Under the PPP mode the Bank will bear entire funding for Automated Fare Collection (AFC) system for Metro
Elias George, managing director, KMRL and Shikha Sharma, MD and CEO of Axis Bank hands over the agreement for developing automated fare collection system for Metro, during a function in New Delhi on Wednesday. (Photo: DC)
KOCHI: The Kochi Metro Rail Limited has signed an agreement with Axis Bank for developing and running the Automated Fare Collection system (AFC) for the Metro. The bank will bear the entire funding required for the AFC through the Public-Private-Partnership initiative. The agreement was signed between KMRL managing director Elias George and Axis bank MD and CEO Shikha Sharma in the presence of Urban Development Minister Venkaiah Naidu in New Delhi on Wednesday. Apart from the AFC funding, the bank will also pay an additional royalty of Rs.209 crore over the next 10 years for the right to be KMRL’s partner in this endeavour. Through the deal, the bank will get the rights to issue co-branded cards, which will function as a multipurpose smart card as well as a ticket on the Kochi Metro system. The commuters can use the co-branded debit cards for travelling in various modes of transport and also for mercantile and internet transactions. It can be linked with any bank account of the user.
The advantages of the bank include a unique opportunity to popularise its card with a net addition of new clientele and the ‘first mover’ advantage. Apart from the funds saved, the KMRL will get recurring revenue from the deal as the Axis Bank will provide 0.2 per cent of its gross revenues from utilization of the debit card outside the Metro system, like various mercantile outlets and internet transactions over the next 10 years. The entire maintenance of the AFC system for 10 years will also be undertaken by the bank.
“The investment model has great advantages for the commutes as they will obtain a co-branded card, which can be used for other mercantile and internet transactions,” said Mr Elias George.
Mr Shikha Sharma said, “creating a payment infrastructure that supports cashless payments is an integral part of growth of smart cities in the country. Various initiatives of Axis Bank in toll and transit payments, including the association with KMRL, are steps to enable the vision,” he said.
( Source : deccan chronicle )
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