* Electricity bill paid by IR in 2014-15 was Rs.11000 crores and in 2015-16 was only Rs. 9000 crores.
* As per normal 7% escalation of electricity cost the bill should have been 11000*1.07=11770 crores
* Since about 1500 km electric lines were energised, i.e. growth of about 6-7%, the traffic under electric traction (or electric consumption) too should have increased by a very conservative figure of about 5%. Applying this factor, the electricity bill of 2015-16 should have been 11770x1.05= 12360 crores.
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The effective saving due to innovative cheaper electricity procurement for yr 2015-16 is 12360-9000=3360 crores.
* Best thing is that this benefit is recurring benefit which will increase every year as electric consumption is poised to go much higher as more and more routes get electrified.
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* This is a great achievement. Such kind of innovation is required in procurement, raising cheaper loans, & better resource/asset utilisation, if IR has to come out of financial troubles.
* Asset utilisation measures urgently required:
(1) Rationalisation of trains so that almost all trains run with full length (26 ICF coaches) with maximum occupancy.
(2) Rationalisation of fares esp. of loss making classes like season ticket & non ac class fares.
(3) Review of concessions policy so that concessions are streamlined/ properly targeted.
(4) Emphasis to have more non fare revenues through commercial exploitation of spare land, stations, trains etc.
(5) Review of under construction projects with very low rate of returns.
* The steps like flexifare which has potential to give additional revenue of 500 crores in short term are counter productive in long run.