New Delhi: The Indian Railways plans to integrate its entire freight, passenger and administrative operations across the country under an Enterprise Resource Planning (ERP) software which when awarded, claims a railway ministry official, would be among the largest such domestic deals.
According to Sudhir Kumar, officer on special duty to the railway minister, the ministry plans to invite bids for the contract by September. However, he refused to specify the value of the contract, only saying that it would be “in hundreds of crores.”
But the question is whether such a system is required. Officials at Rail Bhavan who have experience in handling information technology operations say that the new system will have to be necessarily compatible with the Freight Operations Information System (FOIS), an online platform created two years ago at a cost of around Rs400 crore.
The railways has a network of 9,000 passenger and 5,000 freight trains, and transports close to six billion passengers and around 700 million tonnes of freight every year. It has a staff strength of around 1.4 million and 1.1 million pensioners, making it the largest employer in the country.
Railway minister Lalu Prasad Yadav said that the new software would help the railways plan its salary and pension allocations. Apart from this, the software is also expected to provide platforms for all important activities such as booking of freight and ticket sales.
As per the plan, an online exchange would also be set up for booking freight. Freight customers will find it easier to book wagons and check for availability by using a website that would be hosted for the purpose by the ministry.
By streamlining booking of wagons, the railways hopes to profit out of its recent initiatives to attract more freight customers by giving heavy discounts on return trips.
“We earn $10 billion (Rs41,000 crore) on one-way booking alone. Even if we charge only 25% of the regular freight charges from customers on the return journey, we will earn $2.5 billion dollars more.”
Kumar,says the railways had spent around Rs1,000 crore during the last Five-Year Plan on information technology. But the ministry now plans to spend six times that amount on the current plan.
When contacted, a senior railway official, who did not wish to be identified, said that the new ERP has to be in line with the systems such as FOIS. “If the vendor decides to build a totally new system, then a lot of time, effort and money invested by the railways would have gone waste.”
According to another official, the FOIS system already has features that allow for online booking and collection of payments. He too echoed the need for the new system to be integrated with FOIS.
“Traditionally, such a contract would set the stage for a fight between Oracle and SAP, but we may also see system integrators such as TCS, that have done similar operations in the past, make a bid for it,” says Alok Shende, head of technology related practice at consutling firm Frost & Sullivan India.