Railcar named Chariot runs out of steam

Hauled out

The State’s first luxury train, Golden Chariot, has run aground.

The Karnataka State Tourism Development Corporation (KSTDC), which runs the luxury train, will have to pay Rs 28 lakh as haulage charge or operating charge for every trip it undertakes to Indian Railways starting this month. Ironically, the average revenue for KSTDC for each trip is around Rs 30 lakh.

Ever since the Chariot started chugging along in February 2008, KSTDC has been paying Rs 18 lakh haulage charge to the Railways. In fact, the Railways had imposed Rs 24 lakh as haulage charge, but KSTDC managed to convince the Railways to bring it down to Rs 18 lakh.

“Now, the Railways has hiked the charge to Rs 28 lakh with effect from this month. And this time, the Railways is adamant on collecting it,” sources said.

The Railways has imposed haulage charge on all luxury trains in the country, including Rajasthan’s Palace on Wheels and Maharashtra’s Deccan Odyssey, to meet additional cost it was incurring for developing infrastructure for running them. The haulage charge involves variables such as number of coaches, total distance, fuel cost, assets used and others expenditure, sources said.

Sharing refused
The Golden Chariot project was implemented as a joint venture between the State Government and the Railways on a 55:45 cost sharing ratio. However, the Railways refused to share the revenue on the same ratio and instead imposed the haulage charge.

Sources said, in the MoU signed for the project in 2002, the Railways agreed to a revenue sharing model for the initial five years.

This was done as both parties agreed that the train will not be a profitable venture for the first five years.

But when the Chariot took off in 2008, it insisted on a haulage charge. KSTDC agreed to pay Rs 18 lakh, officials explained. The Chariot has 88 seats and it covers 1,600 kms on a seven-day-seven-night journey. Each ticket costs Rs 88,000.

Loss will be huge
“The present average occupancy of the Chariot is 34 per cent, and KSTDC is getting around Rs 30 lakh on every trip. The hike in haulage charge has come a major jolt. If other operations and maintenance costs are taken into account, KSTDC will end up with a huge loss,” the sources said.

Besides, the sluggish tourism sector has also badly affected the Chariot’s prospects. Occupancy dropped from an initial 40 to 45 per cent to 30 to 35 per cent now. In an effort to attract domestic tourists, KSTDC even slashed ticket fare from Rs 1.04 lakh to Rs 88,000 a few months ago. There were instances when running of the Chariot was cancelled as there were no takers for the luxury ride.

In an effort to save the Golden chariot, Tourism Minister Janardhana Reddy on Saturday urged Union Minister of State for Railways Muniyappa to honour the original MoU on revenue sharing model.