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News Entry# 279425
Sep 08 2016 (14:54) Indian Railways' surge pricing: Why strategy for premium trains is myopic and bad move (www.firstpost.com)
IR Affairs
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News Entry# 279425   
  Past Edits
Sep 08 2016 (2:54PM)
Station Tag: Mumbai Central/BCT added by DhnEcr~/591496

Sep 08 2016 (2:54PM)
Train Tag: Sealdah - New Delhi Rajdhani Express/12313 added by DhnEcr~/591496
Posted by: Sanz~ 93 news posts
Sometime in November 2014, I hailed a cab back from the airport to my house. The cab driver, as numerous of them in Mumbai are, was...

7 Posts

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Sep 08 2016 (18:46)
I.R.needrejuvenation~
I.R.needrejuvenation~   1946 blog posts
Re# 1984802-8               Past Edits
People will demand more and more trains with more and more second class coaches which will cause more and more losses to railways. Large number of ac coaches recently augmented in almost all trains shall be begging for passengerss. More and more egg laying hens (AC passengers) shall switch to air and ac buses.
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Sep 08 2016 (20:23)
I.R.needrejuvenation~
I.R.needrejuvenation~   1946 blog posts
Re# 1984802-9              
A few points which comes to mind which appear relevant to the future of IRlys at this juncture are as follows:
(1) It is a simple case - 90-95% bolts of a huge machine (say a loco/ coach or train) are loose (Loss making pax) and IR is trying to maintain/ repair/overcome the problem by over tightening the the 5-10% bolts which are already tight, in fact some of them over tight. Offering “so called heavily subsidized travel (?)” to about 95% of passengers and making up the losses with the remaining few % is not viable.
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Except a few Rajdhanis & Shatabdis plying between premier cities with large fraction of corporate/ business travelers like Mum Raj, AKRaj, etc, many of them shall be having empty seats during the run with this kind of pricing.
(3) This pricing policy if extended to all the trains shall ensure grand success of the new aviation policy which aims to achieve quantum jump in Air traffic in India. It plans to cap fare to Rs. 2500 for upto 1 hr flight and to start operation of flights from about 300 airstrips in medium sized cities which presently are lying almost unused ,by developing them as no frill low cost airports.
(4) Great expansion in the expressways in last 15 years along with huge investment proposed in roads by present Govt. in the years ahead shall offer a great opportunity to the frontline bus operators to introduce state-of-the-art buses (including the ones with toilet facilities) deployed in developed countries. The enhanced comfort and speed can easily capture traffic upto 1000-1200km journey from AC3/AC2/ACC of IRlys. They are likely to be top choices for travel once the first 20-40% of AC3/AC2/ACC of IRlys seats are sold. Once the number of buses increase, the bus operators are smart enough to give irresistable choices to paxs which could save them an hour and a few hundred Rs. by offering to picking/dropping at main road near the residence. This factor could be a game changer for them and a big blow to IR.
(5) Dynamic marketing is not the forte of Indian Railways which saddled with multi level huge organizational structure & susceptibility to political interference. Cumbersome operating practices, the recruitment methodology and profile of employee ensure they are likely to fail in this arena. Private bus/airline operators ensure maximum occupancy with maximum revenue generation by taking decisions at lightening speed. They fill unsold seats and sell tickets at 5 times the normal cost if there is instantaneous demand/ scope and also sell at less than half of the normal fare otherwise but they ensure maximum revenue/occupancy. On the other hand Indian Railways go on operating suvidha/ premium/ special fare train with occupancy as low as 10% or even less, a service neither to self nor to nation!!!!!!
(6) Only factors which had ensure survival of Indian railways are
(6a) inherent extremely low energy required in rail transportation (as compared to road & air)
(6b) inherent huge economies of scale (as compared to road & air)
(6c) inadequate capacity of airports/ roads to take more traffic
(6d) More energy efficient and volume friendly water ways and coastal shipping is in nascent stage in India.
The third factor (c) may not stay long with railways if plans of road and aviation policy being followed by Govt is implemented well. If plan of developing waterways/ coastal shipping and futuristic river interconnection project goes through, even the factors (a) & (b) may not be that friendly with Indian Railways.
(7) The only way to find solution is to attack the root causes of the problems.
(7a) follow law of economics/ costing- fare/tariff should be at-least roughly proportional to costing. Charging same fare per k.m. for tough ghat sections and on flat plains is an economic folly. If Public can pay for inflated distance for the mountaneous Konkan Railway section then why not for rest of India?.
(7b)Subsidies should be reasonably quantified and sharply targeted Limiting the subsidy to non. Ac. classes only makes sense. why a person travelling in ac classes be given subsidy if IRly finances are in bad shape and if other non ac class are travelling are paying full fare. Limiting the quantum of subsidy- 75%-100% subsidy appears to be unreasonable there may be slabs of 20/30/40 %.
(7c) In order to promote faster (semi high speed) trains, IR may operate jan-ac class sleeper with same layout as 2nd class sleeper (72/80 berths per ICF/LHB coach) and costing about 1.5 times of 2nd class sleeper only (no profit no loss) and no concession of any type be given on this class. AC chaircar fares in DD coaches should be lower due to their lower costing.
(7d) To bring down the cost of ac seat and berths, research in Double decker charcar/ sleeper coaches is required so that large number of fully ac Semi High speed trains can be run on IR network after selective upgradation of tracks.
(8e) Premium should be charged only for offering Premium facilities which may be LHB coaches(instead of ICF), Better interiors, Faster Services, other peripheral services like wiFi, pantry/dining car, generator car(better air conditioning). Offering more facility in Mahamana/ Deendayalu (water filter etc) to most subsidized passengers which are not given to much higher paying Suvidha pax is an ecomonic crime. Any thing is not justified in the name of demand, otherwise there is no difference between the touts and Irailways.
(8f) The railway operating practices had been devised several decades (or probably a century ago) when the means of communication, signaling were rudimentary in nature and there was nothing like satellite communication, computer, internet, IT etc. It is necessary to study the whole railway operation with respect to current technology which can provide safer rail travel with much lesser
man-power cost (the Achilles heel of Indian Railways). Harnessing the tremendous technological developments to the hilt- is the most important factor which has potential to do a turn around in railways. The fare which is called subsidized today may not be so subsidized if operations are simplified through use of technology.
(8g) If the decisions are taken on commercial lines, rather than on political and departmental considerations the scene will definitely change. All trains shall have full load, the empty and there shall be a service only where the demand exists. The de-politicisation is the final key to bright future of IRailways.

