Given that the air-conditioned 3-tier class is the only profitable category for the Indian Railways and the recently launched Humsafar Express — which only has AC 3-tier coaches — has been a successful experiment, the national carrier has decided to add more such coaches in all trains and also launch Humsafar Express on more routes.
“We will be launching more Humsafar Express trains and have more trains with AC tier 3 coaches as this category is profitable for us,” said Mohammed Jamshed, member (traffic), Railway Board. The railways will also be increasing the frequency of the existing Humsafar Express trains.
“The Guwahati-Bengaluru Humsafar Express is running at 70%-plus occupancy and so we plan to make it a daily service,” added Jamshed. The Kamakhya Humsafar Express is a weekly train service between Kamakhya and Bengaluru Cantonment railways stations. These trains have been recently launched by the Indian Railways under its differentiated products offerings such as Tejas and Antyodaya, among others. The Humsafar trains attract surge pricing wherein the prices of the tickets go up as the occupancy level increases.
Watch this also:
In order to add more AC 3-tier coaches in the system, the railways has placed orders for 1,000 new such coaches for the current financial year against the 500 planned earlier.
Earlier, two separate committees headed by DK Mittal and Bibek Debroy had highlighted that AC 3-tier is the only profit-making segment in the much subsidised passenger category.
The railways spends 76 paise per km of passenger travel whereas it realises only 36 paise per km, taking the social obligation cost of the railways to Rs 30,000 crore-plus every year. Given the social obligation cost burden, in addition to high staff cost, the railways reported an operating ratio of 97 for 2016-17, the worst in the last 16 years, compared with its revised target of 94.9. While losses in unreserved ordinary sleeper class are around 80% and that on some of the other categories are as high as 70%, only the AC 3-tier category returns a positive return of 7.5%.
“It is a conscious decision that we have taken. We need to increase our earnings from the passenger segment,” said Jamshed. Owing to the the surge pricing mechanism and introduction of new categories of trains, the carrier for 2016-17 was able to increase its passenger earnings by Rs 1,996 crore over 2015-16. The revised estimates for 2016-17 of `48,000 crore still remained unmet as the railways managed to garner Rs 46,279 crore. For the current financial year, the passenger earning target has been kept at Rs 50,125 crore.
The capital expenditure target of the railways for 2017-18 has been marginally increased to Rs 1.31 lakh crore compared with Rs 1.21 lakh crore in 2016-17, with a gross budgetary support of Rs 55,000 crore.