With the Railways taking away catering of 236 trains from Indian Railways Catering and Tourism Corporation (IRCTC), the government undertaking is finding its revenue under squeeze. To address the issue, IRCTC is venturing into facility management services.
IRCTC’s earnings from non-railway catering that was just Rs 6 crore last year is projected to increase to Rs 54 crore this year. The change in the railway catering policy last year had pulled down its own PSU’s revenue by 30 per cent to Rs 436 crore from Rs 730 crore during 2009-10.
Of the total business that IRCTC generates, catering forms 80 per cent and at present, 70 per cent of it comes from providing catering services to the Railways.
“Several government departments are looking for a single service provider for catering, house-keeping, landscaping and security in a building. So, IRCTC sees a great opportunity in facility management,” said to a senior IRCTC official.
IRCTC provides catering services to the ministry of finance, Indian Institute of Technology-Delhi, Indian Institute of Public Administration, Indian Institute of Foreign Trade, Airports Authority of India, Udyog Bhawan and Krishi Bhawan. It recently opened its 17th non-railway catering unit in Delhi at ministry of corporate affairs.
The Railways’ New Catering Policy 2010 had taken away catering services of 236 trains of the 260 trains. Now, IRCTC is left with the catering services of 24 trains, including six Rajdhanis and 18 Durontos. The Railways intends to take the catering services of these 24 trains also in the long run. As soon as it is able to redeploy the departmental staff of IRCTC to some other place, the Railways will take over these trains forcing IRCTC to look to non-train catering.
On the argument of increasing the number of complaints that people had against catering services of IRCTC, the official said the Railways did not raise catering charges since 1999. The pricing of eatables were not in sync with the market dynamics.
This impacted the quantity and service.
In the course of subsidisation, the catering business was losing its financial viability and customer were on the receiving end.
In response to the allegation that tenders were given repeatedly to a few parties, the official admitted that 32 parties provided services in 264 trains, but among them three to four were dominant. These parties have economies of scale and come through right procedures,so there is no procedural violation.
According to the New Catering Policy, 2010, the railways intends to take over catering services of all trains, leaving food plazas, food courts and fast food units on the railway station to IRCTC. The departmentalisation of mobile catering units, including base kitchens, is supposed to take place in phases.
To control the monopoly, the Railways have put a ceiling on the number of licensees to whom the Railways can give contract. The menu and tariff of Rajdhani, Shatabadi and Duronto trains will be fixed by the Railways board, else it would be handled by the respective railway zones.