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Sep 09 2016 (08:34)
Pp   5315 blog posts
Re# 1984802-10               Past Edits
बहुत ही सटीक लेख है.
बड़े शर्म की बात है की रेलवे बोर्ड के एक सदस्य ने इसे दलाली पर अंकुश के कदम के रूप में प्रचारित किया है.
ये रेलवे मिनिस्ट्री के मानसिक दिवालियेपन का परिचायक है.
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Sep 09 2016 (09:46)
Realrider   667 blog posts
Re# 1984802-11              
see TATA in airways and also many other business man are in airways these days. Seems govt doing their bit to PROMOTING.
If you see carefully new trains started by this govt is of more political gains and also more 80% not getting full demand.
Lets Private airlines enjoy. I am happy with private airline growth in india. Now Banglore, Chennai to Delhi we may not see much Raj travelers.
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lets not forget small cities like Gorakhpur also getting connections to delhi. Visathara is starting Indore to delhi in winter. So whole picture of it,

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Sep 09 2016 (13:17)
I.R.needrejuvenation~
I.R.needrejuvenation~   1946 blog posts
Re# 1984802-12              
Monopoly is very bad and highly undesirable in field and in any circumstance. Efficient bus services, low cost airlines both are required (and should be a fundamental right) as an alternative to travelers in our country right from a 10-km short journey to a 3000 km long journey. Sole dependency on railways (on most of the routes) especially of middle and poor classes of our country esp. for long distance travel is the reason why Rlys are in a position to implement any policy on whims and fancy. Justification is a thing can be given for any deed, whether right or wrong.
Inability of IRlys to provide seats/ berths even in ac classes which are profitable to speaks of
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its failure. First earn and then distribute (give subsidy) could be a sustainable policy for IRlys and not just distribute and distribute and then try to earn desperately to makeup for losses (through premium/suvidha etc).
What the nation actually need is the transportation of freight & passenger through out the nation in a way (right mode) which is best for our economy and people. And not by way of "dangal" where bus lobby sabotage introduction of train for their vested interests, airline operators charge unreasonably low/high fares in the name of competition/ market demand and railways provide almost free travel to some and on the other hand charges 4 times the normal fare from others for similar service.
Railway is supposed to be most cost effective, environment friendly, energy efficient and comfortable means of transport especially for medium to long distance freight/passenger traffic and for routes with high traffic density. It must play its designated role, so that the cost of logistics in our nation shall reduce drastically, thereby making our products more competitive in global economy, which in turn will make imports cheaper & boost exports (more profitable, more volume) from our country, by making them more competitive in comparison to that of other countries, which again in turn shall promote our industry, businesses, employment, GDP of our country in a big way.
Currently the logistic cost of our country is much higher (14% of GDP) than that of other countries. Feats accomplished by Singapore/EU-8%, US-9% should be emulated by India). Rlys play major role in a vast country like India, and our nation is heavily losing as IRly has been unable to play its role efficiently which is reflected by very high logistic cost of India in a rather unnoticeable way. It is a case of lost opportunity which is evident in Economic times report that India could save an astronomical amount of Rs. 3.33 lac Crore Rs if the logistics cost is brought down to 9%. Pl see the economics times report in the following link:
click here
Above national saving is possible if the Railways, Roadways, Airways & Water ways are well developed and properly operated to enhance the national interests and not the myriad of vested interests like political (vote bank, elections etc) Organisational/ Departmental, Regional, Personal, lobbies/groups etc.
Two major reasons for the backwardness of Indian Rlys is lack of investment and more importantly embarking upon financially imprudent policies. The first factor has been reasonably being taken care of by our hon. MoR to large extent by drastically increasing the investment in rly infrastructure. But more importantly the second factor (i.e. better management) will decide that this investment will actually lift the fortunes of IRly or sink it down at faster rate. That remains to be seen. We can hope and pray for the best from the core of our heart.

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