REVIEW AND ANALYSIS OF GOODS ORIGINATING EARNING TO END OF JAN-06 FOR WCR

Prashant= Nikam, DyCAO/T/WCR

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Introduction: IR has recorded buoyant growt= h in terms of tonnage as well as Earnings. We have projected a surplus of Rs. 80= 00 crores in 2005-06. The effort= s put in by IR are laudable but we need to understand the factors which helped register such high growth on year on year basis. This study is an effort to analyze the trend of IR earnings by using the data of tonnage and Earnings = of WCR to end of January 2006 and comparing it with corresponding period in 2004-05.

Performance in respect of Goods traffic to end of Jan-06 as compared to the corresponding period of the previous financial year is s= hown in table below:-

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ITEM	UPTO JAN 05	UPTO JAN 06
*NO. OF WAGONS*= (4 wheeler UNITS)	720369	793032
*TONNAGE* (million Tonnes)	16.45	19.34
*FREIGHT* &nbs= p; ( IN CRORES )	815.77	1057.52
*AVERAGE LEAD*<= span style=3D'font-family:"Book Antiqua";mso-bidi-font-family:"Microsoft Sans = Serif"'> (IN KM)	718	729

The increase in the current year loading is on account of

actual increase in loading of number of wagons
Increase in carrying capacity of wagons due to increase in permissible CC.

The increase in Earnings is on account of

Increased tonnage (actual increase in no. of wagons as well as increase in permissible CC).
Commodity Reclassification.
Increase in lead of traffic.

The analysis of the originating Goods Earning = to end of Jan 06 of Rs. 1057.52 crores has been carried out to arrive at factor/cause wise increase in earnings.
Keeping the CC same as last year, the total tonnage to end of Jan 06 would be 18.11 mT instead of 19.34 mT. Additional tonnage of 1.23 mT= is on account of increase in permissible CC.

Thus, the incremental Earning on account of in= crease in no of wagons is for the incremental tonnage of 18.11- 16.45 mT i.e.= 1.66 mT. If all the other fa= ctors i.e. Commodity class and lead are same, then the increase in the earni= ngs due to increase in the no. of wagons is (815.77*18.11/16.45) -815.77= =3D Rs 82.3= 2 crores.

The increase in the earning due to increase in= the permissible CC i.e. for 1.23 mT is 815.77*1.23/16.45 =3D 60.99 crores.

The balance earnings of 98.44 crores are on account of Commodity reclassification and increase in lead. The earnin= gs on account of lead increase is 1057.52 – (1057.52*718/729)=3D 15.= 95 crores.

Thus, the increase in earnings due to Commodity reclassification is 1057.57 – (815.77+82.32+ 60.99+ 15.95) =3D 82.49 crores.

Earnings <= /p>

In crores of Rupees

To-end of Jan 05<= /span>

815.77

To-end of Jan 06<= /span>

1057.52

Incremental Increase due to increase in no of wagon

82.32

Incremental Increase due to increased CC

60.99

Incremental Increase due to increase in Lead

15.95

Incremental Increase due commodity reclassification

82.49

Incremental

total increase over last yea= r

241.75

There is a 29.67% Year on Year growth in Goods Originating Earnings. Not many businesses can boast such a robust growth. How did a govt run dept in the infrastructure sector achieve this? What were the contributing factors? Can= we replicate this performance again next year and in subsequent years to come?=

Factors that contributed to the Incremental WCR Goods Originating Earnings and the proportionate share is depicted in the pie chart

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Thus it can be seen that the actual increase in the loading of the wagons has contributed only 34.05% of the total incremental increase of goods earnings= for WCR. The biggest contributing factor is the change in commodity classificat= ion that makes 34.12%. The increase in permissible capacity contributed 25.22% = to the increase in earnings. The contributions to earnings are more on account= of policy directives than on the actual increase in the no. of wagons.

Conclusion: The initiatives taken by IR have g= iven very fruitful results. The increase in freight charges due to the change in= the Commodity classification has been absorbed by the market but further increa= se may turn out to be counter productive. There may not be much scope to incre= ase the permissible CC further without hindering safety. The policy directives = have steered our robust growth but we may not see the same percentage of growth = next year. The only way to generate this robust growth in subsequent years is by technological advancements by having greater payloads with lighter tare wei= ghts and greater axle loads.

Earnings <= /p>	In crores of Rupees
To-end of Jan 05<= /span>	815.77
To-end of Jan 06<= /span>	1057.52
Incremental Increase due to increase in no of wagon	82.32
Incremental Increase due to increased CC	60.99
Incremental Increase due to increase in Lead	15.95
Incremental Increase due commodity reclassification	82.49
Incremental total increase over last yea= r	241.75