Fares of loss making classes must be increased and gradually brought to a "reasonable level in steps.
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But increasing fares is not the number one solution to tide over the pax business losses being incurred by IR. The need of the hour is to critically analyze the whole gambit of IR operation, management from all possible angles like financial, technical, commercial, personnel etc. There may be many outcomes of such an analysis relating to:
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(1) Reduction in costing per seat of various classes by:
----A--increasing the number of coaches per train through track/station improvement, developing higher HP locos, more electrification etc,
----B--increasing in number of berths/seats per coach through development of new coach design
----C--reduction in the procurement cost of electricity & diesel
----D--reduction in number of personnels required by employing latest technology like End-of-train telemetry(Guardless train), Driverless train(futuristic view presently), Promoting Online ticketing
----E--increasing the non fare revenue through extensive monetisation of IR land holding near rly station areas, advertisement of spaces in Rly stns, trains-exterior as well as interior.
----F--reduction in procurement costs through online bidding and on line contracts in a transparent manner so that cost is minimised and genuine bidders/ suppliers are not mired in the bureaucratic hurdles and directly deal with IR.
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(2) Reduction in subsidies/losses through critical review and corrective steps to
----A-- stop free travel
----B-- minimise subsidy by reducing the quantum to a reasonable level say 40% of basic fare
----C-- targeting the subsidy to needy persons only
----D-- stopping passes like IZZAT passes which give almost free travel to the paxs.
----E-- Curbing ticket less travel by using all means like better technology, intense checking etc. ----F-- Suburban trains are a big loss inflicter on IR. Practically Kolkata & Mumbai Local trains, both run over packed to capacity, but loss per pax in Kolkata is many times higher than the loss per pax in Mumbai Local. Ticketless travel seems to be the most probable reason. More over comfortable ac coaches at reasonable (at no profit no loss) must be introduced in local trains as per traffic demand so as motivate subsidised non ac travellers to go in non subsidised ac coaches. Many car and bus pax shall also prefer comfortable suburban train travel with reduction in road jamming and better environment in cities.
----G--Passenger trains are also a big source of losses. To reduce the loss they must be converted to quicker MEMU/DEMU train with more number of coaches and introduction of AC services at no profit no loss fares as per demand, so as motivate subsidised non ac travellers to go in non subsidised ac coaches in these trains.
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(3) Increasing operational efficiency and save money by:
----A-- rationalisation of trains running with less number of coaches through merger of trains so that the same number of berths/seats on such routes could be offered with lesser number of trains. The new slots created may be used to run profitable express & freight trains
----B-- providing value added services at additional costs with better margins. Value addition may be faster transit, safety features, comfortable seats/berths, additional gadgets like water filters, wifi, better food, better punctuality, timetable freight services etc. Humsafar, Tejas, Antyoday, Mahamana etc are efforts in this direction
----C-- Critical review of projects-Selective and quick implementation of profitable projects. Modification of loss making projects to make them more lucrative through involvement of state govts and other organisations which are going to be benefited out of such projects.
---D-- Accounting reforms with extensive use of IT based Management Information System & ERP are required to keep the IR management well informed about the actual groung reality of IR with respect to Finance, Operation ,Maintenance, Commercial etc aspects.
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If above steps 1-3 are taken, the costing shall reduce substantially and the losses due to pax business shall come down drastically. Atleast all the upper classes including ACI, ACII, ACC which are currently giving losses shall be giving profits to IR.