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Railways to set up business units in each zone to double freight volume, draw road traffic

In a letter, Railway Board said multi-disciplinary business units will be set up & ads will be released to publicise that such units are available & Railways is keen to attract new traffic.

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New Delhi: In a bid to double the freight volume by 2024 and attract road traffic, the Ministry of Railways has decided to set up Business Development Units (BDUs) at all zonal and divisional levels that would stay in touch with industries and advertise the willingness of Railways “to attract new streams of traffic”, ThePrint has learnt. 

According to a letter, dated 1 July, addressed to all general managers (GMs), the Railway Board has said: “There is an urgent need to work towards doubling the freight volume being carried by Railways by 2024. This would be possible only if Railway’s share is strengthened in the traditional commodities being carried and a strong foray is made into miscellaneous non-bulk goods.” 

“This is a segment in which Railways has limited knowledge and experience,” it stated. “However, this traffic is very large in volume and is mostly moving by road,” said the letter, accessed by ThePrint.

In order to attract this traffic, the Railways has decided to set up the BDUs.

“All GMs would set up multi-disciplinary Business Development Unit (BDU) comprising of officers from Operating, Commercial, Finance and Mechanical Departments of SAG (Senior Administrative Grade) level at Zonal Level to be coordinated by CFTM (Chief Freight Traffic Manager),” the Board has said.

“A similar BDU comprising JAG (Junior Administrative Scale)-level officers at the Divisional level will be set up and coordinated by Sr DOM (Senior Divisional Operation Manager),” it added. 

“These groups will have frequent interaction with trade and industry to scout for and attract traffic.”

In a bid to create more awareness about freight travel, it is stated that: “Advertisements will be released frequently in the local and national media to publicise the fact that such BDUs are available and Railways is keen to attract new streams of traffic.”

The name and details of the officer serving as the coordinator should be widely publicised, it added. 

“Any proposal received shall be promptly analysed and developed and assistance required, if any, from other Zonal Railways and Railway Board shall be immediately sought,” the letter stated. 

Also read: Railways sees upward growth in freight earnings for 10 days of June

Concerted attempt to boost freight earnings 

The decision to set up BDUs is just the latest among the slew of steps taken by the Railways to boost freight traffic at a time earnings from passenger trains have nosedived.

“Given the fact that passenger trains have not been moving since late March and would not be moving until mid-August, there has been a concerted attempt by the Railways to boost earnings from freight,” a senior railway official said on condition of anonymity. 

“Freight anyway comprises 65-70 per cent of the revenue of the railways, so a number of steps — like doubling speed, offering discounts, etc. are being taken to boost the earnings from freight,” the official added.

As reported by ThePrint last month, in order to boost its falling earnings and compete with road transport, the Railways had decided to offer discounts to customers who book ‘round-trips’ for freight haulage.

Additionally, in a letter dated 30 June, the Railway Board had come up with policy guidelines for concession in freight charges for long lead traffic. 

According to the policy, for a distance of over 1,400 km for transportation of coal and coke, the Railways will offer a concession of 20 per cent; for a distance of over 1,600 km for transportation of iron and steel, the Railways will offer a concession of 20 per cent; and for a distance of 700-1,500 km and more than 1,500 km for transportation of iron ore, concession of 15 and 20 per cent, respectively, will be offered by the Railways. 

“Zonal Railways will interact with industries on a continuous basis to attract more volumes, which will be monitored by the Railway Board on a periodic basis,” stated the letter seen by ThePrint. 

After the Covid-19-led nationwide lockdown imposed in March, the revenue generated by freight declined by over a third to Rs 13,436 crore in April-May.

Also read: Railways has spent almost Rs 920 crore to stop Covid-19 spread amid huge losses


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  1. The guys working in these units need to undergo some training in PR and business management. Otherwise, the whole effort will fail. Bureaucratic approach to which they are used to will not help to attract business.

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