BL Interview. Railways bets on coal, iron ore, steel traffic & AC-3-tier passenger segment to boost revenue

An improvement in coal, iron ore, food rain and steel traffic in the freight segment and the rise in demand and revenues from AC three-tier in the passenger segment, are expected to spruce up the the Railways’ revenue in the current fiscal year, according to Railway Board’s Member-Traffic Mohd Jamshed. Speaking to BusinessLine , just days before the Union Budget, which will subsume the Railway Budget, Jamshed refrained from responding to questions on the proposed safety surcharge fund, which could mean an increase in tariffs. While elaborating on the steps taken to promote cashless payment, Jamshed said the Railways has asked the Finance Ministry to make good the loss for waiving service charges on online ticket bookings. Excerpts:

On how the year will close in financial terms

Despite shortfall in coal and cement demands, the Railways expects to earn about ₹1.7 lakh crore revenue for 2016-17. The drop in projected revenue for the eight-month period of April-November is primarily attributed to the fall in coal production hitting the Railway revenues hard. On account of over-capacities in the power sector, heavy pithead and power plant stocks, the demand for coal and the leads thereof have been below the projections given by these sectors at the beginning of the year.

On the strategies planned for reversing earnings in freight and passenger segment

The coal demand is picking up. In January, the Railways saw loading of 240 rakes per day from Coal India against an average of 210 a month for the period till November. For January-March, we expect iron ore exports, raw material to steel plants and finished steel products to pick up. We are also witnessing pick-up in foodgrains and export-import loading, while petroleum products are at the same level as last year.

In the passenger segment, we are witnessing about a four per cent increase in revenue, mainly by running special trains —27,000 trains, against 23,000 trains last year. We have also taken several measures like increasing the share of reservation against cancellation of berths and providing a 10 per cent discount after chart preparation to attract more passengers.

We also have sharply dropped fares in last-stage segments of trains that connected longer points, on a pilot basis — Jaipur-Ajmer and Bengaluru-Mysore — to bring them lower than that for the Volvo buses, to make rail travel competitive.

By analysing the reservation and wait-list data, we realised people preferred road for shorter distances and decided to reduce the fares. Flexi and other innovative rationalisation in this segment enhanced revenues further.

We are introducing Humsafar trains, train comprising AC three-tier design, which is a popular class of journey having 85-110 per cent occupancy. We have introduced three Humsafar trains — between Ananda Vihar-Gorakhpur, Kamkhya-Bengaluru and Howrah to Yashwantpur recently — and plan to introduce the fourth one soon. These have been introduced on routes that observed overflowing waiting lists.

We also plan to launch Tejas train soon. The AC three-tier, we realise, is the most popular category — and so we intend to increase the share of this segment the maximum.

For the unreserved category, we have 130 Deendayalu coaches in service, and also plan to run Antodya trains — with only general class sitting arrangement over long distances.

On the status of cashless transactions in passenger services

On January 25, we saw 66 per cent of the reserved category revenue coming through cashless mode, against 58 per cent before de-monetisation. So, on January 25, ₹80 crore was collected through cashless mode and ₹41 crore through cash. In the unreserved category, 8.6 per cent of revenue came through cashless mode, with the remaining came through cash. The numbers are continuously increasing due to various steps taken.

We have now installed more than 1,300 point of sales (POS) machines at around 800 reservation centres and more than 1100 POS machines at around 400 suburban stations to encourage use of debit or credit cards to make payments. On the freight side, on January 25, we have attained about 99.74 per cent or ₹326 crore through cashless mode, while only ₹8 lakh through cash.

To encourage people to move to the cashless mode, the Railways is providing 0.5 per cent discount to season ticket holders in suburban segment, free insurance of ₹10 lakh for e-tickets, five per cent discount for availing services such as e-catering and online booking of retiring rooms, if payment is made through cashless means. The Railways has also waived off the service charge of IRCTC on cashless bookings till March 2017, for which it is taking a hit of ₹40-50 crore a month. We have requested the Finance Ministry to compensate for this loss.

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