Once face of railway catering, IRCTC struggles to find its feet outside

Written by Avishek Dastidar | New Delhi | Updated: Aug 6 2014, 15:11pm hrs
Kolkata RajdhaniLast month, Railways slapped it with a fine of Rs 1 lakh after finding a cockroach in the food it was serving on the Kolkata Rajdhani.
From being the face of food and hospitality for Railways until a few years ago, the Indian Railway Catering and Tourism Corporation (IRCTC) has today been reduced to the fringes, an entity struggling for an identity and an image although it has begun to recover financially.

Last month, Railways slapped it with a fine of Rs 1 lakh after finding a cockroach in the food it was serving on the Kolkata Rajdhani. IRCTC had fared no better than private vendors which, too, had been fined for poor food found during a surprise check.

In 2010, following sustained complaints from the travelling public, railway minister Mamata Banerjee stripped IRCTC of its monopoly of managing food on trains. The Railways subsidiary, a mini ratna public sector undertaking, had been created as it was felt that catering and tourism, being non-core activities for a transport organisation, should best be left to a dedicated entity. When it lost its monopoly, IRCTC was catering to 19 Rajdhanis, 13 Shatabdis, 16 Jan Shatabdis, six Durontos, nine Garib Raths and 205 mail/express trains, besides running 118 train-side vending facilities. Today, it caters to only 35 trains.

It has been seeking to stay afloat by spreading across newer areas, mostly outside the Railways system, with a business model involving a combination of its staff and outsourced contractors. It won the rights to serve at a CWG venue in Delhi. It has contracts to run canteens in the ministries of defence and external affairs, and at Shastri Bhawan. Apart from 160 food plazas it still serves, it alsohas canteens at some private facilities and state government premises.

Among the state government premises was New Maharashtra Sadan, where the quality of its food came at the centre of a controversy. With Shiv Sena MPs going on the rampage, IRCTC pulled out of the contract.

The company may bear the railway tag but its connection with Railways is not as intrinsic as it was. The member (traffic), Railway Board, is its chairman while the executive directors for tourism & catering, and passenger marketing, from Rail Bhawan are members of the IRCTC board. Railway officers are mostly posted there on deputation, and it has non-railway officers as well. IRCTCs only remaining major connect with day-to-day rail operations is in e-ticketing, which it runs as a monopoly. But it is also the source of a constant headache for Railways, which get frequent complaints about the e-ticketing website.


From Rs 721.97 crore in 2009-10, IRCTCs total income slacked to Rs 719.69 crore in 2012-13, its capital-to-employed ratio declining from 62 per cent to 43 per cent during the period. In between, its income fell by a sharp Rs 220 crore in 2011-12.

Over the past two years, it has started dealing in flight tickets, hotel bookings, and of late, online retail, besides successfully running tourist-special trains with holiday packages. During the polls, it served 10 lakh meals to security personnel on 250 election specials.

Sources claim IRCTCs income for 2013-14, which is yet to be audited, has recovered to close to Rs 940 crore, with the food business having fetched Rs 306 crore and tourism Rs 324 crore. Officials point out, however, that bad press over food on trains erodes the IRCTC brand, though it is no longer about just railway food.

This is why IRCTC has been asking Railways to free it from on-board catering since 2010. The Railway Board had indicated that the catering job on the few remaining Rajdhanis, Durontos and Shatabdis along with the mail/express trains would be taken over. But there was no clear move to that end, said a senior official.