Last week, I planned a weekend trip to Agra along with my family. Since we had relocated to Gurugram, we had not been able to go out even once to explore the city or area around it. So, a trip to Agra, being just a couple of hours away from Gurugram, seemed like a very good proposition. Immediately, I opened my laptop to book railway tickets for Agra. But alas!! All the trains were full. The waiting list in every other train was well above the 200 figure mark. I had no choice but to wait until the day before my journey day to try the ‘Tatkal’ route. But, there was greater disappointment for me in store on that day. The Railways’ site for online ticket booking itself didn’t open on time and by the time it did, the ‘Tatkal’ quota had also been booked. Grudgingly, I was left with no option but to cancel the trip.
This incident made me curse the Indian Railways no end. Why do they allow the booking of tickets four months in advance? So that they can get ‘free’ float funds in hundreds of crores? They themselves must be earning a handsome amount of interest on these funds without having to pay any interest to the passengers. Even though the capacity of an unreserved coach is 90 passengers, tickets are often issued to double that number of passengers. That is why the unreserved coaches are always jam-packed with passengers. I thought that the Indian Railways must be earning a handsome profit by adopting such tactics and out of curiosity, I googled the income statistics of Indian Railways.
Now, grudge made way for a surprise. And surprised indeed I was because I came to know that the passenger segment of the Indian Railways is highly subsidized and loss-making, contrary to what I was thinking.
The first passenger train in our country, carrying 400 passengers in 14 coaches, ran for 34 km between Bori Bunder (Mumbai) and Thane on April 16, 1853. Initially, the coaches didn’t have even toilets which were introduced only after the national carrier completed 50 years! Lighting in passenger coaches was introduced in 1897. Later on, other facilities like fans and sleeping accommodation were also introduced. In 1956, the first fully air-conditioned train was introduced between Delhi and Howrah. In 1986, computerized ticketing and reservation were introduced in New Delhi. The first Shatabdi Express was introduced between New Delhi and Jhansi in 1988.
Today, the Indian Railways (IR) is the largest rail network in Asia and the second largest in the world. It transports about 2.5 crore passengers (almost equal to the population of Australia) daily. Even with such a volume of passenger traffic, the Railways makes losses from the passenger segment. The Indian Railways is the national carrier for the country’s masses. It is the preferred mode of transport for the poorest of the poor. As such, it has obligations towards society as well apart from earning revenue. Traditionally, the fares have not been increased much due to this and other political reasons. The fares were last revised in 2014.
The losses from the passenger segment of Railways are compensated by profits from the freight segment and almost 95% of the profit from the freight segment goes towards cross-subsidisation of the passenger segment. This results in the deterioration of the financial performance as a whole of the national carrier. As per the data released by the Railway Ministry, the operating ratio for the freight segment in FY 2017-18 was 58.83% which means on every Rs 100 of revenue, the freight segment was making a handsome profit of Rs 41.17. But surprisingly, the overall operating ratio for the Railways as a whole was at a level of 98.44%-the worst in the last 10 years. This was because the operating ratio for the passenger segment was at a dismal level of 181.20% which means that to generate every Rs 100 of revenue from the passenger segment, the carrier was spending Rs 181.20!
Although no drastic measures have been ever taken by the Govt. regarding the increase in fares due to the reasons enumerated above, yet, the Govt. has taken a slew of measures from time to time towards improving the financial health of the national carrier. Some of these measures are:
1.‘Give up’ Scheme: It was started in 2017 to encourage senior citizens to give up their train fare concessions in a bid to increase revenue. As per CAG audit report, during the FY 2017-18, Rs 1411.23 crores worth of concession in fare was given to 5.92 crore senior citizens. The CAG report also stated that while the national carrier earned Rs 88064 crores as revenue from 2015-16 to 2017-18 from the sale of reserved tickets, it also allowed concession of Rs 7418 crores on these reserved tickets during the same period. Also, 89.7% of the revenue foregone towards concessions is on account of concession to senior citizens and privilege pass/PTO holders.
