Indian Railway Catering and Tourism Corporation (IRCTC) made it to the much famed Fortune India Next 500 list of companies for the second consecutive year.
In an interview, A.K. Manocha, CMD/IRCTC said that the company’s plan to construct business lounges, like airports was earlier stalled but after repeatedly requesting the ministry and policy is now changed and IRCTC has successfully commissioned three of them.
He said that one is at Delhi which will be re-commissioned and given to a private sector operator on private-public partnership (PPP) mode to run and operate.
The other two are in Agra and Jaipur, he added.
On the upcoming personal insurance service, Manocha said that the price will start at Rs 0.92 per ticket and will provide an insurance for Rs 10 lakh.
It is expected to be launched in the next 10-15 days by Prime Minister Narendra Modi, he further said.
Below is the transcript of AK Manocha’s interview:
Q: You have made it to the list of Fortune-500 companies for the second year in a row. What is so unique about IRCTC?
A: IRCTC has been in the business of catering and tourism for the last 12 years. And we have been making a fortune every year. We are paying dividend to the government, we are making profits and even to the extent, when catering was taken away from IRCTC and turnover went down to Rs 500 crore, this year we grew to Rs 1,500 crore which is a threefold jump in about last six years.
And I would put it that last year we had a tough challenge also because catering was taken away.
Two years back of course, people were very depressed when catering was taken away. But then gradually our system recovered and our turnover came to somewhere around Rs 650-700 crore. But last year we touched Rs 1,100 crore, this year, 2015-2016 we touched Rs 1,500 crore and we hope that we will be able to beat it and go into Fortune-500.
We have jumped about 250-300 ranks for three years consecutively. And this year ranking will be coming sometime in January.
So, Rs 1,500 crore where we have jumped about 38 percent, we should be in the top-10 or top-15 of the Fortune-500, especially the vision of our Honourable Prime Minister and our Honourable Minister, who are continuously and very user friendly, we get a lot of prodding from the ministry to deliver quickly.
And of course, we want for certain broad guidelines. Sometimes, they take a lot of time, but still, whatever be the constraints of those issues, we have been able to improve the general style of the country and the railway men.
Q: I also want to talk about the passenger amenities because that is something IRCTC is continuously improving, be it water vending machines, be it bed rolls for non-ac passengers. What is the vision as far as passenger amenities are concerned?
A: Let us take it one by one. We have had mandated to construct executive lounges at the station which are business lounges, like airports. So, a few were built a few years back and then, the person who made it just left it because of the usual procedure where rent was increased several fold and land prices also circulate, also went up.
So, the rent became prohibitively expensive. So, after repeatedly requesting the ministry, we were successful in getting the policy changed. We have successfully commissioned three of them. One at New Delhi.
That will be re-commissioned, given to a private sector person on private-public partnership (PPP) mode to run and operate, one at Agra and another at Jaipur.
I am very sure another 45 will be coming not later than next June. And they can be as cheap as, say in Konkan Railway, they are running for Rs 25 per passenger for two hours and where you have WiFi facility and just AC, good comfort, privacy and all those facilities. We give of course, takeaway counter also. So, this is one issue.
Then we have been advised, after a lot of repeated chasing, ministry has agreed and Honourable Minister has already announced in the budget to go for upgradation of retiree rooms which are for people to stay. We are waiting for the policy guidelines. We have already done a pilot project in Katra station.
Q: I am glad you talked about services because we have heard that Railways is planning to come up with a lot of services and there are services such as WiFi or canteens, but it is the maintenance that is an issue. In our own ground reports, we found that maintenance is still one of the major problems of railways. How is IRCTC planning to work around that?
A: Most of the projects, I would say, I personally feel are one of the best models we could think of. They are on PPP mode. Let us take water vending machine which we have mentioned. We already tendered for 2,000 machines, awarded them and more than 500 machines have been installed in a large part of the country.
Another 1,500 are due for installation in about next one year’s time. We have tendered for another 1,000 and that response has been not so warm this time, I must admit. But 45-50 percent will still be finalised.
Q: You mentioned the response was not warm. Why was that?
A: The prime locations have gone, that is number one, because 2,000 is a big number. These were at 700 main stations. Then, the issue remains, some local issues like people must have found some difficulties in bureaucratic rigmarole, that is getting water, electricity connection and handling the local people or local population. But still, we are very sure that we will be able to install more than 5,000 machines in the next one and a half year.
