Description
Indian Railways Commercialisation
Introduction to IR
Indian Railways
? The world’s second largest railway, carries 18 million passengers each
day and it has
PASSENGER TRAINS 7,566 TOTAL TRACK (Km) 1,08,706
FREIGHT WAGONS 2,22,147
WORKFORCE 1.6 Million
SOURCES OF REVENUE
OTHERS 10%
PASSENGER 28% FREIGHT (GOODS) 62%
Operating Ratio
98.3
100 90 80 70 60 50 40 30 20 10 0
2002
96
92.3
92.1
91 83.2 78.7 75.9
2003
2004
2005
2006
2007
2008
2009
back
Commercialization of Indian Railways
?Commercialization is important aspect of Indian
railways.
?Aims at providing not only service but also to
generate revenue.
Why Commercialization???
Near to bankruptcy by 2015
LEAD TO TURNAROUND
Low-cost airlines & roadways have shaken the rail system.
How it revolved?
Capacity Utilization
Capacity Enhancement
Revenue Enhancement
Conceptual Framework
Repositioning Retrenchment Re – organization
ORGANISATIONAL TURNAROUND
Retrenchment
Strategy
1 ) Reviewing value adding business (Catering, parcel service )
Effect
Cost saving > Rs 1,000 crores /annum
2) Reduction of wagon turnaround time
14 % time saved
3) Outsourcing
Improved efficiency
Repositioning
Strategy
1 ) Developing new products (Double stack containers)
Effect
Saving: 7% on capital cost , 25% operational expenses
2) Product differentiation
E-ticketing, new passenger coaches
3) Focus on revenue growth(like Freight revenue jumped from 233 enhancement in loading capacity, cash m(2001) to 417 m(2007). incentive to free up wagons)
Re- Organization
Strategy
1) Changes in planning system
Effect
Improved efficiency
2) Extent of decentralization ( like Zones raised from (2003) to 16 (2005))
Improved vendor satisfaction
Areas of Commercialization
?Transportation. ?Introduction of I.T. ?Outsourcing.
Transportation
? Daily expenditure is about Rs 100 cr (42% staff, 18%
fuels). ? Daily earnings Rs120 cr . ? Daily loss on uneconomic branch line Rs 8 cr. ? Greater competition from Roadways, with major investments in Highway network upgradation. ? Upgradation of the Railway Production units for improved efficiency and productivity.
Transportation
? Goods Trains
? Railway earns mainly from goods traffic. ? More than a million ton of goods transported daily. ? Carries 16 lakh tonnes of goods every day. ? Railways has 7500 engines,38000 coaches & about 2.5
lakh of wagons. ? Goods train maxm. 100 kmph.
Transportation
?Passenger Trains
? Carries 1.4 crore passengers daily.
? Greater attention to passenger services and safety. ? Heavily subsidised passenger fares, distorted passenger
pricing. ? Indian railways have a share of nearly 22% in the passenger transport market.
Transportation
? VARIETY OF SERVICES
? AC FIRST CLASS. ? AC SLEEPER. ? FIRST CLASS. ? AC 3 TIER. ? AC CHAIR CAR. ? SLEEPER CLASS.
? ORDINARY CHAIR CAR.
Usage of IT in Railways
?A large complex Infrastructure System with Large
Geographical Dispersion such as the Indian Railways can benefit greatly from the intelligent use of IT
?E-GOVERNANCE OBJECTIVE • Freight revenue enhancement • Passenger revenue enhancement • Improvements in Customer and public service • Investment optimization
Usage of IT in Railways
?Transforming Transport through Technology. ?Jewels in the Crown.
•
•
•
• •
•
Freight Operations Information system ( FOIS). Passenger Reservations System (PRS). Unreserved Ticketing System (UTS). Instant voice response system (IVRS). Rail Net. E- Ticketing.
OUTSORCING
? IT giants like TCS and WIPRO eyeing Railways'
?
?
? ?
outsourcing deal. L&T Infotech wins system integration projects from Indian Railways. Indian Railways formed a PPP cell at the Board level to guide in the initiatives of Indian Railways . Organisations like RITES, RVNL, CONCOR, IRCTC, etc. have been formed as an FBO. Parcel Service, Catering,Vinyl Wrapping of trains,Palace on Wheels are part of outsourcing of IR.
