The Railways lost out on passengers by implementing the flexi-fare system in all premium trains, the government auditor Comptroller and Auditor General has said. The auditor has, therefore, suggested that the Railway Board should raise fares in all types of trains instead of targeting premium trains alone for dynamic/enhanced pricing.

CAG also called for lowering the share of seats under the dynamic fare system. The other significant recommendation related to levying lower charges on waitlisted passengers.

Thanks to dynamic pricing, some passengers left the Rajdhanis and Shatabdis for mail and express trains on the same routes, while some simply left the trains for flights, CAG said. In a large number of sectors, flying was cheaper than taking trains, it noted.

CAG analysed data on train occupancy and earnings of 142 premier trains — 44 Rajdhani, 46 Shatabdi and 52 Duronto trains — where the flexi-fare scheme was introduced on September 9, 2016. Rajdhanis and Shatabdis are entirely air-conditioned trains, while Durantos have a mix of AC and non-AC coaches.

“Implementing the flexi-fare scheme in Rajdhani, Duronto and Shatabdi trains irrespective of the demand and occupancy resulted in decrease in occupancy in all classes except the sleeper class in Duronto trains. There were instances of minor increases in occupancy in a few premier trains,” CAG has stated.

It should “rationalise the fare structure across all types of trains instead of targeting premier trains, which already have an increased fare structure,” said the CAG, noting that the national transporters’ fare strategy drove out AC passengers, who typically pay high fares.

Earnings or occupancy

While the introduction of the flexi-fare system – dynamic pricing – led to higher earnings, it did not lead to higher occupancy, CAG noted. The government auditor wants the Railways to count “occupancy levels” while defining strategy.

CAG has called for lowering the proportion of seats under the dynamic fare system. “Instead of allotting 90 per cent seats or berths under the flexi-fare scheme and leaving only 10 per cent seats or berths for normal fare, it is recommended that at least 50 per cent seats/berths be allotted for normal fare.” It also called for a route-wise analysis of the flexi-fare system.

CAG also recommended that waitlisted passengers should be charged a lower fare. “While paying a higher air fare, a passenger is assured a confirmed seat, whereas under the flexi-fare scheme, when a passenger books a waitlisted ticket at 40 to 50 per cent higher fare, he is not assured of a confirmed seat.

It is recommended that for the uncertainty a waitlisted passenger undergoes, he should be compensated by way of a lower fare,” it stated.

Though the Railways had introduced enhanced fare in various formats before introducing the flexi-fare scheme, they did not take into consideration the fact that the occupancy in all classes (except sleeper class in Suvidha Trains) where enhanced fare were implemented was very low; with AC 2 and AC 3 in these trains were not finding adequate patronage.

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