Tejas Express: Indian Railways` Leap toward Privatization? |
|
|
|
|
| <<Previous Page |
EXCERPTS |
|
| |
IR was required to operate several unprofitable routes to remote parts of India, just to ensure that these areas were connected to the rest of the country. By operating those routes at less than optimum capacity, IR incurred high operating costs. As a government department, IR had to fulfil certain social commitments because of which it had to provide subsidized fares to passengers to make rail travel affordable to all classes of passengers. The subsidies and concessions only added to its financial burden. IR also was also obliged to carry certain core products or essential goods at a subsidized rate in its freight operations, because of the social or economic significance of these goods. ... |
| |
 |
| or |
 |
| or |
PayPal (11 USD)
|
|
|
| |
|
Privatization of public services like railways was not a new phenomenon. Japanese National Railways (JNR) accounted for half of the nation’s passenger and freight transportation in the 1950s. However, from the 1970s, JNR started to incur heavy losses with the increasing use of automobiles and air travel. JNR continued to struggle under financial difficulties through the 1980s and was teetering on the edge of bankruptcy...
|
| |
|
In the mid-2010s, IR took steps to cut the travel time between major cities of India by introducing fast trains. Consequently, it introduced a new premier class train called TE which had the ability to travel at speeds up to 130 km/hour and offered a range of facilities. The prices in the TE trains were 20-30% higher than that of the premium Shatabdi Express trains, but significantly lower than air fares. A dynamic pricing model with ticket prices differing according to season and traffic was followed for the TE. Provision was made to give discounts during the off-season, and fares were automatically adjusted through artificial intelligence, algorithms, or technology...
|
| |
|
In July 2019, the Union Ministries, under the direction of Indian Prime Minister Narendra Modi (Modi) formulated the 100-day plan with 11 proposals. Two of the big-ticket proposals were – privatization of passenger service trains and corporatization of train production units. The privatization of some railway services was considered as a solution to attract much needed investments without going for the disinvestment route. ..
|
| |
|
However, the move toward privatization by entrusting the operations of the New Delhi-Lucknow TE to IRCTC did not go down well with IR employees. On the day the New Delhi-Lucknow TE was inaugurated, representatives from various Railway unions assembled in front of the Divisional Railway Manager’s office of Lucknow, displayed banners, and shouted slogans calling the day of the launch a ‘black day’...
|
| |
|
The hype generated by the success of the New Delhi – Lucknow TE attracted the interest of several entities regarding the privatization initiatives of IR. IR was already in the process of privatizing two railway stations, namely, Gandhinagar in Gujarat and Habibganj in Bhopal, both under the Northern Railway . While IR was in charge of the issue of railway tickets and conduct of operations, the management of the facilities at the railway stations such as the issue of platform tickets, the running of food courts, handling of parking areas, and distribution of advertising rights was given to private companies..
|
| |
|
Exhibit I: Indian Railways Timeline
Exhibit II: About IRCTC
Exhibit III: Indian Railway Zones, as of 2019
Exhibit IV: Consolidated Profit and Loss Account of Indian Railways
Exhibit V: Amenities Provided in Tejas Express
|
| |
|
