 "We can sell tickets even for space travel: A K Manocha")
The Indian Railway Catering and Tourism Corporation (IRCTC) has come a long way from its initial mandate of making rail ticket booking easy for passengers. It now offers a bouquet of services such as online booking of food to be delivered on trains, executive lounges, budget hotels and, even helicopter services. IRCTC Chairman and Managing Director A K Manocha discusses IRCTC’s future road map with Shine Jacob. Edited excerpts:
Last year, you total income grew substantially. What are your growth expectations for this year?
There are a lot of things in the offing. First, we are going to take up the catering in railways. We are yet to receive the policy from the Railway Board. Currently, we manage only two per cent of catering in the Railways. Pantry car catering is licence-based catering and it is still with the Ministry of Railways. We do only 40-50 trains, that too on a temporary basis. So far, there has been no policy. It is currently under discussion and is likely to be issued by the end of this month. Once that policy is in place, in phases, we’ll be expanding our presence in catering.
You seem to be keen on expanding in hospitality industry. What is your road map?
We’re planning to set up some budget hotels and we’ll go for the public-private partnership model. Compared to the traditional Yatri Niwas, this will be having two differences. It might not be necessarily for passengers, if the Railway Board approves it. It might not also be three-star hotels like Yatri Niwas; it could be two-star or even one-star. Currently, we are starting a first-of-its-kind hotel at Gomti Nagar in Lucknow. We have identified land and has approached the Lucknow Development Authority for approval. We are also looking at places like Sawantwadi and Khajuraho to set up similar hotels to attract more tourists. Currently, IRCTC has four budget hotels – Ginger in Delhi, Ranchi, Howrah and Puri. We are keen to look at growth in the inorganic mode as well. We are also going for improvement of 200 retiring rooms at 600 stations in due course.
We have given tenders for 25-30 executive lounges at various stations. These should be ready by March next year. The tendering process for another 12 lounges is ongoing. It will be airport-like services on pay-and-use model. Facilities such as broadband, television etc will be available.
What are the developments in the e-commerce space?
There are a lot of things going on in this space. We are in talks with Flipkart, SnapDeal and Paytm. We have tied up with State Bank of India and are trying to expand our website, too. We are open to any idea; if you want a ticket for space travel, we can provide even that. We might even enter the entertainment business. We are planning to tie up with self-help groups for tasty local foods.
Cyber security is a major concern for many companies in the online space. How are you taking up this issue?
We get huge traffic. IRCTC was able to sell 199.4 million rail tickets in FY16. We audit our cyber security every six months with the help of an external agency. They do two-three types of tests such as penetration test, vulnerability test etc. Moreover, our team is monitoring it on a regular basis.
What is the status of insurance policy for passengers the government is set to launch?
Currently, it would be launched on a pilot basis next month. At first, insurance would be available for those who book tickets online. With a premium of 92 paise, one can get a coverage of up to Rs 10 lakh. Later, the scheme could be extended to season ticket travellers, where for a premium of Rs 200-300, they will get annual coverage. In case of death or permanent disability of the traveller, Rs 10 lakh will be provided. For permanent partial disability, the coverage extends to Rs 7.5 lakh; for hospital expenses, the coverage would be up to Rs 2 lakh. In addition, the insurance would provide Rs 10,000 for transportation of mortal remains.
What is your strategy for Rail Neer?
Right now, we are supplying only 20 per cent of the Railways’ requirement. We are keen on exporting it, too. We have to compete with international brands in terms of price, shelf-life and packaging. The total market size of packaged drinking water in the country is about Rs 50,000 crore and our size is only Rs 120-130 crore. In Railway stations alone, about one billion bottles are sold every year, out of which we supply only about 200 million. We are planning to commission two more plants this year — in Guwahati and Vijayawada.
Last year, you total income grew substantially. What are your growth expectations for this year?
There are a lot of things in the offing. First, we are going to take up the catering in railways. We are yet to receive the policy from the Railway Board. Currently, we manage only two per cent of catering in the Railways. Pantry car catering is licence-based catering and it is still with the Ministry of Railways. We do only 40-50 trains, that too on a temporary basis. So far, there has been no policy. It is currently under discussion and is likely to be issued by the end of this month. Once that policy is in place, in phases, we’ll be expanding our presence in catering.
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The second priority is to set up food factories, like the one in Noida. This will be of different sizes and volumes. That will improve our quality of food, supply, logistics and also our earnings. We have introduced ready-to-eat meal and semi-dried meal. The business of water vending is likely to go substantially. We are touching about 500 machines, which would increase to 2,000 by the end of this year. In FY16, our overall revenue witnessed a 31 per cent jump. It now stands at approximately Rs 1,500 crore. Our profit after tax witnessed a 38 per cent jump in FY16 to Rs 180 crore. We want IRCTC not to be like bullet train, but like a rocket in terms of growth.
You seem to be keen on expanding in hospitality industry. What is your road map?
We’re planning to set up some budget hotels and we’ll go for the public-private partnership model. Compared to the traditional Yatri Niwas, this will be having two differences. It might not be necessarily for passengers, if the Railway Board approves it. It might not also be three-star hotels like Yatri Niwas; it could be two-star or even one-star. Currently, we are starting a first-of-its-kind hotel at Gomti Nagar in Lucknow. We have identified land and has approached the Lucknow Development Authority for approval. We are also looking at places like Sawantwadi and Khajuraho to set up similar hotels to attract more tourists. Currently, IRCTC has four budget hotels – Ginger in Delhi, Ranchi, Howrah and Puri. We are keen to look at growth in the inorganic mode as well. We are also going for improvement of 200 retiring rooms at 600 stations in due course.
We have given tenders for 25-30 executive lounges at various stations. These should be ready by March next year. The tendering process for another 12 lounges is ongoing. It will be airport-like services on pay-and-use model. Facilities such as broadband, television etc will be available.
What are the developments in the e-commerce space?
There are a lot of things going on in this space. We are in talks with Flipkart, SnapDeal and Paytm. We have tied up with State Bank of India and are trying to expand our website, too. We are open to any idea; if you want a ticket for space travel, we can provide even that. We might even enter the entertainment business. We are planning to tie up with self-help groups for tasty local foods.
Cyber security is a major concern for many companies in the online space. How are you taking up this issue?
We get huge traffic. IRCTC was able to sell 199.4 million rail tickets in FY16. We audit our cyber security every six months with the help of an external agency. They do two-three types of tests such as penetration test, vulnerability test etc. Moreover, our team is monitoring it on a regular basis.
What is the status of insurance policy for passengers the government is set to launch?
Currently, it would be launched on a pilot basis next month. At first, insurance would be available for those who book tickets online. With a premium of 92 paise, one can get a coverage of up to Rs 10 lakh. Later, the scheme could be extended to season ticket travellers, where for a premium of Rs 200-300, they will get annual coverage. In case of death or permanent disability of the traveller, Rs 10 lakh will be provided. For permanent partial disability, the coverage extends to Rs 7.5 lakh; for hospital expenses, the coverage would be up to Rs 2 lakh. In addition, the insurance would provide Rs 10,000 for transportation of mortal remains.
What is your strategy for Rail Neer?
Right now, we are supplying only 20 per cent of the Railways’ requirement. We are keen on exporting it, too. We have to compete with international brands in terms of price, shelf-life and packaging. The total market size of packaged drinking water in the country is about Rs 50,000 crore and our size is only Rs 120-130 crore. In Railway stations alone, about one billion bottles are sold every year, out of which we supply only about 200 million. We are planning to commission two more plants this year — in Guwahati and Vijayawada.