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Indian Railways Catering and Tourism Corporation (IRCTC) is looking to break free from the Indian railways. Most well-known in the eyes of the public as the company which runs the widely used railways e-ticketing site, the company also acted as caterer for food served on trains.
However, under a new catering policy in 2010, IRCTC was stripped of the licence to provide catering services to railways except for a handful of trains and a minimal number of food units on station premises. Now, the company serves just 33 trains, compared with 285 earlier.
As a result, in the past one and a half years, IRCTC suffered a jolting loss of Rs 270 crore in its catering business . Total revenues fell from Rs 722 crore in 2010 to Rs 554 crore in 2011-12 . As a result, the company is forced to look elsewhere to make up the lost revenue.
Caterer to corporates
To start with, it plans to open 5 automated kitchens all over the country in the next two years to offer catering services to corporates and other institutional customers.
It recently opened one at Noida which has a noteworthy client list - HCL, Samsung, Aditya Birla, and Supertech builders among others.
With an investment of Rs 5.5 crore, this facility has a capacity of 10,000 meals per day, which it plans to scale up to 25,000 meals per day by next year.
Another facility will open in Chennai by the end of this year and in Bangalore, Mumbai and Kolkata by next year. It is also all set to increase the number of Rail Neer plants from 3 to 9.
The 6 new plants that will come up in Amethi, Ambala, Nasik, Kerela and West Bengal will be based on the PPP model.
The company also began offering air ticket bookings on its site in May this year, thus entering an already fiercely competitive sector.
"There are private players and there is cutthroat competition, but we have ventured into air ticketing with our trustworthy image and a great record of rail ticket booking ," said the spokesperson of IRCTC.
Incumbents in the field of online air ticketing are, unsurprisingly, sceptical. "IRCTC's customer profile is different from air traffic consumers and it will have to invest heavily in brand," says Prateik Mazumdar, head of marketing and strategic alliances at Yatra. com.
"We don't think they'll change competition in the sector. Building a brand takes years and we (online travel agencies) already have a captive customer base of 75%."
Revamping e-ticketing
IRCTC still operates the largest e-commerce site in the whole of the Asia-Pacific region.
The company sold about 12 crore rail tickets in FY 11-12 , amounting to a gross value of Rs 10,000 crore - a growth of 20% over the last financial year.
IRCTC earned a service charge of Rs 160 crore out of the ticket booking business. But Irctc.co.in (the web portal for rail ticket booking) has faced a lot of criticism for congestion, technical glitches and illegal booking by agents.
Most well-known in the eyes of the public as the company which runs the widely used railways e-ticketing site, the company also acted as caterer for food served on trains.
IRCTC says it has a clear plan to do away with touts, and says the online portal is being given a facelift. While there is now a pre-set time decided for tatkal tickets and ARP (advance reservation period) tickets, there are strict guidelines and surveillance of multiple agent ids and multiple bookings from the same IP address. "This has decreased the load and the website is running smoothly. From earlier 8 to 9 lakh hits per day, it has now gone down to half," said the spokesperson.
After facing a lot of heat about its slow and clunky transaction window, it has plans to make payment easy for consumers. The first change was a 'rolling deposit scheme' , which allowed consumers to deposit funds with the web portal for booking tickets, hence doing away with the bank payment gateway route, which not only wasted time but also caused transaction related issues.
IRCTC went paperless last year, by asking passengers to show the e-copy or the booking confirmation text message on mobile phone rather than printed tickets. Now it's also planning to provide a facility under which a customer could book tickets by just sending a text message to IRCTC. The company plans to roll it out next year.
Tourism... Horticulture...
A venture into facilities management is also planned. "We will provide housekeeping, horticulture, and security related services to the institutions where we are already catering and then move on to being a full fledged facility management service provider," said the spokesperson.
From customised tour packages for families , students, and corporates to starting short tour facilities, the company is trying to catch up with all the current trends in the tourism sector as well.
Its 'budget hotel' plan, which reached a dead-end when railways refused to offer land, is also being re-planned . The company is now looking at a joint venture with state governments, who will provide real estate around railway stations to set up budget hotels. IRCTC wants to become a Rs 2500 crore company by 2015.
It aims to reduce the share of catering in overall revenues from 70% currently to about 40%, and double the share of its ticketing and tourism business to 60%. With such ambitious plans, and given the problems it has faced in the past over e-ticketing issues, and the quality of its catering, the onus is very much on the company to prove itself.
