As Premium trains crash, railways ride Suvidha

The railways, having jumped on to the Suvidha train bandwagon, is now, at least in private, admitting that the earlier avatar of the scheme – the market-controlled dynamic fare premium concept — was ‘illogical’ and ‘extremely passenger-unfriendly’. Started in December 2013 on the Mumbai-Delhi route, Premium trains hit passengers’ pockets deep. Fares often crossed the Rs 10,000-mark. dna gives a break-up of why the concept was the most illogical one.


The Premium train loot:

Independent class structure
Singularly, the most illogical system. Under this structure, all classes — 2AC, 3AC and Sleeper — were considered as separate units while calculating the base price of a particular day or time of booking. Since people prefer lower classes – a hallmark of almost all developing economies – this structure created a situation where 3AC fares exceeded those of 2AC. For example, if 20 people are vying for a 2AC ticket costing Rs 1,500 and 30 people for a 3AC ticket costing Rs 1,000, the computer formula would decide that the demand for 3AC tickets had reached its peak and would promptly increase the price of 3AC tickets to the maximum Rs 3,000 – three times the fare. The same formula would decide that the demand for 2AC tickets are still away from peaking and would set its price at Rs 2,000. So, there will be hundreds of passengers buying 3AC tickets for Rs 3,000 and hundreds of others buying 2AC tickets for Rs 2,000.

Absolute secrecy in fare formula
Cloaked in absolute secrecy, the fare formula of Premium trains was set in a ‘take it or leave it’ manner on the IRCTC website. Even today, most railways officials are unaware of the nitty-gritty of how the formula for the day’s fare is calculated. Moreover, the railways never informed passengers the rates for different classes at the time of booking.

In fact, one of the instructions in the railway commercial circular 33/2015 on Suvidha trains is that ‘information should be displayed to the passenger during booking, in case the fare of the lower class becomes higher than the higher class’.

Abuse of monopoly
Blatantly abusing its monopoly, the railways decided that there would be no refund, once the ticket was booked, whatever be the reason (except only if the service gets cancelled).

No pantry car, yet pay catering charges
The Premium train fare would include catering charges, despite the fact that several premium trains were overnight ones and some others did not even have pantry cars. The result was that when other trains were running fully packed, with long waiting lists, Premium trains were running at 30 per cent occupancy levels. This left 70 per cent seats to perish, though there were twice that many passengers on the waiting list for other trains.

On silent mode
In private, officials admit that the premium fare concept and its lack of logic just showed how incompetent several senior commercial as well as Railway Board officials were when it came to trying to get the railways out of the financial mess it was in. Mails sent to railway minister Suresh Prabhu and messages sent to Kundan Sinha, member (traffic), railway board, did not elicit any response.

The Suvidha scheme
The new Suvidha scheme, running since end-July and expected to peak during the forthcoming Diwali-Dussera-Christmas season, appears logical, at least on paper, though it is still early days. The fare system follows the ‘bucket’ format. It means that the entire ticketing is broken up into five parts – or buckets- with a proportionate increase for every bucket. The base fare is fixed at the tatkal fare of the top-most train on the same route.

The first 20 per cent tickets will be sold at this price. The next 20 per cent will be 1.5 times the base fare. The third bucket of 20 per cent will be 2 times the base fare, the fourth 2.5 times, and the last 20 per cent 3 times the base fare. The Suvidha system provides for refunds, RAC tickets and non-compulsory catering charges.

Posted by on October 6, 2015. Filed under Nation. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.