The Ministry of Railways is looking for non-fare revenue generation options to improve its finances, and hopes that such options will help fetch about Rs 100 crore annually.
In a first, the Ministry has started a pilot project in which companies can put advertisements on moving trains. The move is likely to be a game changer for the cash-strapped Indian Railways.
Speaking to The Sunday Guardian, Ranjan Thakur, Executive Director of the Non Fare Revenue (NFR) Department, Ministry of Railways, said the tender for this pilot project has been awarded to “Media On Track” which will cover four trains: Mumbai-Ahmedabad Shatabdi Express, Mumbai-Ahmedabad Double Decker Express, New Delhi-Mumbai Rajdhani Express and August Kranti Rajdhani Express.
The company hopes to see the project operational by mid-December.
The company, Media On Track, did a successful trial run for Pepsico about three months ago by running a branded corporate train, “Kurkure Family Express”. Many top brands have already shown interest in the project and are looking at high-value expenditure.
The pilot project of four trains which start and end at prominent stations will have an average exposure of about 40 lakh passengers per month.
Each of the four trains passes through 10-15 railway stations including New Delhi and covering states like Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, and Uttar Pradesh.
According to Thakur, his department is looking for digital as well as non-digital segments to generate revenue. “In the digital segment, all passenger information systems at the railway stations will become digital, which will be used for advertisement. In the non-digital segment, entertainment content like movies will be provided to passengers on mobile or tablets without the use of teleconnectivity. We are working on long-term multiple fronts to generate revenue by tapping the much larger market,” he said.
“Media On Track” specialises in end-to-end advertising and branding solutions and has vast experience in conducting advertising, promotions, sampling and event-based activities in more than 100 trains.
In the financial year 2015-16, Indian Railways posted 4.6% growth. However, according to officials, there is a need to augment revenue. They said that Railway Minister Suresh Prabhu’s focus is on improving passenger amenities as well as increasing the revenue through goods trains.
“Freight constitutes about 36% of the total revenue share. The Ministry wants to increase it further. But this cannot happen only by increasing the fares. Therefore, the Minister is focusing on ‘non-fare box revenue’ through components like land monetisation and advertisement and not by increasing fare or tariff,” an official said. At present, this share is 3-4%, whereas the world average is 15-20%.