2.Dynamic Fare Pricing/Flexi fares: The Railways had introduced dynamic pricing of tickets in September 2016 for 142 of its premium trains-44 Rajdhani, 46 Shatabdi and 52 Duronto trains. Under this rule, the price of the ticket goes up as bookings grow. The fare would go up by 10% for every lot of 10% tickets booked. However, the scheme has been scrapped in most of the trains as it led to the loss of traffic volume for the national carrier.
3.Modernisation: One of the main reasons for the failure of a Flexi fare scheme was the competition to the Railways from low-cost airlines. Flexi-fare scheme reduced the gap between rail and airline tickets. Also, the quality of services and journey-time factor favoured the airlines. Now, the railways has also started modernizing its fleet by taking various measures some of which are as follows:
a)Introduction of LHB (Linke-Hofmann-Busch,Germany) Coaches: Traditionally, the Railways has been using ICF (Integral Coach Factory, Chennai) coaches. These coaches are considered having inadequate safety measures and are being slowly phased out. These are being replaced with LHB coaches which were introduced in mid-90s. These coaches are lighter, safer and capable of speeds upto 160 kmph.
b)Route Electrification: The national carrier has electrified about 46% of its running track as on March 31, 2019. As per the Railway Ministry, the entire track length in the country would be electrified by 2022.
c)Track modernization: Various initiatives have been undertaken by the Indian Railways for modernization of tracks as well. Nowadays, Pre-Stressed Concrete (PSC) sleepers are being increasingly used in place of wooden sleepers as these are economically and functionally best suited for high-speed and heavy density traffic. Long rail panels or welded rails are being used in place of rails with fish plated joints. Rails now being used are having high tensile strength. Bridges are being strengthened/rebuilt.
Signalling system for the trains is also undergoing continuous revamping. Automatic Train Protection (ATP) system based on the proven European Train Control System (ETCS) is being implemented on the tracks. The system will help in the seamless transmission of information between tracks and the engine cabin electronically. It will help in keeping train speed within the permissible limit.
d)Upgradation of Railway Platforms: The facilities and services at railway platforms are being upgraded to offer a convenient, hassle-free and pleasant travelling experience to the passengers. Escalators have been installed at select stations like New Delhi, to begin with. Free Wi-Fi facility is being offered to passengers. Use of false ceiling is being done to enhance the aesthetic appeal of the platforms.
e)Introduction of High-tech trains: To compete with the travel experience provided by low-cost airlines, the national carrier has introduced some modern, high-tech trains like:
i)Vande Bharat Express: It is also known as Train 18. It is a semi high-speed, air-conditioned day time journey train with modern facilities like Wi-Fi, snacks tables, CCTV cameras, hydraulic pressure doors as well as fire and smoke detection and extinguishing system. The train can run at a top speed of 200 kmph.
ii)Tejas Express: It is a semi high-speed, air-conditioned train which was introduced in 2017. The coaches in this train have LED TV on each passenger seat with a phone jack, local cuisine, Wi-Fi, tea and coffee vending machines, CCTV cameras, smoke and fire detection and extinguishing system, bio-vacuum toilets, tap sensors, hand dryers and integrated Braille displays. It can also run at a top speed of 200 kmph.
iii) Gatimaan Express: It is a semi high-speed, air-conditioned train running between Delhi and Jhansi at a top speed of 160 kmph.
iv) Humsafar Express: It is an air-conditioned train with 3-tier coaches and had its inaugural run between Gorakhpur and Anand Vihar terminal. It is equipped with LED screens displaying information about stations and train speed, a PA system, tea and coffee vending machines, charging ports for electronic devices, bio-toilets, CCTV cameras, smoke alarms and heating and refrigeration facilities for food.
v)Bullet Train: The first high-speed rail link in the country has been proposed between Mumbai and Ahmedabad. The work on the project is expected to begin in April 2020 and completed by Dec 2023. The trains on this line will run at speeds ranging from 320 to 350 kmph.
4.Dedicated Freight Corridor: The Railways has one of the lowest passenger fares and highest freight fares in the world. The freight segment faces stiff competition from the road transport segment. The passenger and freight trains run on the same network of rail tracks. Many times, freight trains have to be stopped midway to allow smooth passage of passenger traffic. There is thus an urgent need to provide a dedicated freight corridor for freight trains so that their service can be made world-class. It will help the national carrier to compete better against the road transport sector.
