Explores alternative revenue earners, such as ticketing for major sports events.
With the railways debating whether catering services on its network shouldn’t be returned to its earlier direct charge, Indian Railway Catering and Tourism Corporation Ltd is bracing to face an 80 per cent reduction in overall revenue.
The largest chunk of income for IRCTC, set up as a separate company the railways, is from catering services. Of its total income of Rs 619 crore in the last financial year, Rs 341 crore came from the licensee catering segment. Deparmental catering operations accounted for another 23 per cent of the revenues. IRCTC made around Rs 75 crore from the sale of online tickets and Rs 28 crore from tourism services.
In the past few months there have been many complaints from consumers regarding the quality of food provided on board by trains and at railway stations. The minister has announced a comprehensive review of the existing catering policy.
A senior official at the ministry said, “The new policy is looking at putting in place strict monitoring mechanisms to provide good-quality food to common passengers at affordable prices. Emphasis is also being laid on making ‘janata khana’ (economy food) more easily available to the masses.”
In the current financial year, catering services for the new Duronto Expresses, select Rajdhani and mail/express trains have been taken up departmentally by IRCTC, instead of the practice of the latter giving these out of sub-constracts. And, the rail ministry itself decided to handle the catering on a Rajdhani train from Howrah and a Duronto express from Sealdah.
Indications are that the current review may result in the catering responsibility rverting to the pre-IRCTC arrangement, of being handled departmentally by the railways.
In anticipation of this loss of business in the coming financial year, the corporation is exploring new business opportunities in terms of selling tickets and providing catering services for major sporting events to sustain operations.
A senior official at IRCTC said, “We are going to sell tickets for the Commonwealth Games. The profit margin is nominal for this event. The experience will provide us with a platform to do ticketing for other sporting events like the Olympic Games in future.”
The Organising Committee for the Commonwealth Games (CWG) is expecting to sell around Rs 100 crore worth of tickets for the event. Of this, roughly Rs 15 crore will got to IRCTC for meeting expenses related to printing and issuing of tickets.
To further supplement earnings, IRCTC has also bid for providing catering services during the games. An executive associated with the CWG organising committee, while declining to indicate the value of the contract, informed” “The contractor will have to provide four million meals in the entire duration of the event. Bids have been received and the tender will be opened shortly.”
