Long-distance train passengers can expect better food if the railway board succeeds in revamping its catering policy. But the change will have to be nod at the highest level, as it will entail loss of revenue but not quality.

The zonal railways charge successful contractors 12% of the bid amount as licence fee. The contract is awarded for five years. If the estimated earning is INR 60 crore, the reserve price or licence fee is set as INR 7 crore for the bids. But bidders quote 40-50% above the amount to get contracts.

"The revenue sharing model is at the heart of the problem of poor food services. We may opt for a fixed licence fee and select contractors on technical parameters, which will include food quality and quantity, service, infrastructure, manpower and expertise," said a senior railway official.

Since bidders quote much above the reserve price, contractors start cutting corners by serving inferior food or offering less than what is prescribed. Passengers are also often overcharged.

"Our focus will stay on quality and a panel of contractors will be shortlisted. The contract will be awarded to one of those shortlisted," said the official.

Sources said some contractors from across the country recently told Union railway minister Sadanand Gowda that the revenue sharing model should be discarded.

"The railway board earns INR 400 crore in licence fees from contractors, which is peanuts. For this, we have to face embarrassment because of poor quality catering. Moreover, a lot time is wasted if an offended passenger approaches the court," another official said.

The official said there was a provision to fine contractors but they have emerged powerful due to shortcomings in the system.

He said, "Contractors refuse to pay fines, claiming the complaints are not genuine. We can only exert pressure till a certain point, or the contractors threaten to exit the contracts."

Officials are afraid of a situation where food cannot be served, as it will anger passengers. Appointing a new contractor is time-consuming as it involves inviting fresh bids. In the proposed system, erring contractors can be fired at short notice and another can step in from the panel.