Now, IRCTC lets you book air tickets online - The Times of India
However, under a new catering policy in 2010, IRCTC was stripped of the licence to provide catering services to railways except for a handful of trains and a minimal number of food units on station premises. Now, the company serves just 33 trains, compared with 285 earlier.
As a result, in the past one and a half years, IRCTC suffered a jolting loss of Rs 270 crore in its catering business . Total revenues fell from Rs 722 crore in 2010 to Rs 554 crore in 2011-12 . As a result, the company is forced to look elsewhere to make up the lost revenue.
Caterer to corporates
To start with, it plans to open 5 automated kitchens all over the country in the next two years to offer catering services to corporates and other institutional customers.
It recently opened one at Noida which has a noteworthy client list - HCL, Samsung, Aditya Birla, and Supertech builders among others.
With an investment of Rs 5.5 crore, this facility has a capacity of 10,000 meals per day, which it plans to scale up to 25,000 meals per day by next year.
Another facility will open in Chennai by the end of this year and in Bangalore, Mumbai and Kolkata by next year. It is also all set to increase the number of Rail Neer plants from 3 to 9.
The 6 new plants that will come up in Amethi, Ambala, Nasik, Kerela and West Bengal will be based on the PPP model.
The company also began offering air ticket bookings on its site in May this year, thus entering an already fiercely competitive sector.
"There are private players and there is cutthroat competition, but we have ventured into air ticketing with our trustworthy image and a great record of rail ticket booking ," said the spokesperson of IRCTC.
Incumbents in the field of online air ticketing are, unsurprisingly, sceptical. "IRCTC's customer profile is different from air traffic consumers and it will have to invest heavily in brand," says Prateik Mazumdar, head of marketing and strategic alliances at Yatra. com.
"We don't think they'll change competition in the sector. Building a brand takes years and we (online travel agencies) already have a captive customer base of 75%."
Revamping e-ticketing
IRCTC still operates the largest e-commerce site in the whole of the Asia-Pacific region.
The company sold about 12 crore rail tickets in FY 11-12 , amounting to a gross value of Rs 10,000 crore - a growth of 20% over the last financial year.
IRCTC earned a service charge of Rs 160 crore out of the ticket booking business. But Irctc.co.in (the web portal for rail ticket booking) has faced a lot of criticism for congestion, technical glitches and illegal booking by agents.
Most well-known in the eyes of the public as the company which runs the widely used railways e-ticketing site, the company also acted as caterer for food served on trains.
IRCTC says it has a clear plan to do away with touts, and says the online portal is being given a facelift. While there is now a pre-set time decided for tatkal tickets and ARP (advance reservation period) tickets, there are strict guidelines and surveillance of multiple agent ids and multiple bookings from the same IP address. "This has decreased the load and the website is running smoothly. From earlier 8 to 9 lakh hits per day, it has now gone down to half," said the spokesperson.
After facing a lot of heat about its slow and clunky transaction window, it has plans to make payment easy for consumers. The first change was a 'rolling deposit scheme' , which allowed consumers to deposit funds with the web portal for booking tickets, hence doing away with the bank payment gateway route, which not only wasted time but also caused transaction related issues.
IRCTC went paperless last year, by asking passengers to show the e-copy or the booking confirmation text message on mobile phone rather than printed tickets. Now it's also planning to provide a facility under which a customer could book tickets by just sending a text message to IRCTC. The company plans to roll it out next year.
Tourism... Horticulture...
A venture into facilities management is also planned. "We will provide housekeeping, horticulture, and security related services to the institutions where we are already catering and then move on to being a full fledged facility management service provider," said the spokesperson.
From customised tour packages for families , students, and corporates to starting short tour facilities, the company is trying to catch up with all the current trends in the tourism sector as well.
Its 'budget hotel' plan, which reached a dead-end when railways refused to offer land, is also being re-planned . The company is now looking at a joint venture with state governments, who will provide real estate around railway stations to set up budget hotels. IRCTC wants to become a Rs 2500 crore company by 2015.
It aims to reduce the share of catering in overall revenues from 70% currently to about 40%, and double the share of its ticketing and tourism business to 60%. With such ambitious plans, and given the problems it has faced in the past over e-ticketing issues, and the quality of its catering, the onus is very much on the company to prove itself.
Now, IRCTC lets you book air tickets online - The Times of India
