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INITIATIVES TO INCREASE NON-FARE REVENUE

In pursuant of the Budget announcement, for increasing the Non Fare Revenue, Ministry of Railways has announced new policies on various initiatives within the Non-Fare Revenue space. These policies will look into different areas ranging from advertising in trains and other areas such as bridges and other assets, setting up of ATMs at platforms to digital content for passengers.

Salient Features of the Policies:

The policies are based on feedback from the key players in the industry. Some of the key inputs considered in the policies are:

●       Long Term Contracts – 10 years

●       Single Point of Contact within Indian Railways – Non Fare Revenue Directorate

●       Credibility of Partner – including a technical and financial capability model

●       Transparent Process – E- Auction

●       Better media planning for Railway assets – Allowing zone/train/station wise packages

Key Policies:

1.                  Non-Fare Revenue Policy:

●       The objective of the policy is to allow Indian Railways to consider unsolicited proposals of earnings through Non-Fare sources

●       An NFR Evaluation Committee at Divisional/Zonal level shall examine need, operational and legal feasibility of the project and technical and financial capacity of the proponent

●       Agencies will selected on the basis of transparent tendering process via E-auction

●       Right of First Refusal to be offered to the proponent to match the highest bid

●       Indian Railways shall offer Non-Fare revenue contracts for a tenure of five years

●       The Non-Fare Revenue Policy shall enable private/public sector participation in conceptualization of an earning scheme

●       Entire exercise shall be cost-neutral to the Indian Railways

 

2.                  Out of Home Advertising Policy:

●       The objective of the policy is to allow monetisation of Railway Assets by means of advertising

●       Indian Railways had appointed RITES as consultant who appointed Ernst & Young as Professional Media Market Evaluation Agency (PMMEA)

●       In addition to the existing identified sites, Indian Railways shall allow advertising at areas hitherto unused, i.e., area along tracks, Road Over Bridges, Level Crossing Gates etc.

●       Static advertising will not be permitted in the station buildings, platforms, foot over bridges (leading to station area), etc., as it is covered in Rail Display Network

●       Indian Railways shall allow all forms of advertising, including digital to make the most use of advertising potential.

●       The advertising rights to be awarded for ten years

●       The advertising asset package sizes to be offered for bidding for zones/ clusters of zones, separately for Mumbai and Delhi area

●       The advertising assets to be offered via a transparent E-auction process

●       More than INR 6,000 Cr is expected to be generated by the end of the contract

 

3.                  Train Branding Policy:

●       The objective of this policy is to augment advertising revenue of Indian Railways by allowing internal and external advertisement

●       This policy will help in realizing economies of scale and give more marketing flexibility, thereby leading to higher realization of earnings for Indian Railways.

●       Indian Railways had appointed RITES as consultant who appointed Ernst & Young as Professional Media Market Evaluation Agency (PMMEA)

●       Advertisement through vinyl wrapping of train exterior (including windows of AC coaches) and inside the coaches shall be allowed

●       The tenure of the contract shall be 10 years.

●       The train branding packages sizes shall be offered for bidding in a phased manner (e.g.Rajdhani package, Shatabdi package etc.)

●       The advertising assets to be offered via a transparent E-auction process

●       More than INR 2,000 Cr is expected to be generated by the end of the contract

 

4.                  Content on Demand and Rail Radio Policy:

●       The objective of this policy is to allow monetization of entertainment based services on trains and stations

●       Entertainment services shall be provided through audio (P.A systems) and video systems (personal devices of the passengers)on trains and platforms

●       Provision of content such as movies, shows, educational programs shall be in both paid and unpaid formats

●       Indian Railways shall offer Content on Demand services contract for a tenure of ten years

●       The assets to be offered via a transparent E-auction process

●       More than INR 6,000 Cr is expected to be generated by the end of the contract

 

5.                  ATMs Policy:

●       The objective of this policy is to allow setting up ATMs at major stations of the Indian Railways

●       Indian Railways shall offer ATM on Stations contracts for a tenure of ten years

●       The location of the ATM shall be on end platforms or prominent space in the circulating area of the station

●       The assets to be offered via a transparent E-auction process

●       More than INR 2,500 Cr is expected to be generated by the end of the contract

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