5.Revision of Child fare rule: The Railways has also revised its child fare rule since 2016. Now, children of age 5 years and under 12 years of age are charged full ticket in reserved coaches instead of half ticket if a berth is sought for them. However, if the berth is not sought for the child, then half of the full adult fare will continue to be charged as hitherto.
In view of the above, it can be said that the Indian Railways has chalked out an ambitious plan to bring the finances of the national carrier in the pink of health. Much will now depend on how the various measures are put to execution within the timelines envisaged.
After going through all the above facts, the surprise, that I felt on discovering that the passenger segment of the railways is a loss-making segment, now gave way to concern and I could only say ‘All the Best’ to the national carrier.
Dear Dr S. Manivannan,
I would like to share my ideas on
Operations Management with specific reference to our Indian Railways.
Revamping Railways – common People’s suggestions to improve railways operational productivity without much capital investment
My details :
www. dhanasekarspeaks. blogspot.com
How to raise money for Railways to provide better Services
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>
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> Millions of people all over the world are train enthusiasts including yours truly.
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> Many people are regular, dedicated, faithful, loyal users of trains even if the train services are not frequent, expensive and more time consuming than road transport because of it’s sheer convenience and comfort.
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> LET US FOLLOW THE BUS / LORRY SECTOR’S PRODUCTIVITY MAXIM ; START EARLIER & RUN LONGER (avoid crowded inner cities, serve them by slow moving , decentralized, frequently halting local services)
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> ==================================================================
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> Are we using the UNI GAUGE SYSTEM TO THE FULL EXTENT?
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> Why still the erstwhile metre gauge sections (now fully converted to BG ) are not fully assimilated with existing BG section ?
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> For example, what is the benefit of terminating most of the trains Chennai Central / Egmore.
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> Let atleast a few of the the Egmore trains ply up north to Vijayawada / Guntur / Nellore or west to AVADI / THIRUNINDRAVUR / ARAKONAM OR EVEN KATAPADI.
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> Like wise few trains via ARAKONAM proceed up to Perambur as usual then proceed either north to Vijayawada / Guntur / Nellore TOWARDS or south to Egmore / Tambaram / Chinglepet via BEACH STATION
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> Let CHENNAI CENTRAL TERMINUS be like BOMBAY CHRUCHGATE catering the city commuters
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> =====================================================================
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>
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> Why we are not using the newly converted BG lines fully?
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> What is the utility efficiency of Cuddalore – Vriddhachalam – Salem – Karur – dindigul railway assets?
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> Also Karaikal – Nagapattinam – Tiruvarur –Thanjavur _Trichy can be integrated with Erode segment more frequently.
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> Why we are not bye passing the crowded inner cities, even after completion of loop lines ?
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> Trains from SOUTH towards WEST via Bangalore need not touch inner cities : instead they may proceed via Krishna raja puram.
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> Like wise Bombay can be skipped by running the trains via Kalyan and Vapi towards Gujarat / Rajasthan / New Delhi and vice versa. People from the west and the north can get down at VAPI Tto board the western railway MEMUs or proceed up to KALYAN and hop in to the central railway
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> What are the benefits ? More space for local trains and less crowd at inner city railway stations.
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>
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> Imagine the freedom to operate numerous MEMU trains IN THE STRESSED RAILWAY LINE OF THE MUMBAI RAILWAY LINE.
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>
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> In the newspaper industry the newspaper buyers are providing only 20 – 40 % of cash flow.
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> Rest comes from advertisers.
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> Have we explored the possibilities of the advertisement revenue in the railway system?
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> Apart from the travelling public, their friends & relatives , associates, subordinates etc., who are coming to the railway premises for send off or receiving and the various service providers and ofcourse neighbourhood residing folks spend a lot of calm /crowd free / leisure time in railway stations. THIS IS A HUGE POPULATION TO IGNORE. This segment is economically active and a captive mass market for advertisers.
