IR Plans Improvement in Operating Ratio – I: Trimming Costs

Indian Railways (IR) has unveiled a slew of measures to boost profitability and attain a 95 per cent operating ratio (ratio of expenses to earnings) for the current fiscal. IR had an operating ratio of 98.4 in FY18.

Outlining a series of immediate and short-term measures to save money, the Railway Board has decided to absorb an increase in Rs 5,000 crore due to post budget developments within the sanctioned grant of Rs 1.55 lakh crore under the head ordinary working expenses. The savings will be made from fuel (Rs 3500 crore), staff cost (Rs 1000 crore) and the remaining from contractual payments, procurement and the like.

Save diesel

IR has decided to do away with diesel locos aged over 30 years.

Use of head-on-generation to save power cost besides adding an extra coach will be done. [HOG refers to the use of power drawn from overhead wires to power AC coaches in trains instead of a generator coach known as end-on-generator car. This will save of fuel cost besides generating revenue as an extra coach will be attached for passengers.

Stalls will be charged for electricity on a pre-paid metering basis while metering and billing for IR’s domestic consumption will be done using handheld devices.

 Procurement and Rolling Stock

On the procurement front, IR has decided to zero-based material planning and review of its anticipated annual consumption (AAC) and estimated annual requirement (EAR). Spares for different types of rolling stock will be standardized to ensure smooth procurement.

Also on the anvil is aligning replacement schedule of rolling stock’s spares with their maintenance schedules. This is likely to synchronise maintenance with operations better. En-route examination of premium rakes has been permitted.

Computer-aided matching of occupancy and rake composition has been mooted to save variable costs. This will ensure that the rake composition will consist of coaches according to the advance booking pattern as against the present system of standardized rake formation.

Payment of overtime and travel allowance to employees will be capped.

 Short-term measures

IR plans to prioritise essential expenditure and reduce diesel consumption in a targeted manner.

Rationalisation of railway consumer depots for fuel and use of diesel for non-traction purposes besides total fuel management will be done.

IR also plans to cover remaining states under open access mode for its power purchases. Electrification of full routes (major origin-destination pairs) will be done to prevent running diesel locos under wires. These routes will have full infrastructure such as traction substations (TSS). Use of optical fibre over copper cables will be encouraged.


Existing railway tracks will be replaced as per the gross million tonnes (GMT) moved over them and not as per condition. This takes into account the rail grinding done during track maintenance.

Other short-term measures

These include a review of trains with less than 50 per cent occupancy levels and combining them with other trains for improvement. Time and motion studies will be done to rationalize incentives at workshops besides reviewing yardsticks for productivity and benchmarking.

Foreign visits for inspection and study will be regulated and staff quarters will be repaired/maintained through land monetization. Finally, cleanliness of trains and station will be done as partnerships via the corporate social responsibility /sponsorship route.

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1 Comment

  1. HOG is right step in reducing operating expenses. immediate service in SCR that is available to use this is 12795 & 12796 with SC-GNT section is now completely electrified. When NDL-YL is also electrified in GTL division, this can be used for 17215/17214 as these are on LHB

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