Rail­ways’ non-fare ten­ders de­rail

Zones asked to con­duct bid­ding

Business Standard - - ECONOMY & FINANCE - SHINE JA­COB

The In­dian Rail­ways’ plans to gen­er­ate ~390 bil­lion from non-fare sources over 10 years have be­come doubt­ful, with the na­tional trans­porter with­draw­ing ten­ders for out-of-home (OOH) ad­ver­tise­ments and ad­ver­tise­ments on trains ow­ing to a “low in­dus­try re­sponse” and “tech­ni­cal rea­sons”.

OOH in­cluded sta­tion ar­eas, over­bridges, under-bridges, level-cross­ing gates, rail­way colonies, work­shops, pro­duc­tion units, and rail­way land along tracks. These ini­tia­tives would have added at least ~82.5 bil­lion to its rev­enues over 10 years.

Ac­cord­ing to sources close to the de­vel­op­ment, the can­cel­la­tion of the ten­ders came when the Rail­way Board with­drew the pow­ers of award­ing con­tracts from rail­way sub­sidiary RITES and gave them to rail­ways zones.

With this, the rail­ways will go back to its prac­tice of invit­ing ten­ders for “sundry” ini­tia­tives through the zonal rail­ways. “This has led to stag­na­tion in poli­cies for at least two years, re­sult­ing in huge rev­enue losses to the rail­ways. It may take an­other one year for rev­enues to come in if the zones start is­su­ing ten­ders,” said an in­dus­try source.

Ac­cord­ing to the data avail­able, can­celling ten­ders for ad­ver­tise­ments on trains and OOH and set­ting up au­to­mated teller ma­chines in sta­tions under the Cen­tral Rail­ways led to a huge short­fall in ex­pected rev­enues from ad­ver­tise­ments, pub­lic­ity and park­ing earn­ings of the rail­ways in 2017-18.

As com­pared to a re­vised tar­get of ~8.5 bil­lion (from non-fare sources) for the fi­nan­cial year, the rail­ways could man­age about ~1.5 bil­lion up to Jan­uary 2018. The rea­son for this is the de­lay in fi­nal­is­ing ten­ders for con­tent on de­mand and the Rail Dis­play Net­work (RDN) by RailTel, an­other sub­sidiary of the rail­ways.

The RDN was con­sid­ered one of the most lu­cra­tive ini­tia­tives of the rail­ways in re­cent times and it would have gen­er­ated ~150 bil­lion over 10 years, while con­tent on de­mand would have added an­other ~60 bil­lion.

“Even though 17 no­tices invit­ing ten­ders were in­vited (under this), the in­dus­try re­sponse was neg­li­gi­ble. Fol­low­ing this, on March 22 this year, the bid process man­age­ment was with­drawn from RITES and given to the zones,” said a source close to the de­vel­op­ment.

Sim­i­larly, zones got the job of ad­ver­tis­ing man­age­ment on mo­bile as­sets on Fe­bru­ary 16. This in­cludes ad­ver­tise­ments in trains and also on them.

With this, the pol­icy of cen­tral­is­ing non-fare ini­tia­tives taken by Suresh Prabhu when he was rail­ways min­is­ter has been rolled back. As a step to­wards this, a sep­a­rate direc­torate for non-fare rev­enues had been set up in May 2016. In or­der to stream­line ad­ver­tis­ing-re­lated as­pects of the rail­ways, this direc­torate later be­came part of the tourism and cater­ing di­vi­sions af­ter Piyush Goyal took charge of the min­istry.

In 2018-19, the rail­ways is tar­get­ing rev­enues of ~12 bil­lion from ad­ver­tis­ing. This is based on ten­ders to be is­sued for con­tent on de­mand, the RDN and ap­pli­ca­tion-based cab ser­vices at rail­way sta­tions.

Ap­pli­ca­tion-based cab ser­vices are likely to bring in ~30 bil­lion over the next 10 years. Uber, Ola, Baxi, Shuttl, Meru, and BlaBlaCar are ex­pected to par­tic­i­pate in them.

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