In fact my ambition was to go many fold of this because this is so cheap. You get Rs 1 World Health Organisation (WHO) standard water, chilled water, refill and it gives employment.
So, you can imagine a Rs 5 lakh machine yielding about Rs 10-15 lakh a year. So, it is a lucrative business for most of the people. So, everywhere what we get is a licence piece which is quite good for us, I must admit.
Q: Taking further from water to toilets, you talked about namma toilets that you have installed in certain parts of the country. What is the plan from here on? How many stations are we going to see you covering in the future?
A: We have almost finalised tender for 29 locations. These are part of corporate social responsibility (CSR) and each namma toilet is not a cheap thing. It costs over Rs 17 lakhs. It is a pre-fabricated composite material toilet, consists of eight units, two male, one female, one divyang and four urinals. And biodigester can also be fitted on this. It is approve by Prime Minister’s Office.
The first one was launched by Honourable Cabinet Secretary and it is hugely popular also. The first one was installed by NBCC opposite Hyatt Hotel. So, now recently, one namma toilet was innovated by Honourable Railway Minister about three days back at Khar Road station, local station in Mumbai. Two more are getting installed in Mumbai area within the next 15 days, one at Andheri and another at Bandra.
Q: So you are planning to go pan-India with namma toilets?
A: Yes, and ‘namma’ means ‘us’ or ‘our in Kannada. So, just yesterday I have approved some 6 toilets to be placed on CSR along with water vending machines. So, we are expecting that this year, these 29 toilets should be ready in another two months time.
Q: You think the concept of portable toilets or namma toilets could help solve the sanitation problem that many railway stations are grappling with at this point in time?
A: Toilet sanitation has a host of issues. Namma toilet has the advantage that you can put biodigester. But a negative feature in that is if a plastic bottle or a plastic material is throw, it chokes it and it gives foul smell. They we are also building three glass-top coaches for tourism which is a new initiative.
Of course, we have taken help from Minister of Tourism. These will be ready in another 2-3 months time. And then once these are ready, it will be a swiss experience in India and we have also started dining car facility because we want our country to enjoy. The journey should not be just for the sake of journey.
It should be a pleasurable experience. You should have a high speed WiFi in the train, not only at selected stations. And of course, these can be commercially charged. These are viable options.
We are also going for rail museum upgradation for entertainment and other purposes which will start in another month or two months time. Then e-wheelchair, we extend it to several stations. Then e-bedroll is another initiative.
Then rail mitra seva which we have at some stations. Now we want to expand it several fold. And one thing more you must have heard is passenger insurance.
Q: I want to talk about personal insurance because that is an important service that your coming up with. Personal insurance for as low as Rs 2 per ticket?
A: No, it is Rs 0.92.
Q: Now that is phenomenal. How is that going to work out?
A: I was chasing it for the whole of last year. This has been my ambition that with such a huge population, travelling by train, it should be an asset and everybody should feel secure because government procedure settlement of claims are very lengthy, very cumbersome.
I have worked as Chief Claims Officer for the Northern Railway for three-four times and I have seen how people face the problem despite being monitored by PMO. So, with the pilot, our initial estimate given by one of the insurance companies was Rs 20. We were scared whether local people will go, commuters will go in mumbai.
But now, I am sure, we are starting with Rs 0.92. It is an insurance for Rs 10 lakh.
The pilot is going to be launched within the next 10-15 days by Honourable Prime Minister. Right now, we have given on single insurance that is Rs 10 lakh. It also covers Rs 7.5 lakh for permanent disability, Rs 2 lakh for hospitalisation and Rs 5,000 for baggage loss in case of death, etc.
But this is not my vision. My vision is that it should come down to Rs 0.1 per kilometre for ordinary commuter and next vision is that you do not have to buy even a ticket, your Aadhar card, you have got a credit card with you or debit card with you, it has all the data of Aadhar card linked to it and suppose you are given a card of say denomination of Rs 4,000 in mumbai.
On that card itself, becomes your authority to travel in the train for most of your journey for a limited distance, 30-40 km and then next phase could be that you do not have to even buy a ticket.
Board a train, get down from the station and based on your GPS location, the money is debited from your mobile. Or a challan is sent to your home or to your employer, everyday stuff.
