The Karnataka tourism department has received a shot in the arm with the Railway Board agreeing to share the profit instead of collecting the huge haulage charges for running the Golden Chariot, the only luxury train of peninsular India.
The train was running in loss as the Karnataka State Tourism Development Corporation was paying more as haulage charges to the Railways than the revenue generated.
With the decision, the KSTDC will not only make revenue from the luxury train but also generate profit for therailways.
"TheRailways has decided not to go for the haulage charge. They will be sharing the revenue... whatever revenue we get thatwill be shared between the Railways and KSTDC," KSTDC managing director Kumar Pushkar told PTI.
"If I am getting Rs 30 lakh, 56 per cent will go to Railways, balance will come to us. In that we will do all hospitality, tour packages andeverything," he said.
He explained that earlier the Corporation made losses for many years due to very high haulage charges to Railways.
It was paying somewhere between Rs 50 lakh to Rs 55 lakh pertrip, he said.
Pushkar said, "The haulage charges used to be higher than what the total revenue we were getting from the sale of the ticket."
"With this arrangement, running train will be sustainable. It can be done to promote tourism in future years also,"he said.
The agreement will also enable the KSTDC to effect dynamic pricing as exists in the travel industry and earn revenue, the MD said.
During the off-seasons or to attract tourists, ticket prices can also be slashed further.
The Corporation has alsodecided to increase the number of trips.
Finally, the Board agreed with the revenue sharing arrangement.
However, due to very high ticket prices, it failed to woo tourists.
Average occupancy never went up beyond 35 per cent.
The train made its first commercial run on March 10, 2008.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)