IRCTC to flag off India’s first non-Indian Railways train

Indian Railway Catering and Tourism Corporation (IRCTC) will flag-off the country’s first non-Indian Railways run passenger train between Lucknow and Delhi on October 4, offering passengers, better amenities and a refund of ₹100 if the train is late by an hour.

IRCTC, the on-line ticketing, catering and tourism unit of the Indian Railways, has been given the mandate to run two passenger train services, six days a week, between Lucknow and Delhi and between Mumbai and Ahmedabad on nomination basis (without a tender) as part of a plan by the Ministry of Railways to privatise passenger train operations.

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“All the service levels will be upgraded including food on these trains. We are offering a special scheme whereby if the train is late by one hour, we will pay back ₹100 to each passenger,” MP Mall, chairman and managing director, IRCTC told BusinessLine on Wednesday. IRCTC will also provide free insurance cover of ₹25 lakhs, the baggage will also be insured and an insurance cover of ₹1 lakh will provided against theft and robbery, at the passenger’s residence.

“Ticketing will be done by us and we will retain the revenue. If there is no occupancy, we will lose money; at the same time, we have been given the freedom to set tariffs and decide on service levels, we can add more facilities. In return, we will pay haulage charges to Indian Railways,” Mall said. These trains, according to Mall, are “a superior version of Shatabdi trains and hence the base fare has been set at 10-15 per cent higher than the Shatabdi trains. Beyond that, it will follow the dynamic fare pricing of Indian Railways; there, it is 40 per cent of dynamic fare but we will take up to 50 per cent of dynamic fare”.

Further, IRCTC “will link it to the airfare, normally we try to keep it at 50 per cent of economy class for AC chair car. So, 50 per cent of air fare or dynamic fare upgraded up to 50 per cent, whichever is higher, will be tried on these trains”.

Freedom to change

IRCTC also has the freedom to change the fares anytime, he said. As part of the 10-year deal, IRCTC has to own the rakes to run the services. “But, just to minimise our exposure, instead of owning it right now, we have taken the rake on lease from Indian Railways which is working out almost to ₹2.25 lakhs per day. Going forward, we will buy and own the rakes once we reach a reasonably good level of occupancy,” Mall stated. Mall said IRCTC was given the freedom to decide the routes to ply the trains and picked the two routes after undertaking a demand survey and scrutinising the passenger profile management data that offered details of trains with highest waiting list throughout the year. “We had the constraint that the two trains given to us where AC chair car trains, so it was inter-city movement with only 5-7 hours travel time. Keeping that in mind, we did the survey and found these two routes to be attractive enough,” he said.

IRCTC is expected to earn at least ₹50 crore a year from the two trains mainly through fares and catering. “Out of that, we have to pay haulage and lease charges to Railways. We will get around 10-15 per cent or about ₹4-5 crores assuming an occupancy level of 70-80 per cent”, an IRCTC official explained.

Its margin will depend on the cost of buying catering stuff, which is under finalisation, he added.