Indian Railways urged to lower fares, boost occupancy for better revenue – ET TravelWorld

The Railways should do the groundwork before introducing new trains and consider higher occupancy of berths by lowering the price to achieve maximum utilisation, the Committee on Public Accounts has said in its report presented to the 18th Lok Sabha on March 21. The Committee, in its 139th report presented to the 17th Lok Sabha on April 20 last year, had flagged its concerns on the ‘Loss of revenue due to running of Suvidha Express Trains: South Western Railway’.

The current report pertains to the action taken by the government on the observations and recommendations of the Committee contained in their 139th report and the Committee’s satisfaction on the action taken by the Railway Ministry.

The Committee, in its 139th report, had noted that due to dynamic pricing of fares, Suvidha Express trains suffered revenue losses and underutilisation of seats. It had observed that despite the suggestion of the commercial department, South Western Railway Administration failed to convert Suvidha Express trains to Tatkal special/superfast express to cease the loss of revenue of INR 80.74 crore from 2016 to 2021.

According to the report, the ministry, however, in its action taken note, had stated that the analysis for the period 2016 to 2021 showed that the actual earning was more to the extent of INR 7.9 crore when a comparison was drawn between actual earnings and the earning potential, and this could not be deemed as a loss.

The Committee was dissatisfied with the ministry’s response and said rationalisation of fares, as already suggested by the Commercial Department and recommended by the Committee, would fetch more revenue to the Railways and remain passenger-friendly.

It had also viewed that the Railways should keep in mind that abnormally high fares may act as a deterrent for passengers in choosing railways over air travel and Indian Railways cannot afford to be selective about its customers, and accordingly review the fares to arrive at an appropriate solution.

Besides, the Committee had also noted from audit observation that utilisation of berths in 2A and 3A class was less than 60 per cent during 2016-2021, hence, it was unable to accept the argument forwarded by the ministry that occupancy of trains varies from season to season depending upon factors such as holidays, festivals and the likes particularly when other trains on the same route had an average occupancy of 144 per cent.

The ministry once again acted on the Committee’s suggestions and in its response said a review of occupancy and rationalisation of passenger fare is done regularly based on the occupancy of trains. It also announced certain measures such as discounted schemes, rationalisation of Tatkal quota and fare and conversion into AC chair car with lower fare if AC-3 tier is running underutilised over certain sections.

The ministry further stated that the extant practice is in line with the observations made by the Committee and before the introduction of new trains, the Indian Railways takes into account both the operational feasibility and commercial/traffic justification into account.

The Committee reiterated that there should be regular study of utilisation pattern of the Suvidha trains so that necessary modifications can be done in order to achieve optimum utilisation of berths, the report, presented to the 18th Lok Sabha, said.

It added, ‘The Committee are of the view that keeping in mind that flexi-fare work both ways — hikes and declines, the railways should consider higher occupancy of berths by lowering the price.’

It also suggested a mechanism regarding differential pricing for preferred berths and an AI model for optimisation of seats in order to identify demand patterns and rejig the allocation of seats to increase occupancy.>