New Delhi: Days after railway minister Suresh Prabhu announced to tap non-fare revenue sources, the public sector transporter on Tuesday appointed consultancy firm Ernst & Young (EY) to identify assets at 7,000 railway stations to assess their advertising potential.
The railways’ initial estimate has indicated that these assets could fetch revenue of about Rs 5,000 crore in the next few years.
“EY has been assigned the job for tapping the advertising potential of Indian Railways assets, including fleet of trains, spread in a wide network of about 7,000 railway stations across India,” the railways said in a statement.
The official release noted that the move is aimed at enhancing revenue through non-fare box route as emphasised by the railway minister in his budget speech.
“The exercise will help develop packages meeting specific demographic and geographic needs ensuring ease of business to advertisers and increased transparency and accountability,” it said.
Faced with limited scope to raise passenger fare the railway minister in his budget speech on February 25 said he would explore non-tariff revenue options to bolster the earning.
The railways hopes to more than double its non-fare revenue to 10-20 per cent of the gross earning in the next five years and has identified areas like station redevelopment, monetisation of land assets and advertising for this.
“Many of the world railway systems generate 10-20 per cent of their revenues from non-tariff sources. Over a period of the next 5 years we will strive to reach this world average by monetising assets and undertaking other revenue yielding activities,” the minister had said in his speech in Lok Sabha.
Acting on the programme, the railway is planning to engage with leading advertisers soon after EY submits its report to prop up its advertising revenue.
Although railways has in the past used its assets to earn additional revenue, it is for the first time that an asset leveraging programme of this scale has been initiated. It has so far used only train wraps and display spaces at stations for advertising revenue.
“With a large expanse of assets and high measurability of its reach, the railways’ assets will be beneficial to local and national clients alike,” said EY India director Bharat Rajamani.
