turnaround of railway business strategy 1232686454800627 2

7/31/2019 Turnaround of Railway Business Strategy 1232686454800627 2

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Worlds third largest railway network Prime movers to the nation.

Approximately 65,000 km of rail tracks and over 7,151railway stations.

IR owns a fleet of 2,22,379 wagons, 42,441 coaches and

7,910 locomotives. It runs 16,0251 trains, including 9,550 passenger trains,

carrying about 1.6 million tonnes of freight and about 15million passengers daily.

Prime infrastructural sector.

Perform the dual role

1. Commercial Organization

2. Vehicle for fulfillment of social obligations

Part and parcel of the total receipts and expenditure of

the Government of India.


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The site which serves online ticketing for IndianRailways is the largest e-commerce

website(www.irctc.com)


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Member

Staff

Members

CivilEngineering

Member

Signaling& Telecom

Railway Board

Financial

Commissioner

Member

Traffic

Ministry of Railways

Research,Design,

and Stds. Org.

Production

Units

General

Manager

Member

Stores

Minister of Railways

The Govt. of India


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Strengths the Biggest Company in the

world in terms of employeestrength.

Palace on Wheels is a majorpart of income.

connects different cities andcountries.

luxurious and affordable tocommon man.

Technological advancement


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Weaknesses

Corruption within the department.

Lack of accident proof magnetic wheels in all trains.

Lack of safety

Poor infrastructure

Delayed trains

Non pro-active employees


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Opportunities METRO in a commercial city like Mumbai

Development in small cities

Profit through privatization


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Threats Low cost airlines

Improvement of other infrastructure like roadways

Could be taken over by airlines


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The Indian Railways is hurtling towards financial andorganizational bankruptcy.

-Rakesh Mohan Committee.

Sectors due to which Railways incurred LossesPassenger Business.

Reduction in the share of Transport Market.

Freight Segment.

Scrap Disposal.

Unremunerative Projects.Increase in wages and salaries.

Social Service Obligations.


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INDIAN RAILWAYS

MARCHING TOWARDS

HUGE PROFIT


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Railways reap the benefits of volume growth andbetter management


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play on volumes

reduce the unit cost

pass on the benefits to the consumer.

improvisation or reinventing instead of restructuring


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FREIGHT SECTOR

Indian Railway carries a huge variety of goods ranging

from mineral ores, agricultural produce, petroleum, milkand vehicles.

Indian Railways makes 70%of its profits from the freightsector


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DECISION MADE IN BUDGET

No change in rates

Enhancing the quality of freight trains

Double stack container freight trains

Increase in wagon production & locomotive production Meeting global demand


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SCHEMES INTRODUCED

Engine-on-Load

Terminal Incentive Scheme

Electronic Payment Gateway

Wagon Investment Scheme

Non-peak season incremental freight discount scheme Loyalty Discount Scheme


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Commodities have been moved to higher brackets

iron ore, fertilisers and petroleum products being some

examples.

A congestion charge has been put on specific

commodities

In addition, the Railways have raised the maximum

permissible carrying capacity of its wagons by two to

eight tonnes.


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PASSENGER SECTOR

Indian Railways operates approx. 8,702passenger trains and transports around 5

billion annually across twenty-seven states

and three union territories


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Decisions Taken in Budget

Safety Initiatives: IR created a Special Railway Safety Fund of Rs. 170

billion to improve safety environment, through replacement of over agedrailway assets, that is, tracks, bridges, rolling stock, signaling gears etc.

The number of accidents have been more than halved from 473 (2001)

to 200 (2007).

Use of high technology for passenger safety (train safety devices like

Train Protection and Warning System and Anti-Collision Devices).

Security: Railway Protection Force was strengthened to escort passengertrains in security sensitive areas.

Cleaner Trains Book stalls

Reducing journey times

Increasing bogies

Special Measures for Women commuters


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Catering


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A view of the Garib Rath, train for the poor,that provides comfortable, air-conditioned

travel at affordable cost to India's poor.


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Tatkal (instant)-reserved tickets In the last three years, the number of tatkal seats more

than doubled.

In 2005-06, the daily average number of berths in tatkalquota was 43,000. The next year, it increased to 57,000

and in 2007-08 raised further to 98,000. Tatkal revenue for the Railways almost doubled from Rs

200 crore in 2006-07 to Rs 396 crore in 2007-08.

No slack season (February-March and August) for trainsthat see high purchase of such tickets 80 per cent and

above of the quota .The tatkal quota in such trains hasbeen kept higher than others.


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In the last four years, the Railways have upgraded 210

mail and express trains to the super-fast category, taking

the total number of such trains to 350.

These trains run at an average speed of 55 km per hour

and, after the conversion, their journey time has been cut

by three to six hours.

However, this reclassification has also resulted in more

money (over Rs 114 crore in 2007-08) for the Railways

as each passenger needs to fork out Rs 15 for super-fastcharges. Today, over a fifth of all passenger trains

operated by the Railways are super-fast trains.


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Changes in organizational culture from politicized decision making

to commercial, business oriented decision making.

Facilities for licensed porters

Crew friendly drivers cabins and brake vans were designed.

Establishment of International Railway Strategic ManagementInstitute in 2005

Participation of Railway Employees in Management (PREM)

Corporate Welfare Plan, Staff Welfare, sports club

Evolved a system of ensuring managerial accountability,Performance based rewards


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Internal revenue generation increased from Rs 6,902 crin 2003-04 to Rs 13,612 cr in 2005-2006.

The operating ratio improved from 92% in 2003-2004 to

83.7% in 2005-2006.

The railways transported freight weighing 667 tonnes in2005-06, a 20% increase over the last year.

IR generated a Rs 13,612 cr with 1.422 million

employees on its rolls, ignoring the recommendations of

the Rakesh Mohan committee which emphasized on

having a thinner organization.

More effective use of manpower led to improvement in

staff productivity. Revenue per staff witnessed a rise by

68 percent (2001-2006) as against 49 percent (1996-

2001).


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He disallowed plastic cups used for serving tea at railway

stations and announced that they will be replaced bykulhads(earthen cups). generate rural employment.

reduce garbage as the kulhads are bio- degradable.

He made personal inspections in the railways. He undertook asurprise check at Rail Bhavan in New Delhi. He deducted thesalaries of about 500 latecomer employees and sent them back.

Lalu carried out a surprise check on a goods train coming fromMumbai at Danapur station. He found that weights of

consignments were under-assessed, leading to loss of revenuefor Railways. He claimed that railway officials, transporters andconsignees were part of a racket. A few top BJP leaders,associated with a company called Samrudha Overseas Pvt Ltd,were allegedly involved in the racket.


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He said that he would revoke the contract of A H Wheeler & Co,which runs newspaper stands on most Indian railway stations,because they were enjoying monopoly ever since English(British) left India and would invite open tender.

He maintained passenger profile so that compartments could betaken off or added to trains according to seasonal demand.

As part of his drive to modernize the railways Lalu Prasad Yadavhas decided to send nearly 100 top officials abroad for training inlatest techniques and sharpen their managerial skills in

Management Schools of USA and France.

Lalu Prasad Yadav is now credited with engineering the financialturnaround of Indian Railways, which was on the verge ofbankruptcy. Under him, the Railways booked an unprecedentedsurplus of 110 billion rupees (2.47 billion dollars).


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turnaround of railway business strategy 1232686454800627 2

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