Turnaround of Indian Railways: A Tough Road Ahead?
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Case Code: BSTR500 Case Length: 9 Pages Period: 2012-2015 Pub Date: 2016 Teaching Note: Available |
Price: Rs.400 Organization : Indian Railways Industry :Railways Countries : India Themes: Turnaround |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Bibek Debroy Commitee
The Ministry of Railways had set up several committees in the past to help IR overcome its problems. However, IR continued to face several issues. In a bid to modernize the Railways and tackle other problems, on September 22, 2014, the Ministry of Railways formed another committee under the chairmanship of Indian economist, Bibek Debroy (Debroy), to make recommendations for the mobilization of resources for major railway projects and restructure the Ministry of Railways and the Railway Board....
The Turnaround Plan
In December 2015, Prabhu announced a five-year plan model to turn IR around. Under the plan, Prabhu would address key issues plaguing the sector – improving traffic management and upgrading rail roller shops, the quality of railway platforms, cleanliness, and customer satisfaction. To de-congest the network and speed up the trains, IR was planning to spend substantial amounts on doubling of tracks and constructing new lines......
Improvements
Some of the measures taken by IR included enhancing freight capacity through modern rolling stock, launching the railway mobile app for booking tickets, and improving rail coach interiors.....
The Challenge
While Prabhu was making attempts to revive IR, it was reported that for the nine months ended December 2015, the Railways’ revenue growth had decreased to 5.9 percent compared to 11 percent to 13 percent in the fiscal years of 2013 and 2014. The decrease was attributable to lower freight and a drop in freight volumes by 0.9 percent in December. The slowdown in revenue put IR in a tight spot. In addition to this, in December 2015 it was reported that from April-December 2015, freight traffic on IR had increased only by 1 percent to 816.7 million tonnes as compared to April-December 2014......
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