No relief for train passengers! Indian Railways rules out rollback of flexi fare scheme

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New Delhi | Updated: August 22, 2018 12:32:29 PM

Indian Railways flexi fare scheme: While a complete roll-back of the flexi-fare system is unlikely, corrective measures may be taken on routes which have seen a fall in occupancy after implementation of the plan.

railway, railway sector, railway industryThe flexi-fare scheme was introduced on premium trains such as the Rajdhani, Duronto and Shatabdi —168 in total —in September 2016, wherein the base fare goes up as seats get booked.

The Indian Railways is unlikely to roll back its flexi-fare system currently applicable on select premium trains and will soon re-float the global tender to procure long rails, official sources said on Tuesday. The Railway Board has already submitted a revised report on the flexi-fare system to railway minister Piyush Goyal who is likely to take a view on it shortly. According to sources, while a complete roll-back of the flexi-fare system is unlikely, corrective measures may be taken on routes which have seen a fall in occupancy after implementation of the plan.

The flexi-fare scheme was introduced on premium trains such as the Rajdhani, Duronto and Shatabdi —168 in total —in September 2016, wherein the base fare goes up as seats get booked. The Comptroller and Auditor General of India (CAG), however, in a report tabled in Parliament earlier this year, had said that the scheme has resulted in a decrease in occupancy in all classes except the sleeper class in Duronto trains.

Even in the AC-3 class, which is the only profitable class for the transporter, the occupancy dropped significantly since the scheme’s introduction. “Vacant berths increased from 0.66% in pre-flexi period to 4.46% in post-flexi period,” the CAG had said. “In terms of absolute numbers, the Premier trains carried 2,40,79,899 passengers during post-flexi period as compared to 2,47,36,469 passengers during pre-flexi period. There was de-growth of 2.65% despite the availability of higher number of births/seats, which resulted in sub-optimal utilisation of national assets,” said the report. It had added that “there is a need for review and fine-tuning in the scope of the scheme so that not only more revenue is earned but number of passengers also increase”.

The sources added the transporter is also likely to re-float the global tender for the remaining 3.8 lakh tonne of rails that could not be procured under the last tender.

The railways, for the first time, floated a global tender for 4.8 lakh tonne of rails as it was estimated that Steel Authority of India (SAIL), with which the transporter has a memorandum of understanding for exclusive supply of rails, would not be able to fulfill the requirement. For 2017-18, SAIL had committed to supply 11.45 lakh tonne of rails but fell short by 3.14 lakh tonne. While there were seven foreign bidders that participated in the tender process, none qualified on technical parameters. Only Jindal Steel and Power was awarded orders of 1 lakh tonne of rail under the tender’s ‘Make in India’ clause last month.

Sources, however, added that the quantity of rail to be procured under the revised global tender is still to be decided, as SAIL has ramped up its production capacity and the railways wants minimal or no import of rail.

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