>
>
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> First let us begin with the name of the trains and railway stations.
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> For example, Tamilnadu Express can be renamed as, say XYZ Tamilnadu Express by getting sponsorship money from XYZ.
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> Likewise Station names can be prefixed with sponsors names / brands etc.
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> Here , the top brass must take the initiative.
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> ======================================================================
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>
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> In reserved coaches we can double the capacity by permitting two people to occupy one birth. ( A small change in Railways’s child fare rule could ensure the availability of 20 million additional confirmed berths or seats in a year for other passengers without the state-run transporter spending a single penny , while adding over Rs 525 crore annually to its coffers.
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> This could be made possible with the decision to charge full fare for children aged 5-12 if a separate seat or berth is sought. Till now, children in this age group were entitled to a separate seat or berth at half the fare.
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> Now, the half rate is still available, but without a seat or berth. In such cases, parents or the accompanying passenger will have to share their reserved space with the kids. Children under five years of age will continue to enjoy free ride (without a berth)
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>
>
>
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> A lot of people are travelling in groups. If two or more people reserve for their journey in a single reservation application, they can be given an option of sharing their seats / births. It will reduce the total cost of travelers, unauthorized travelers in reserved compartments , reduce waiting list and ofcourse increase the revenue for the railways.
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> ==========================================================================
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> Differential pricing in railway tickets. Week ends, holidays, festival travel can be prized significantly more and lean period journeys can be less expensive
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> All said and done , Railway development , capacity enhancement, productivity improvement etc. can happen only, if only if we accept , permit, facilitate, support and encourage investments and initiatives of every nature ( Private, Public , Co-Operatives, charities / TRUSTS, MLA / MP CONSTITUENCY DEVELOPMENT FUNDS, Joint ventures – Local and foreign ).
>
>
>
> Please look at the rapid and enormous developments happened in the Education, Telecom, Electronic media and road sector. Even with the notorious SCAMS & bad loans, unfinished projects, COSTLY TOLL RATES etc, still the developments in these sectors propels our GDP, INCREASE THE EMPLOYMENT & ECONOMIC OPPORTUNITIES, REDUCE THE chronic shortage Supremacy of the railway transportation should be a national objective and obsession instead of the present road based initiatives.
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>
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> Economically and environmentally speaking, the road transportation should supplement and complement, not substitute, compete or dominate the railways and waterways systems.
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>
>
> A minimum required number of passenger / goods-trains and ships / boats
> should have roll-on, roll-off facility for Lorries, buses and cars.
> Even two-wheelers and bi-cycles may be permitted in select passenger
> trains. This will reduce our total fuel consumption and will make a
> significant dent in the number of accidents happening in our highways
>
>
>
> ============================================================
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>
>
> ORIGINATE THE ERODE based PASSENGER TRAINS at SALEM / KARUR ;
>
> and
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> THE SALEM / KARUR based PASSENGER TRAINS at ERODE .
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> For example , two passenger trains commence their daily journey towards Coimbatore, by 7.00 am and 7.45 am and ends up by 7.00pm and 8.00pm respectively.
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> Couldn’t we start them (and ofcourse terminate them ) at SALEM / KARUR so that we can have about extra 120 Kilometres of usage of these two trains in the crowded corridor .
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> Let us do the same for THE SALEM / KARUR based PASSENGER TRAINS by originating and terminating at ERODE .
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>
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> Reduce the crowds at Tirupur, Erode railway stations by providing stoppages
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> at the Somanur, Perundurai, Sankari and Kodumudi stations
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>
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> The stretch between SALEM – ERODE -KARUR is being decongested by the recently
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> commissioned SALEM – KARUR railway line . For a good measure already the PALAKKAD – POLLACHI GAUGE CONVERSION IS completed
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>
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> And hopefully on completion of gauge conversion of PODHANUR –
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> POLLACHI section, PALAKKAD – ERODE – COIMBATORE SECTION will have some free space and time.
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> In effect, about 200 kilometres of railway track ( SALEM – ERODE – COIMABTORE – PALAKKAD electrified double track ) will have the traffic density eased.
