Losing heavily on ferrying passengers, Indian Railways has set its sights on non-fare revenue sources including out-of-home (OOH) advertising, ATM rights to banks, app-based cab services and leasing out land along tracks for farming.
Seeking to tap these alternate sources of revenue, the state-run transporter plans to generate an incremental cash of Rs 34,350 crore in 10 years. The attempt will help it make up for part of the losses on account of subsidised fares that costs it dearly, about Rs 35,000 crore in FY16.
“The non-fare revenue generated by Indian Railways is much below its potential. It’s only 5 per cent compared with 20 per cent by some of the foreign railway systems. We are working on several innovative methods to optimise the income from areas, which have recently emerged as big revenue churner,” an official said.
The transporter has started work on monetising land, building and soft assets like data on passenger and commodity movement. It is moving to tender out space for putting up ATMs across its network in one single tender, develop integrated mobile app and providing on-demand content, both free as well as paid, through personal devices.
As part of its land monetisation exercise, the railways would lease out the land along tracks for horticulture and tree plantation. Besides adding to its revenue, the move will create jobs and augment food security.
With regards to monetising soft assets, plans are afoot to partner with private firms for generating revenue by sharing data. The integrated mobile app alone will fetch Rs 300 crore annually.
Further, the transporter will offer ATM contracts for 10 years to leading banks. It has appointed the Central Railway as the nodal authority to handle the tendering process. This will ensure ease-of-doing business for the stakeholders and eliminate repetitive tender process by zonal railways. Over Rs 1,500 crore of incremental income is anticipated from this long-term contract.
“We expect SBI to be the main bidder for the project. As many as 2,200 ATMs are proposed to be installed across various categories of stations,” the official said.
Another avenue for generating income is providing content-on-demand for entertainment. The railways hope a 10-year contract for such services could bring Rs 6,000 crore. The railways ministry sources said RailTel has been appointed for the task and service will be launched in steps in popular trains by March 2018.
The app-based cab service, which will be provided by IRCTC, an arm of Indian Railways for online ticketing and catering services, is expected to generate Rs 200 crore annually. The projected revenue from the mobile-based cab service is much more than the present revenue of Rs 125 crore from parking across stations.
nirbhaykumar@mydigitalfc.com
