Rail Neer, run by IRCTC, a subsidiary of the national transporter, has seven plants with a bottling capacity of six lakh litres per day.
NEW DELHI: Indian Railways plans to pump in Rs 1,000 crore to more than double the capacity of its bottled water brand Rail Neer to cater to rising demand across the country.
Rail Neer, run by the Indian Railway Catering and Tourism Corporation (IRCTC), a subsidiary of the national transporter, has seven plants with a bottling capacity of six lakh litres per day. The railways plans to set up 11 more bottling plants across the country on public-private partnership (PPP) basis, officials said.
“With these new plants, we will be able to fulfil about 85% of the current demand of 16 lakh litres a day,” said a senior railways ministry official, who did not wish to be identified. “The annual demand for bottled water in railway premises across the country is around `600 crore and growing more than 10% per annum.”
The official said that tenders for the proposed plants — in Kota, Visakhapatnam, Bhubaneswar, Ranchi, Nangal, Vijayawada, Guwahati, Bhopal, Ahmedabad, Jabalpur and Bhusawal — will be awarded by the end of this year. Indian Railways will provide land either on its own or through a memorandum of understanding with state governments, he said.
“Rail Neer is a highly profitable brand but there hasn’t been sufficient focus on it. The IRCTC management now thinks that the vertical has much more growth potential,” the official said.
The brand has a captive market at more than 7,000 railway stations and more than 1,000 trains, as railway vendors can sell bottled water of other brands only when Rail Neer is not available. In 2017-18, Rail Neer contributed about Rs 170 crore or 11% to IRCTC’s total revenue.
“We hope to increase the revenue from Rail Neer to Rs 500 crore in a year or so. It will also be able to make up for the loss of revenue that IRCTC is facing after service charges on tickets sold on the IRCTC website were waived to promote digital payments,” the official said.