Vendors say lack of advertisers makes project commercially unviable; railway officials think CSR won’t provide accountability!
MUMBAI: The Railways’ plan to install bottle-crushing machines at stations in the Mumbai suburban network has hit a roadblock, with both Central Railway (CR) and Western Railway (WR) failing to receive any bids for the work.
The tenders were for 35 and 25 machines for the Mumbai divisions of CR and WR, respectively.
Sources said the bone of contention between the Railways and potential bidders is whether the project should be a commercial activity or a CSR initiative. Most senior railway officials prefer a commercial project since it provides more accountability and responsibility. “The scrap plastic generated has commercial value and the contractor can also earn advertising revenue from the space on the bottle-crushing machines. If it is a commercial activity, the agency is also bound by a contract, which is not necessarily the case with a CSR initiative,” a senior railway official said.
Potential bidders, however, have said running the machines as a commercial activity was not viable.
Earlier this year, when WR did not get any response for its initial tenders to install the machines, the policy for the bottle crushers was changed by the Ministry of Railways and the Railway Board after taking into account the grievances of the vendors. At the time, the vendors had issues with the one-year contract period and the fact that advertising was not allowed.
The Mumbai divisions of CR and WR, along with prospective bidders, had approached the Railway Board and the ministry to change the policy. The new policy, which came into force in June, allows vendors to earn from advertising revenue and sets the period of contract as five years.
However, a potential bidder, who wished to remain anonymous, said that even under these conditions, executing the project as a commercial activity was not viable because advertisers did not express any interest in leasing space on a bottle-crushing machine.
“The project cannot be sustainable solely on the value of scrap plastic, as it includes operational costs for electricity and deployment of manpower,” the potential bidder said.
Sources said that on Tuesday, a joint meeting was conducted with potential bidders and advertisers and senior divisional officers from CR and WR. The main issue raised by the bidders was the reserve price, which they said was still high, given that advertising revenue was not an option. Advertisers, sources said, asked for the space to be increased, which would mean redesigning the machine. The prospective bidder said, “We are not in the business of advertising and the Railways should stop treating this as a profit-making activity.”
Senior railway officials also said that the vendors and advertisers wanted to be consulted on the proposed location of the machines at various stations.
Fresh tenders likely
Railway officials said they will review tender conditions and will most likely float fresh tenders soon.
However, the potential bidder said that executing this project under CSR is probably the best course of action since the Railways don’t have to pay and have to only provide space.
The Indian Railway Catering Tourism Corporation has installed four bottle crushing machines, two at Chhatrapati Shivaji Maharaj Terminus and one each at Churchgate and Mumbai Central stations, on a trial basis under the CSR model. But railway officials said the machines were hardly being used as they are not manned.