Q: But that is a lot of numbers there and a lot of visionary talks.
A: No, this is not visionary. This is a real talk. After six months you will say that it has happened less than six months. So, I will give you a few examples. I gave you example of Katra.
Our Honourable Minster is very keen that this thing is put on fast tracks. And I am sure in about 10-15 days time, we should be able to get policy on retiree rooms, policy on executive lounges, policy on catering and then you can see the changes. Like, we started Gatimaan Express for tourists. We have introduced the most lucrative brands in the country like Wagh Bakri Tea and Girnar Tea which are served in the airlines for as much as Rs 100-200. We are supplying at, we get not even Rs 5 for a cup of tea. So, despite being a loss, we want to show changes.
The minister has also keen that we set up base kitchens or food factories like Noida food factory. It has to be a unique experience and after some time, people should come from abroad, like they come to see Delhi Metro, they should come to travel in railways because they say flight is so boring.
Given the choice, I would also prefer to go for a station redevelopment. Right now Rail Land Development Authority (RLDA) is handling it. And I will not call it, sky is our limit.
Q: One avenue that you are looking at, station redevelopment right now, you talked about a lot of bottlenecks in implementation of services be it with the authorities that you are working with or the local people. What is IRCTC doing to ensure effective and timely implementation of various services that you are coming up with?
A: Since our minister is keen, we take a lot of help from the ministry to provide the local officials and since I am from the railways also, sometimes, personal contacts work, sometimes my visit to senior officers work, so we try to persuade them and show them a positive side. Like I said, water vending machine gives employment to so many people, so it is a win-win situation for everybody.
Consumer gets a cheap water, instead of Rs 20 water, he can just manage with Rs 1 glass or maybe half a litre in Rs 3. The other advantage is that licensee is very happy, he makes money.
Q: I also heard that IRCTC is looking at opportunities abroad that you have been approached by various authorities from different countries. What are the prospects that you are looking at and what are the collaborations that we can see IRCTC getting into in the future?
A: All international collaborations require help from Ministry and External Affairs Ministry. So there have been people, I can give the example of Mexico where Tourism Minister organised a presentation for everybody, but specific presentation was also organised, IRCTC tour on our most luxurious train called Maharaja in their country. Because they said we want to develop it in our country.
They were even looking forward for a tie-up for laying a railway line. And they also wanted that coach production or factory could also be laid.
Q: So, are you seeking the answers from the Railway Ministry?
A: I am totally bound by government rules. So, it has to be government to government agreement. If I am given a choice, I will camp there for three months and get the orders.
Q: You talked about prospects in redevelopment of stations. What is it that you are currently looking at and are you not happy with what you are doing at this point?
A: No, I am not. For me, a big project gives you a lot of opportunities to try your innovations and my vision is to go for at least maybe 50-100 stations to redevelop. Of course, I cannot touch a station like New Delhi unless we have big people. But as a country, our outputs are way below our expectations, country’s aspiration and not even one-millionth of our potential.
And mumbai is one of the ideal places to do. Mumbai any small station development. So I had asked for it, I did some survey. Now I am looking for partners who can deliver miracles in Mumbai area.
Q: And where? Is there any places that you have identified in Mumbai?
A: If you take another 50 stations in a few days time, I have no problem. We have been approached by reputed builders. Of course, one we are approaching on our own. We have been approached by big finance companies, huge institutions.
Q: So, you are not really happy with the current state of railways?
A: No, I am happy. Happy means what? I feel there is a huge potential. We are at the bottom of the pyramid.
Q: Not many people know that IRCTC is one of the biggest e-commerce players in the country. You deal with 5.5 lakh ticketing passengers every day? What are the avenues that we are looking at here? What sort of revenues that you generate on daily basis?
A: Every day, we pay Rs 65 crore as advanced to railways. If it is a weekend, we pay Rs 130 crore. If it is a three day vacation combined, we pay Rs 300 crore. This is transferred to bank.
We had some problems in ticketing. We announce the capacity, memory from which used to be 2,400, we took it to 15,000. Beyond that, we are slightly reluctant because of three reasons.
One reason is that if it becomes too fast, the tickets will vanish in few seconds. Right now, there are few minutes available for a person to buy a ticket. We have put a check that you cannot buy a ticket through internet in less than 35 seconds.