Parcel Management System
?Following Functions are covered
• • • • •
Parcel Booking, Cancellation and Loading Monitoring and tracking of Parcels Printing of Parcel labels Networking of all parcel offices RFID tags for tracing parcels
Vinyl wrapped train by Airtel
80 crores contract with airtel and kurkure for ad
Catering
PALACE ON WHEELS
WHEELS OF CHANGES
? MoU with CHINESE counterpart
? Rail fleet with eco-friendly technology ? Train traffic control will be computerised soon ? WI-FI will be introduced soon in business class
? Railway will utilize solar energy
What`s next now???
Massive Railway expansion program. Refurnishing of trains and stations Introduction of anti-collision and GPS Selling of Railway tickets on Petrol pumps.
References
? ? ? ? ? ? ? ? ?
www.indianraiways.gov.in www.indianrail.gov.in [email protected] www.rbi.org.in www.reservebank.com www.irfca.org en.wikipedia.org Rakesh Mohan Committee. 2001. Highlights of the Executive Summary Raghuram, G. 2007. ‘Turnaround’ of Indian Railways: A critical appraisal of strategies and processes’, Indian Institute of Management Working Paper no. 2007– 02–03, Indian Institute of Management, Ahmedabad. ? A Case Study Desh Gupta and Milind Sathye* Faculty of Business & Government University of Canberra, Canberra, Australia.
References
? ? ? ? ? ? ? ? ?
www.indianraiways.gov.in www.indianrail.gov.in [email protected] www.rbi.org.in www.reservebank.com www.irfca.org en.wikipedia.org Rakesh Mohan Committee. 2001. Highlights of the Executive Summary Raghuram, G. 2007. ‘Turnaround’ of Indian Railways: A critical appraisal of strategies and processes’, Indian Institute of Management Working Paper no. 2007– 02–03, Indian Institute of Management, Ahmedabad. ? A Case Study Desh Gupta and Milind Sathye* Faculty of Business & Government University of Canberra, Canberra, Australia.
doc_284468887.pptx
Indian Railways Commercialisation
Introduction to IR
Indian Railways
? The world’s second largest railway, carries 18 million passengers each
day and it has
PASSENGER TRAINS 7,566 TOTAL TRACK (Km) 1,08,706
FREIGHT WAGONS 2,22,147
WORKFORCE 1.6 Million
SOURCES OF REVENUE
OTHERS 10%
PASSENGER 28% FREIGHT (GOODS) 62%
Operating Ratio
98.3
100 90 80 70 60 50 40 30 20 10 0
2002
96
92.3
92.1
91 83.2 78.7 75.9
2003
2004
2005
2006
2007
2008
2009
back
Commercialization of Indian Railways
?Commercialization is important aspect of Indian
railways.
?Aims at providing not only service but also to
generate revenue.
Why Commercialization???
Near to bankruptcy by 2015
LEAD TO TURNAROUND
Low-cost airlines & roadways have shaken the rail system.
How it revolved?
Capacity Utilization
Capacity Enhancement
Revenue Enhancement
Conceptual Framework
Repositioning Retrenchment Re – organization
ORGANISATIONAL TURNAROUND
Retrenchment
Strategy
1 ) Reviewing value adding business (Catering, parcel service )
Effect
Cost saving > Rs 1,000 crores /annum
2) Reduction of wagon turnaround time
14 % time saved
3) Outsourcing
Improved efficiency
Repositioning
Strategy
1 ) Developing new products (Double stack containers)
Effect
Saving: 7% on capital cost , 25% operational expenses
2) Product differentiation
E-ticketing, new passenger coaches
3) Focus on revenue growth(like Freight revenue jumped from 233 enhancement in loading capacity, cash m(2001) to 417 m(2007). incentive to free up wagons)
Re- Organization
Strategy
1) Changes in planning system
Effect
Improved efficiency
2) Extent of decentralization ( like Zones raised from (2003) to 16 (2005))
Improved vendor satisfaction
Areas of Commercialization
?Transportation. ?Introduction of I.T. ?Outsourcing.