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> Why should not we use this opportunity to reduce the crowds at Tirupur,
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> Erode railway stations by halting some more trains at the Somanur,
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> Perundurai, Sankari and Kodumudi stations
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> Think of the developments in the way side stations and subsequent revenues from them not only
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> from ticket sales but also from VENDOR FEES, PARKING FEES etc.
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>
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> And look at the huge benefits for the travelling public, less traffic in the road sector and the consequent
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> reduction in fossil fuel usage.
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> Hope and pray Salem Division rail authorities will oblige
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>
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> ==========================================================
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> > Effective and Efficient use of existing resources in the SALEM DIVISION OF THE RAILWAY SYSTEM .
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> ( WITHOUT A SINGLE PAISA INVESTMENT )
>
>
> 1. In the Railway Colony side of the ERODE Railway Station,
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> Permitting AUTO STANDS, BUS STOPS, MINI BUS TERMINUS, SHARE AUTO
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> STAND, Two Wheeler parkings, car parkings, and ATMs of BANKS will
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> reduce the congestion at the station front side and will generate
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> revenue for the railways without single paise investment.
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> Above all it will reduce the potential for accidents at station entry/exit.
>
>
> 2. The ERODE – COIMBATORE passenger train leaves ERODE BY
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> 7.00AM AND RETURNS BY 8,30 PM AFTER MAKING TWO SHUTTLE TRIPS. It can
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> very well be extended to SALEM by starting it at SALEM by 5.30 am
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> and terminating there by 10.00pm. It will help both Tirupur &
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> COIMBATORE bound PASSENGERS from SALEM onwards and vice versa.
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> Further it will make the small railway stations more active with
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> regular passengers (Industrial workers , students , and small scale
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> vendors )
>
>
>
> 3. Similarly, SALEM – YESHVANTPUR passenger train can very
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> well start at ERODE BY 4.30 AM and terminated by 11.00pm (It does
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> not involve any additional expenditure, no new space requirement ; 2
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> new passenger services for ERODE – SALEM SEGMENT)
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>
>
> 4. The poorly patronised ERODE – SALEM segment of ERODE – METTUR
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> DAM can be withdrawn and it can serve as METTUR DAM –SALEM
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> – VRIDDHACHALAM- CUDDALORE – METTUR DAM operation. (Puducherry,
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> Chidambaram passengers will also use it will be near to them:
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> ofcourse NEYVELI and Saint Ramalingasami’s Vadalore too ) Passengers
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> from Erode onwards can still use it by boarding the Erode –
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> Yeswantpur passenger train.
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>
>
>
> 5. The ERODE – TRICHY passenger train can easily be extended
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> to Tanjaviur by starting it at Erode an hour earlier. Further ,
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> by clubbing NAGAPATTINAM / NAGORE/ ANNAI VELANKANNI./ KARIKAL bound
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> services with this ERODE – TRICHY train we can integrate seamlessly
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> the WESTERN DISTRICTS WITH EASTERN DISTRICTS . Tourism will
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> flourish. All religious pilgrims {Hindus, Muslims, Christians ) will
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> bless the RAILWAYS with revenue.
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>
>
>
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> 6. Erode – Tirunelveli passenger service can be extended up to
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> Trichendur. ( Let us get the benefit of the UNIGAUGE SYSTEM: Let us
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> get rid of the shackles of long gone METRE GAUGE )
>
>
>
> FOR COIMBATORE;
>
>
> BYE-PASSING of the Coimbatore junction by long haul trains and the
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> railways proposal for DOUBLING THE IRUGUR – POTHANUR single
>
> railway line is generating strong opposition from a influential
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> section of people.
>
> With due respects to them , I would like to draw your attention to
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> the possible benefits of the above plans.
>
> Not long ago GANDHIPURAM is the only destination for all city buses,
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> mofussil buses, THIRUVALLVAR STATE EXPRESS BUSES and expensive but
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> comfortable OMNI buses. It was convenient to all stakeholders;
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> travelling public and their friends and relatives who are sending
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> them off / receiving them, both public and private bus operators and
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> their staff, Taxi / Auto drivers, traders, lodging and boarding
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> houses ; almost all.
