New Delhi: Indian Railways has decided to award contracts for three to five years for non-fare revenue projects such as advertising on trains, railway bridges and other assets, setting up of ATMs on platforms and offering digital content to passengers. Non-fare revenue is money earned by railways from sources other than passenger fares.
Indian Railways expects to earn around ₹ 15,000 crore in the next 10 years using the non-fare revenue model.
The licences under this model shall be awarded for a minimum of three years and maximum of five years with an extension of up to one year in special cases, the railways said in a circular issued on Wednesday.
Earlier, the railways had offered the same project for five to 10 years but this had drawn a lukewarm response.
The non-fare revenue policy allows the railways to consider unsolicited proposals for earning through non-fare sources with several flexible terms and conditions. Under the policy, advertising will be allowed in areas that have so far been unused such as along tracks, on road, over bridges, and level crossing gates. Indian Railways has a target of raising ₹ 1,200 crore through non-fare revenue this fiscal.
The non-fare revenue policy of Indian Railways was unveiled by then railway minister Suresh Prabhu in January 2017 but remained a non-starter till date. Early this fiscal, the railways decided to decentralize the work of earning non-fare revenue by giving all powers to the general managers of the 16 zones in which Indian Railways is divided. The scheme was renamed “New Innovative Non-Fare Revenue Ideas Scheme" and was asked to be implemented in May.
Under the scheme, the railways is going to offer its various assets for advertisements. These will include advertisements in the passenger reservation system (PRS) ticket, robotic massage chair with foot massager and body mass index (BMI) machines, BMI kiosks at various stations/workshops, LED digital walls/ screens, reverse osmosis (RO) water purification equipment in train coaches, and micro smart stay lounges.
“We have decided that the licence fee for the first three years will remain the same and after the end of three years it will escalate by 10% each year giving the contractor a choice of whether or not to continue. The decision was taken after consultation with several advertising firms," a senior railway official said on condition of anonymity.
On the revenue model of content on demand, the official said, “Zonal railways shall adopt a hybrid revenue share model under which the licensee/ service provider shall quote a fixed minimum guarantee and share a percentage of the revenue over the benchmarked FMG." General managers have been given full power for the implementation of non-fare revenue policy.
Indian Railways expects to earn around ₹ 15,000 crore in the next 10 years using its asset monetiZation model or non-fare revenue model, which includes display of advertisement in passenger reservation system (PRS) ticket, digital wall/screens, micro smart stay lounge, three dimensional (3D) Product Displays for products and Services, exhibition at stations, jingles at various stations, publicity rights on glass façade at Railway Station and dual display infotainment system.