Financial Daily from THE HINDU group of publications
Monday, Aug 08, 2005
Level playing field for private players Railways likely to withdraw sops to Concor
New Delhi , Aug 7
THE Railway Ministry is planning to withdraw some benefits that it extends to the Container Corporation of India (Concor) in the backdrop of opening up the containerised operations to the private sector.
"Since we have to provide a level playing field to other prospective operators, we have to consider whether the benefits being extended to Concor, that include provision of land for building facilities at very low cost and a 22-per cent discount on freight charges for flat wagons for unlimited number of years, should continue," said a highly placed Railway Ministry official.
RITES, the consulting arm of Railways, which had prepared the first policy draft for the containerised policy, has been asked to rework some of the issues and submit the second draft to the Ministry by mid-August.
The Ministry will then seek inputs from various agencies including Ministry of Commerce, Shipping and other stakeholders.
"We will try to have the final policy in place by September 30," said the official. These issues include the licence fee to be imposed and the extent of investment that players need to put in the Indian Railways' infrastructure.
Moreover, we need to find out the route-specific investments, the official said.
The definition of investments is another issue - whether they should include "those on rail tracks only or investments on inland container depots and rolling stock as well." Railways is also considering the different types of licences that can be issued, apart from route specific licences, and whether there should be an omnibus license permitting operations on all routes. Moreover, RITES has been asked to find out the number of operators each route can take, given the line capacity constraints.
It would be difficult to provide operating licence if more than the adequate number of players are interested.
"We have to opt for a competitive bidding in that case," the official said.
On the status of Japanese funding on the proposed dedicated freight corridor, the official said talks are on with the Japanese Government. "Against the soft loan being extended by Japan, they want contracts of 30-50 per cent value to be pledged for Japanese contractors. We have to find the best possible deal within those parameters," he said.
The Ministry plans to set up a National Advisory Council (NAC) to discuss various issues on the freight corridor. It would include various chambers, customers that account for over Rs 100 crore of earnings of Railways, industry chambers, experts and other stakeholders. Railways discontinued its capital fund in 1997.
New offerings in the pipeline
TO emerge as a customer-friendly organisation and increase its earnings, the Railways plans to introduce a slew of offerings that include e-ticketing, free upgradation of waitlisted passengers to higher classes that have vacancies, open call centres and issue "open tickets."
On the e-ticketing pilot project that was slated for launch in July, the official said, it would happen very soon.
E-ticketing would enable customers to travel with computer print-outs of their tickets, with a photo-identity proof issued by the Government.
To ensure that there is no loss of earnings due to vacancies, the Railways plans a scheme wherein customers can be upgraded to higher layers of travel (if there are vacancies in those) free of cost at the last moment. Broadly, occupancy levels are 47 per cent in AC I, 62 per cent in AC II, 72 per cent in AC III and 112 per cent in the sleeper class.
"These levels vary widely based on different trains and different seasons," said the official.
To have "at least some earnings" from vacant travels, the Railways proposes to upgrade waitlisted passengers to the higher classes (if there are vacancies) through a computerised random selection process undertaken just before the charts are released. Passengers will be informed through SMS/phone calls from the Railways' call centre.
Railways refunds Rs 10 crore per day on an average on account of waitlisted tickets. "This means about Rs 3,560 crore are returned to customers annually. Our aim is to ensure best possible use of these funds," said the official.
"We also plan to let passengers rebook their waitlisted tickets to other trains, dates, classes, destinations. Passengers can rebook their tickets free of cost without having to cancel their tickets," he said. However, implementing these plans would take some time since necessary changes need to be made in the software.
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