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Thursday, February 25, 1999

With Cris, Indian Railways seek to gain the cutting edge 

Shilpa Joglekar  
Cris is all set to revolutionise the railways. Able to track cargo, with the latest information on arrival and departure schedules, it will be the logistics manager for a 62,729-km network, and a rolling stock of 2.72 lakh wagons, servicing almost 7,000 locations, among other things. Cris is the Rs 3,500-crore Computerised Railway Information System.

In June this year, Cris will first be tested on the eastern and northern sectors, before being extended to the rest of the country by the end of the year. An associate body of the Indian Railways, it has taken 10 years to develop and perfect the system. Cris also has a sibling. Fois - an acronym for Freight Operation Information System will give railways' freight clients the latest in cargo tracking and delivery systems. So if ACC wants to divert it's cargo even after it is on its way, there is a good chance they could.Finally, the railways is talking a language that's music to the corporate sector's ears.

It's all a part of a carefully planned strategy. "Theidea is to get into a high growth trajectory," says DP Pandey, executive director, planning. For some years now, freight traffic, the sole earner for the Indian Railways has grown at a four per cent growth rate over the last decade. It's a pattern the railways wants to break. "We are looking more a growth rate of seven per cent," says Pandey.

The strategy is to look at business opportunities not considered earlier, and that includes fast moving consumer goods. For instance, the domestic division of the Container Corporation of India (CONCOR), a newly-created body, have just tied up with Hindustan Lever to transport their products to markets in the north-east. And this is not just restricted to soap and detergents. It's even white goods that the railways is interested in.With this, the railways hopes to kill two birds with one stone. Although the corporates will sign up with CONCOR as the goods will be transported only by container, CONCOR will have to pay the railways a fee for using the trains and tracks.Also higher profits earned by CONCOR means higher earnings for the railways, which owns 54 per cent of the company. And this is high margin traffic for the Indian Railways, which will charge 37 per cent more than for other goods.

The railways plan to start tracking the long haul movement of consumer goods in the country and see if they can consolidate these into railable quantities.

According to a railway source, chasing business in the non-core sector is an acknowledgment that the country's product mix has changed. In the 50's and 60's, the core sector accounted for over 80 per cent of the country's industrial production. Today, consumer goods have eaten into this share in a major way -- and will continue to do so. Also, consumption of consumer goods -- earlier restricted to metro, has now moved into the countryside -- a factor that the railways may not be able to work into its strategy. All it can do is attract long haul traffic, leaving the less than 300 km range transportation to truckers.

Therailways is treating its regular customers much better. Cement, POL and fertiliser companies are being wooed back from truckers with volume and station-to-station discounts. Although the latter suffered a setback when diesel prices were slashed by 10 per cent, volume discounts saved the days for atleast the central and western railway, who, bucking the trend in the rest of the country will actually surpass their targets.

What was particularly encouraging for these railways was the return of the corporate client. Cement majors such as Gujarat Ambuja who have explored all options including sea transport have now made a commitment to transport by rail. With an unspoken commitment from the ministry that freight fares will not be hiked further, even more corporate clients are expected to explore the option, thanks to some aggressive marketing by regional freight managers.Finally, the railways are getting their competitive edge back. As RK Jain, member secretary, perspective planning, Railway Board, say, "thehikes in freight charges were just a budget balancing exercise, with little relation to cost or market changes. This is finally being corrected." While freight is charged 60 paise per kilometre to make up for the 18 paise per kilometer that passengers pay per kilometer, even in a country like China, freight charges are lower than passenger fares (freight is charged 5.8 fen per kilometer to 4.4 fen per passenger kilometer). As a result, China carries four times the amount of rail freight India does Wherever possible the attempt is to sew up the freight market. For instance, the IR is pursuing transportation contracts with power companies for coal. Although negotiations with the first one, Hinduja's power project in Vishakhapatnam took a long time, the process has become smoother. Talks are on with two other coal based plants in MP - Bina and Daewoo. Although late delivery will mean a penalty, a timely delivery will earn them a premium. The railways could well earn themselves some extra pocket money, if theyran a little bit faster.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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