Promotions: Railway plans to sell space for profit
NEW DELHI: Don’t be surprised if you find Maruti Suzuki launching a new car at the busy New Delhi railway station or McDonald’s introducing a new fast-food menu on a train. Indian Railways is all set to come out with a policy for product launches and promotional events at railway stations and on trains to increase its revenue.
The non-fare revenue directorate of the railways is finalising the policy after detailed consultations with industry bodies, event-management companies and other experts.
According to the railways, the policy would be a win-win one for both parties. While the companies involved would get a captive audience for a longer duration, the public sector behemoth would be able to generate some extra revenue.
“As of now, the space at stations and on trains is used for advertising. What is now being explored is promotion of products, events like book and movie launches, gaming contests, unveiling new cars and bikes and other consumer-centric products,” a source in the railway ministry said.
The non-fare revenue directorate of the railways was formed in 2016 to focus on increasing revenue by means other than passenger fares, which have so far remained unchanged under the NDA regime.
“The railways has a huge potential as it runs over 13,000 trains per day and carries 23 million passengers, which is equivalent to the population of Australia. The companies will get an audience from almost all economic sections and for a longer duration, which gives them a better platform to advertise their products,” the source added.
The policy will initially look at tariff rates for space at stations in metro cities. Based on a third-party assessment, the railways is expected to earn Rs 16,000 crore a year in non-fare revenue by 2020-21. This would be through digital display systems, by offering space for ATMs, lending out parking space to private taxis and selling data like passenger travel details, train timings and PNR information.
In a study, RITES, a central enterprise, has found the railways has the potential to earn Rs 10,000 crore a year by selling advertising space in coaches, wagons and at stations, among others. Of the railways’ total revenue of Rs 1,65,068 crore in 2016-17, non-fare revenue accounted for 6.17 per cent, up from 3.62 per cent a year ago.