Changing tracks: Rlys puts brakes on luxury train route

Written by Surabhi Rastogi | Surabhi | New Delhi, Dec 28 | Updated: Dec 29 2007, 04:27am hrs
The railways have decided to exit the luxury train business, which includes trains such as the Palace on Wheels and the Deccan Odyssey. The trains will now be run independently by the respective state governments, who have to bear all capital costs. This was earlier shouldered by the railway ministry and the state governments on a 50-50 basis.

The railways will, however, continue to get a share in their profits. The haulage charges and the revenue-sharing model are at present being finalised by the railway ministry and the states. Sources also said railways would get full haulage charge for the first few years after which it will take a part of the profits. The revenue-sharing model for the trains is still being worked out. Sources pointed out that there could be some modifications to this plan as state governments are not satisfied with the proposal.

The luxury train business is set to see a huge boost with a number of states planning such services aimed primarily at high-end foreign tourists. A second Palace on Wheels for Rajasthan, one for Punjab and a third for Karnataka are in the pipeline.

However, sources said the low profitability of such trains made the railway ministry take this decision. While the Palace on Wheels has full occupancy, the Deccan Odyssey has only 30%. Palace on Wheels is a long-established brand and Rajasthan is a well-marketed tourist destination which has helped made this train service a success. The same cannot be said for the Deccan Odyssey or the other planned trains, a railway official pointed out.

Another possible reason may be the railway minsitrys decision to run a luxury tourist train of its own. The Indian Railways Catering and Tourism Corporation is planning an all-India luxury tourist train.