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COMMON COMMERCIAL AND ACCOUNTING PROCEDURES FOR TRANS ASIAN RAILWAY NETWORK

COMMON COMMERCIAL AND ACCOUNTING PROCEDURES FOR TRANS ASIAN RAILWAY NETWORK. A project study on. RSC Vadodara dated 10 th August 2006.

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COMMON COMMERCIAL AND ACCOUNTING PROCEDURES FOR TRANS ASIAN RAILWAY NETWORK

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  1. COMMON COMMERCIAL AND ACCOUNTING PROCEDURES FOR TRANS ASIAN RAILWAY NETWORK A project study on RSC Vadodara dated 10th August 2006

  2. GROUP 3·Mr. Md Quamrul Ahsan (Bangladesh)·Mr. T.K. Das (India)·Mr. Ahmad Shuhaili Yang Razali (Malaysia)·Mr. Prih Galih (Indonesia) ·Mr. Bounchanh Saybounheuang (Lao PDR) • Faculty • Mrs. Nirupma Kumar, Professor (F & I) • Mr. Praveen Parmar, Professor (CM)

  3. Issues : Agency/Authority in charge Type of traffic handled Facilities to be Offered Commercial Requirement Tariff Structure Documentation Accounting system Problems anticipated

  4. CHAIRMAN Director Operations Director Finance Director Administration Director Commercial Director Rolling Stock Director Infrastructure Agency / Authority in Charge Managing Director

  5. Traffic to be handled • Primarily Freight traffic in ISO Container • Future : Passenger traffic ( Pilgrim & Tourist ) • Future : Freight traffic in non-ISO Containers and Wagons

  6. Facilities to be Offered • Uniform and common single tariff • Door to door multi-modal transport • International liability coverage • Land feeder for port to port service • Online documentation • Online Track & Trace System • e-communication between ICDs

  7. YEAR Potential Market Volume (TEUs) 2006 2009 2012 2015 ASEAN Countries 81600 111700 152700 208800 Indochina Countries 5600 7700 10400 14200 Myanmar 2000 2700 Total 87200 119400 165100 225700 TAR Market Share 80% 80% 80% 80% TAR Container Volume (TEUs) 69800 95800 132100 180600 MARKET POTENTIAL

  8. COMMERCIAL REQUIREMENTS In making decisions about route and mode choices, customers will be guided by: • Overall costs • Transit time • Consignment security • Reliability of service • Comprehensiveness of service • Availability of real time information

  9. Tariff setting principle • The prime difficulty is that there is no through international rail tariffs in existence • But there exists a few tariff setting mechanisms such as COTIF with which a few railways operate • These could provide a tariff structure which may be applied throughout the TAR network

  10. Tariff setting principle (contd.) Overall tariff structure would cover: • Cost of infrastructure & operational expanses • Average tariff rate of different TAR countries • Insurance • Other service charges • A margin of profit to generate surplus to meet development needs

  11. Tariff setting principle (contd.) Finally the tariff structure would result in : • a single through tariff between origin and destination • a mechanism for the equitable distribution of revenue (a distribution based on the respective shares of the total haul distance) • Unified tariff rates focused on customer oriented pricing and marketplace realities.

  12. Documentation • Declaration of commodity by the consignor • Single document will be issued to the customer from origin to destination • All the intermediate customs will view the documentation through EDI • The TAR Authority will take Through Liability from origin to destination

  13. Common Accounting Procedures • Single and common accounting system to be followed throughout TAR Network • The system will be EDI based following international norms • Creation of TAR Fund to cater revenue & expenses on proportion sharing basis • Sharing of earnings to the member countries through TAR fund • A portion of the member country income will be retained in the TAR fund

  14. The Accounting Heads • Gross Income • Revenue Expenditure • Capital Expenditure • Operating Expenditure • Depreciation Reserve

  15. The Accounting Heads (Contd.) • Gross income will be from the carrying of containers and other goods (if any) • Revenue expenditure will be the salary and wages of the staff etc. • Capital expenditure will be provided to member countries in establishment of missing links, upgrading of the system

  16. The Accounting Heads (Contd.) • Operating expenditure will include cost of hauling and maintenance of rolling stock • Depreciation reserve fund will be created to arrange for replacement for existing assets

  17. Problems • Missing link • Different Gauge & type of rolling stock • Different traction • Border & Custom delays • Speed & Axle load difference

  18. THANK YOU

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