public private partnership basis on unused railway land in the vicinity of railway stations.

These hotels are designed to help passengers save costs and time in using city hotels while waiting for a connecting train, as well as tourists visiting different parts of the country.

Mr Velu said the IRCTC will work with private partners to develop, operate and maintain the hotels. Thirty-year licenses will be issued through an open competitive bidding under a transparent, two-packet technical and financial tender system.

Tenders for 20 locations have been finalized and tender of 10 locations have been floated. Construction is expected to take about two years after finalization of contract and signing of agreements, Mr Velu said.

Contending that Indian Railways is “fast emerging as a dynamic and vibrant entity”, Mr Yadav also lauded IR’s “emerging International image”.

He said IR personnel would soon be training their counterparts in Africa, and the Chairman of Railway Board has been elected as first chairman of Asian Railway Association and also the first non-European President of International Railway Union (UIC).

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