So, 35 seconds for feeding you data and 10 seconds because we find a lot of complaints about people or agents or unauthorised, unscrupulous people manipulating the software.
Q: Then are you taking some initiatives for that?
A: Yes, we have taken huge initiatives. We have got our software certified by the most reputed group in the country to certify any IT sites, a Government of India undertaking under Department Of Electronics.
That has certified our site to be safe and they carry out several tests which are called vulnerability tests, penetration tests, whatever sites which we locate as vulnerable.
Q: There were reports until a few months back of data theft and that huge number of passengers have lost their data to hackers. Are there any merits to these reports? Were you able to identify the hackers?
A: I will put the facts. As far as we are concerned, we do not find a single hacking case. As far as data theft is considered, the data which we came across, that is data which is available in the market easily. Credit card data, we do not take, we do not keep, we do not maintain, we do not want to maintain also. So, as soon as you go for bank data, the site takes you to the bank itself.
We never found our working to be slow which is an indication of hacking. Once you take link to Aadhar card, we have taken a lot of initiatives, you cannot buy a ticket before 35 seconds. So, that is one check. But from the counter you purchase, but after 35 seconds, once it starts, it is thousands of people clambering for same seats. It is basically demand and supply issue.
But then, yes, we cannot allow unauthorisation, we lodged first information report (FIR), some people were arrested, case has been taken up with them. And then as and when we find anything going wrong, we take a drastic action even against agent. If he gets the money refunded and it does not pass on, the penalties are very severe.
Q: So, you are exploring a lot of other avenues other than ticketing for that matter and you may just give Cleartrip and Make My Holidays a run for their money. How is the business doing as far as the holiday packages are concerned?
A: I will give you the story of Make My Trip of Mr Deep Kalra which he narrated about two months back. He said they came almost as the same time as IRCTC came to the market, internet ticketing.
We started with just 29 tickets and today, we have grown almost a half a million fold. Then he said, for five years, they had to leave the country because the payment system was not established. People were not willing to accept that credibility. And the IRCTC established the credibility so much that they came back and now, today they are one of the market leaders and they use our site and we have got more than 33 banks who use our site and we have got huge tie-ups with state governments and State Bank of India included and other banks also.
Q: And you are also tying up with a lot of companies. What are the other tie-ups that you are looking at and how well are these tie-ups doing?
A: We are keen for tie-ups with each and every person who can deliver us goods. Only thing, he has to meet our criteria. We have only one criteria. The growth should be explosive, so anybody who can meet this challenge and prove his worth is always welcome.
Like I said, station redevelopment, we want rail over bridge to be laid in a few days time, anybody who can meet this challenge is welcome because that is the toughest thing to make in Indian conditions for Indians, not worldwide.
Q: We also heard that IRCTC is exploring an avenue to come up with an e-wallet.
A: We have been running e-wallet. We were charging Rs 250. I reduced it to Rs 50 and for three months, we have made it to zero. We want people to come here, station has gone up several fold.
Then we want to link up to Aadhar Card also. So, we are bound by RBI regulations. But my dream is that each and every person through his bank or otherwise it is linked to our system so, through voter card or Aadhar card. So once that is linked, I told you I do not want anybody to even go for buying a ticket.
Q: Let me then ask you, I can now buy an air ticket from IRCTC website, I can book a hotel, I can book a car. How well is the business doing? You have such a big user base.
A: I want to grow 1,000 fold. It will take at least 1,000 days.
Q: One area where we have seen a lot of transformation is catering. You have recently come up with e-catering. You have tied up with big giants to serve people food on demand from whichever restaurant they like. What is the demand like as far as e-catering is concerned?
A: When we launched this initially, for a few months, we were stick to just 50-60 meals a day. That was because a lot of restrictions were there. And as soon as our minister opened for 400 stations, A1,A and B class stations and others, it has grown 55 times. We are already touched 6,000.
Average is close to 4,000. But that is too small a figure. So, 4,000 meals may look big for a private person, but for an entity like Indian railways or IRCTC, it is just a load for 4-5 trains. So, we are running hundreds of trains every day.
Like I tell my people and generally, people take 3-4 cups of tea every day. So, there are 2.5 crore people going on the train every day. So, at least 10-15 percent of reserved people.