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Display units, ad-wrapped trains and more: Suresh Prabhu’s mega plans to boost revenue of Indian Railways

India TV Business Desk New Delhi 11 Aug 2016, 17:46:33 PM IST
India TV Business Desk

The Indian Railways is targeting to increase its non-fare revenues (NFR) to Rs 1,500 crore by the end of this fiscal from current Rs 300 crore per year. 

According to a report in The Economic Times, the newly constituted NFR directorate in the Ministry of Railways is working closely with private consultants like KPMG and Ernst & Young (EY) to monetise its assets. 

EY was appointed as a consultant to discover the advertising potential in trains and railway stations. The American multinational was asked to identify assets and formulate a pricing strategy for advertising across 7,000 railways stations in the country.

The firm has already started its exercise in this regard. And this is also the first time in the country that a large-scale project to identify and leverage pan-India advertising opportunities has been initiated. 

The most ambitious among all NFR projects is the proposed Rail Display Network (RDN). 

KPMG had in June submitted its report on RDN stating that Indian Railways can earn up to Rs 1,000 crore after the first year itself. However, the national transporter said that it aims to generate Rs 3,500 crore annually by end of the sixth year of its launch. 

Under this project, the Indian Railways will install 200,000 big digital multipurpose screens at 2,175 railway stations across the country. 

The display units will show rail-related information on half the screen and advertisements on the other half.  

Ranjan Thakur, executive director for NFR, told ET that the idea is to use eye-ball capture of the specific information seeker or waiting passenger to earn revenue from 50 per cent surface area.

“It will not only increase passenger satisfaction with timely information, it will be a significant source of revenue for railways. It will take OOH (Out-of-Home) advertising to a new level,” Thakur said.

The move comes after Railway Minister Suresh Prabhu had in the Union Rail Budget proposed to raise non-fare earnings. 

Railways had earlier this month awarded letters of invitation to four media groups -- MIC Electronics, Zee Media Corporation, Prabhatam Advertising Ltd and Direct News Pvt Ltd -- to conduct proof of concept at four selected stations -- Gwalior, Jaipur, Old Delhi and Gorakhpur. They have been given the deadline of October-end to have the project up and running.

Other measures to generate NFR include launching of ad-wrapped trains. It is seen as one of another major source of revenue. The Indian Railways has finalised that New Delhi-Mumbai Rajdhani Express and August Kranti Rajdhani will be the first to begin with. Other Mumbai-based trains would be next, followed by Chennai and Bengaluru-bound trains.

“Vinyl wrapping will also save the cost of painting of coaches and easy to maintain. The added advantage is it will catch eyeballs and industry will get a captive audience. We are trying to use all available railways resources to increase revenues. The idea is that railways income should not be solely dependent on freight and passenger fare,” a senior railway officer said.

Other initiatives like launching rail radio through private participation, website and app monetisation, and product displays are in the pipeline that are aimed at generating the non-fare revenues of the Indian Railways. 

Indian Railways runs 13000 trains per day on 63,000 kilometer of track and carries 23 million passengers, equivalent to population of Australia.