The Hindu Business Line : Rlys recovers costs only in AC 3-tier, AC chair car segments

In the passenger travel segment, Indian Railways is able to recover its costs only in air conditioned (AC) 3-tier and AC chair car segment per passenger on an average. In all the other travel segments, it is making losses, according to data provided by the Railways in Parliament.

However, since the Railways has not specified the period for which these figures were computed, it is unclear whether the benefits of higher capacity coaches, longer trains launched in the past few years have been taken into account in the figures.

It is also not clear whether the higher passenger fare on account of ‘Tatkal services’ and super fast charges have been considered while finding out the average fare per passenger.

The Railways gets 38 per cent profit in the AC chair car segment, while in the AC 3-tier segment, it garners 16 per cent profit per passenger on an average.

In AC 2-tier, the Railways just about covers the cost and records one per cent loss on the fares realised against the average cost incurred on a per passenger basis. In the second class (ordinary) segment, Railways registers 47 per cent loss per passenger.

Complex methodology

Indian Railways costing exercise involves complex methodology since the same infrastructure (like tracks, platforms, signalling systems) and personnel are used for providing both freight and passenger services. So for each such ‘common’ cost incurred, the difficult part is computing what part of the cost should be apportioned to freight and what part to passenger services.

Replying to a question by Mr Vallabhbhai Kathiria in Lok Sabha on the average cost of carrying a passenger and the revenue realised, the Union Railway Minister, Mr Lalu Prasad, provided these details. He added that over the years, the Railways has been increasing the number of coaches in well patronised trains in order to carry more passengers.

During 2005-06, 2006-07 and 2007-08 (up to December 2007), the number of additional coaches attached to different trains were 544, 745 and 876 respectively. The incremental volume of traffic per train is aimed at reduction in unit cost that is cost per passenger.

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