Indian Railways is the world's second largest railway system that carries over 18 million passengers daily. Freight revenue makes up 62% of Indian Railways' income. Commercialization of Indian Railways aims to generate more revenue through transportation of both passengers and goods, introduction of information technology, and outsourcing of services like catering and parcel management. Key strategies for commercialization include reviewing value-adding businesses, reducing wagon turnaround times, and developing new products and services.

1. Submitted By:
Avinash Roshan(2010MB70)
Jitendra Singh(2010MB33)
Kunal Bhasney(2010MB29)
Sachin Kumar(2010MB44)

2. Indian Railways
 The world’s second largest railway, carries 18 million passengers each
day and it has
Introduction to IR

3. FREIGHT (GOODS) 62%
PASSENGER
28%
OTHERS 10%
SOURCES OF REVENUE

4. 0
10
20
30
40
50
60
70
80
90
100
2002 2003 2004 2005 2006 2007 2008 2009
98.3
96
92.3 92.1 91
83.2
78.7 75.9
Operating Ratio
back

5. Commercialization of
Indian Railways
Commercialization is important aspect of
Indian railways.
Aims at providing not only service but also to
generate revenue.

6. Why Commercialization???

7. How it revolved?

8. Conceptual Framework

9. Retrenchment
Strategy Effect
1 ) Reviewing value adding business
(Catering, parcel service )
Cost saving > Rs 1,000 crores /annum
2) Reduction of wagon turnaround
time
14 % time saved
3) Outsourcing Improved efficiency

10. Repositioning
Strategy Effect
1 ) Developing new products (Double
stack containers)
Saving: 7% on capital cost , 25%
operational expenses
2) Product differentiation E-ticketing, new passenger coaches
3) Focus on revenue growth(like
enhancement in loading capacity, cash
incentive to free up wagons)
Freight revenue jumped from 233
m(2001) to 417 m(2007).

11. Re- Organization
Strategy Effect
1) Changes in planning system Improved efficiency
2) Extent of decentralization ( like
Zones raised from (2003) to 16 (2005))
Improved vendor satisfaction

12. Areas of Commercialization
Transportation.
Introduction of I.T.
Outsourcing.

13. 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.

14. 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.

15. 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.

16. Transportation
VARIETY OF SERVICES
 AC FIRST CLASS.
 AC SLEEPER.
 FIRST CLASS.
 AC 3 TIER.
 AC CHAIR CAR.
 SLEEPER CLASS.
 ORDINARY CHAIR CAR.

17. 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

18. 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.

19. 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.

20. 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

21. Vinyl wrapped train by Airtel
80 crores contract with airtel and kurkure for ad

22. Catering

23. PALACE ON WHEELS

24. 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

25. What`s next now???

26. References
 www.indianraiways.gov.in
 www.indianrail.gov.in
 Milind.Sathye@canberra.edu.au
 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.

27. References
 www.indianraiways.gov.in
 www.indianrail.gov.in
 Milind.Sathye@canberra.edu.au
 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.