Interview with MD, IRCTC
Two years after the Indian Railways decided to take its core catering business away from the Indian Railway Catering and Tourism Corporation (IRCTC), the public sector undertaking has refocused its business and made a life for itself away from the unit which is now the world’s fourth largest commercial or utility employer. In an interview with Disha Kanwar and Jyoti Mukul, Rakesh Tandon, managing director of the railway undertaking that also runs the country’s biggest e-commerce portal, talks about his plans to improve the services and how technology has changed the face of the business. Edited excerpts:
How did the separation of the catering business affected IRCTC’s revenues and what are you doing to make up for the losses?
As of now, we have made up for around Rs 200 crore of losses of the total of Rs 400 crore we had when the railways took away catering from us. This has been possible by expanding into some non-railway catering businesses. Now we have 30 units in non-railway catering. We are in the process of opening up kiosks at 130 stations of the Delhi Metro. We also have tie ups with HP and BPCL petrol pumps to set up units on highways. All the 32 Durontos are with us and we will continue to handle catering for them.
How do you plan to improve the quality and variety of food on offer given that you have to keep the prices low?
It is a challenge to run quality service at a low cost. We are charging the same prices as we did in 1999-2003. Yet we ensure quality of food by conducting food audits through an independent agency. We are also in discussion with the National Institute of Food Technology to improve quality. We have ISO HACCP certification for our units in trains. Customer satisfaction surveys, hygiene checkpoints, in-house quality team monitoring are some other measures. With these in place, the number of complaints has gone down substantially.
Has the contribution of the online ticket reservation business to the total revenue improved?
Of our total revenue of around Rs 500 crore, about 35-40 per cent, amounting to Rs 170 crore, comes from online reservations. Its share has increased since we took a hit on our catering revenue when the railways changed its policy.
How does IRCTC plan to deal with the bandwidth congestion that consumers face at peak traffic hours? This is imperative if you are looking to drive growth from your online business…
We are concerned about it. Advance reservations for trains as well as Tatkal opens for the day at 8.00 am. The number of people in the queue is about 20 times the number of seats available for reservations. The heaviest rush is for the 1.5 lakh Tatkal seats. Almost 40 per cent of the Tatkal bookings are done in the first 15-20 minutes of opening of the bookings. We have increased our bandwidth tremendously to 512 GHz. But everyone wants seats, which are limited in supply. Greater bandwidth may result in more people logging in at the same time; but then some people will always be disappointed whatever our bandwidth.
We are holding deliberations with the railways about staggering the timing for Tatkal and for the advance reservation period timings. ARP booking can be started after Tatkal, say an hour later, from 9.00 am. That way the load on the site will be staggered and distributed. That should take care of the bandwidth congestion.
What is your business share in railway reservation compared to the passenger reservation system (PRS) counters of the Indian Railways?
Currently, the allotted booking ratio between IRCTC and PRS is 50:50. Before the recent Tatkal scheme, it was 40:60. The PRS counters don’t have much congestion because everyone isn’t trying to book at the same time. However, from 8.00 am to 8:10 am, about 40,000 tickets are booked online, for which around 2 lakh people log on simultaneously. They try several times if a login attempt fails or if tickets are unavailable, which causes the congestion.
How has the new Tatkal scheme benefitted consumers?
The new Tatkal scheme allows for booking tickets 24 hour in advance. Identity proofs have become necessary at the booking windows too, which was earlier only for online tickets. It allows booking for only four passengers per Tatkal ticket. But the most important benefit is that agents are prohibited from 8.00-10.00 am, which earlier was 8.00-9.00 am. At the window also, agents get blocked in the morning hours.
Earlier, there were heavy bookings through the PRS in first two minutes. IRCTC bookings start at around 8:02 am since the transaction itself takes around two minutes. Now that number is reducing. Every minute, there are 2,000- 2,500 reservations taking place. The total number of seats for Tatkal is 1.5 lakh and 30,000-40,000 of these reservations are for popular trains. If 2,000 bookings are through IRCTC and another 2,000 through PRS, then 4,000 reservations take place every minute and in 10 minutes, all seats are booked.
Why don’t you outsource your ‘Plan My Travel’ to another site to ease congestion, since a traveller spends a huge chunk of his time planning his travel?
Internally, we do have some sort of division of work. We have 75 per cent of our servers dedicated for payment gateways whereas 25 per cent are for the Plan My Travel section. So that is not what is causing the congestion. This enquiry part or the journey part of reservation is not affecting our database, and we are gradually shifting a number of activities to separate servers. Outsourcing it to other websites will also necessitate addressing some security concerns of the railways.
What are you doing to reduce transaction time?
The average payment time per transaction itself is about 1.5 to 2.5 minutes. The failure rate, on an average, is 25 per cent. We are tying up with banks and identifying reasons for that. We are also thinking of a rolling deposit scheme for frequent travelers, who will have money pre-deposited with the IRCTC. They will just need to log in and not have to go through the payment gateway, reducing transaction time by 50 per cent. The rupay card will further help in tackling payment gateway issues.
How are you aiming to make things easier for travelers in the rural/far flung areas?
One of the major initiatives in reaching towards the goal would be introducing SMS booking. Going beyond the internet-based portal platform, IRCTC is trying to make reservations possible by sending a SMS with the requisite details, and your booking gets done. The system gets activated and sends another SMS confirming the reservation. This should be possible through regular mobile phones. If we can do that, it will totally change the scenario of ticketing. Another step would be to introduce reservation through voice recognition. This would involve dialing a number and giving ticket details. Through a voice recognition system and giving a pin number, the ticket can be booked. We are still working on these things but we don’t know how long will it take. We have had discussions with the Internet & Mobile Association of India on this.
Any apprehensions from the railways’ own ticketing portal that is expected to be in place?
A ticketing portal is not only a portal, but has a number of services attached to it. The call centre, service requirements, incoming mails, trouble-shooting, ensuring payment security, tying up with banks, management of 18 payment gateways, and a huge frontend which needs to be tackled. We are also doing it on the behalf of the railways only, and may continue doing so.
Chuck Brymer, president and chief executive officer of DDB Worldwide, was in India for the DDB Asia-Pacific Summit in Mumbai between March 26 and 28. ...