Transportation
? Daily expenditure is about Rs 100 cr (42% staff, 18%
fuels). ? Daily earnings Rs120 cr . ? Daily loss on uneconomic branch line Rs 8 cr. ? Greater competition from Roadways, with major investments in Highway network upgradation. ? Upgradation of the Railway Production units for improved efficiency and productivity.
Transportation
? Goods Trains
? Railway earns mainly from goods traffic. ? More than a million ton of goods transported daily. ? Carries 16 lakh tonnes of goods every day. ? Railways has 7500 engines,38000 coaches & about 2.5
lakh of wagons. ? Goods train maxm. 100 kmph.
Transportation
?Passenger Trains
? Carries 1.4 crore passengers daily.
? Greater attention to passenger services and safety. ? Heavily subsidised passenger fares, distorted passenger
pricing. ? Indian railways have a share of nearly 22% in the passenger transport market.
Transportation
? VARIETY OF SERVICES
? AC FIRST CLASS. ? AC SLEEPER. ? FIRST CLASS. ? AC 3 TIER. ? AC CHAIR CAR. ? SLEEPER CLASS.
? ORDINARY CHAIR CAR.
Usage of IT in Railways
?A large complex Infrastructure System with Large
Geographical Dispersion such as the Indian Railways can benefit greatly from the intelligent use of IT
?E-GOVERNANCE OBJECTIVE • Freight revenue enhancement • Passenger revenue enhancement • Improvements in Customer and public service • Investment optimization
Usage of IT in Railways
?Transforming Transport through Technology. ?Jewels in the Crown.
•
•
•
• •
•
Freight Operations Information system ( FOIS). Passenger Reservations System (PRS). Unreserved Ticketing System (UTS). Instant voice response system (IVRS). Rail Net. E- Ticketing.
OUTSORCING
? IT giants like TCS and WIPRO eyeing Railways'
?
?
? ?
outsourcing deal. L&T Infotech wins system integration projects from Indian Railways. Indian Railways formed a PPP cell at the Board level to guide in the initiatives of Indian Railways . Organisations like RITES, RVNL, CONCOR, IRCTC, etc. have been formed as an FBO. Parcel Service, Catering,Vinyl Wrapping of trains,Palace on Wheels are part of outsourcing of IR.
Parcel Management System
?Following Functions are covered
• • • • •
Parcel Booking, Cancellation and Loading Monitoring and tracking of Parcels Printing of Parcel labels Networking of all parcel offices RFID tags for tracing parcels
Vinyl wrapped train by Airtel
80 crores contract with airtel and kurkure for ad
Catering
PALACE ON WHEELS
WHEELS OF CHANGES
? MoU with CHINESE counterpart
? Rail fleet with eco-friendly technology ? Train traffic control will be computerised soon ? WI-FI will be introduced soon in business class
? Railway will utilize solar energy
What`s next now???
Massive Railway expansion program. Refurnishing of trains and stations Introduction of anti-collision and GPS Selling of Railway tickets on Petrol pumps.
References
? ? ? ? ? ? ? ? ?
www.indianraiways.gov.in www.indianrail.gov.in [email protected] www.rbi.org.in www.reservebank.com www.irfca.org en.wikipedia.org Rakesh Mohan Committee. 2001. Highlights of the Executive Summary Raghuram, G. 2007. ‘Turnaround’ of Indian Railways: A critical appraisal of strategies and processes’, Indian Institute of Management Working Paper no. 2007– 02–03, Indian Institute of Management, Ahmedabad. ? A Case Study Desh Gupta and Milind Sathye* Faculty of Business & Government University of Canberra, Canberra, Australia.
References
? ? ? ? ? ? ? ? ?
www.indianraiways.gov.in www.indianrail.gov.in [email protected] www.rbi.org.in www.reservebank.com www.irfca.org en.wikipedia.org Rakesh Mohan Committee. 2001. Highlights of the Executive Summary Raghuram, G. 2007. ‘Turnaround’ of Indian Railways: A critical appraisal of strategies and processes’, Indian Institute of Management Working Paper no. 2007– 02–03, Indian Institute of Management, Ahmedabad. ? A Case Study Desh Gupta and Milind Sathye* Faculty of Business & Government University of Canberra, Canberra, Australia.
doc_284468887.pptx