>
>
>
> Then the Ukkadam, Singanallur, Mettupalayam mofussil bus stands and
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> the OMNI bus stand near GP / ELLEN HOSPITALS were came into service.
>
> Perhaps some more mofussil bus stands may come up on AVINASHI ROAD (
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> peelamedu / kalapatti / CODDISIA ) and SATHY ROAD ( ganapathy). All
>
> these new developments are not convenient to all sections of people.
>
> Still we accepted it because of the inevitability of the change
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> necessitated by ever increasing crowd.
>
>
>
> If we use same logic, then we will not only accept but whole
>
> heartedly welcome the BYE-PASSING of the Coimbatore junction by long
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> haul trains and the railways proposal for DOUBLING THE IRUGUR –
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> POTHANUR single railway line.
>
>
>
> No TIER II city is so endowed with a super most energy efficient form
>
> of Transport which is already available in our Coimbatore. An MRTS
>
> of ready availability !
>
> To realize this potential, We must get away from the mind set of
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> Gandhipuram, RS puram, Race course centered city growth. Let us think
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> of Avinashi to Mettupalayam, Sathy to Pollachi, and Palakadu to
>
> Somanur as part of Coimbatore Mega city
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> We must treat Pothanur Railway Junction as THE COIMBATORE DISTRICT
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> ( or) GREATER COIMBATORE DEVELOPMENT AUTHORITY JUNCTION for all the
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> Traffic passing through Coimbatore (Tirupur to Palakad and beyond
>
> Traffic). What is the point in routing these long haul trains
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> through Singanallur, peelamedu etc. to Coimbatore city junction
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> (without any stoppages enroute ) consuming fuel, space, time (of
>
> both passengers and railways ) without any tangible / intangible
>
> benefit to the common city folks, except the harassing / harassed
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> shopkeepers and the taxi / auto operators.
>
> Frankly speaking, What is our problem with the Pothanur Railway
>
> Junction? Lack of connectivity, is it not? It is not at all a
>
> problem : rather it is a golden opportunity to develop a new Bus
>
> terminus near Pothanur Junction with town buses, mini buses, share
>
> autos, ordinary autos, call taxies etc. for the hassle free travel of
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> railway passengers boarding / alighting at pothanur. In effect , we
>
> will have a satellite railway junction immediately without any mega
>
> investment.
>
>
> Thus freed railway line capacity between Irugur and Coimbatore
>
> Junction via Singanallur and Peelamedu can be used for city commuter
>
> traffic. THIS WILL BENEFIT ALL COIMBATOREANS (RESIDENTS AND VISITORS)
>
> It is not that we should abandon the Coimbatore junction. Rather, we
>
> must make it more passenger friendly and congestion free for
>
> Coimbatore city folks. Let us be very clear that all the trains
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> originating and terminating at Coimbatore junction should continue to
>
> do so. Further, all the Coimbatore bound trains must stop at Irugur,
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> Singanallur, Peelamedu, Coimbatore North and some more stations/halts
>
> to be created in proximity with Avinashi road (near CIT / CMC /
>
> CODDISIA / IT PARKS), Avaram palayam Road ( near Sri Ramakrishna
>
> Hospital), Sathy Road (near Aswin Hospitals / Textool) and a few
>
> more if demand is there. In effect, it will make a significant segment
>
> of the Coimbatore city roads free from traffic congestion. Especially,
>
> it will make the Coimbatore junction people friendly and crowds
>
> will be manageable. Also it will improve the connectivity and thereby
>
> increase the value of the residential / commercial / industrial
>
> properties along the IRUGUR-PEELAMEDU-North Coimbatore railway line.
>
> It will benefit not only the Coimbatore citizens but also the
>
> frequently visiting populations from Palladam, Tirupur, Erode and
>
> Salem, Palakadu, Mettupalayam etc, too. And some more COIMBATORE
>
> terminating trains (both from Tirupur and Palakkadu ) can be extended
>
> up to Mettupalayam so that we can reduce the enormous road traffic in
>
> the Mettupalayam High way.
By applying the same principle, we can
cater Polllachi – Mettupalayam section