Prabhu’s revenue ideas to be tweaked by Goyal – Revised policy could increase contract tenure to 20 years

NEW DELHI: The plan chalked out by Suresh Prabhu as Railway Minister to garner Rs 15,000 crore as revenues over the next 10 years through a rail display network (RDN), enabling real-time information to passengers, has been delayed with the new minister, Piyush Goyal, planning to change the terms of the contract.

This comes even as bids under the earlier policy were to open this month.

According to officials close to the development, Goyal wants to increase the contract period under a revised policy from 10 years to 20 years.

This project was to create one of the largest connected digital networks of the world. In addition to this, the Railways is planning to tweak the norms of other non-fare revenue initiatives taken by Prabhu, such as Content on Demand (COD) and Out of Home (OOH) advertising. This would imply that non-fare initiatives taken during Prabhu’s tenure early this year would be reworked.

Goyal has reworked Prabhu’s Rs 1-lakh-crore station redevelopment plan and Rs 5,000-crore “One-ICT” project.

The decision to change RDN contract terms was taken after a meeting with the stakeholders and railways subsidiary RailTel last week.

The bids were supposed to be opened on October 20, officials said. Following the meeting, RailTel asked the railways to change the contract period for a high-tech centralised network of 200,000 screens across 2,000 stations.

Apart from providing real time information to passengers, the aim of the system is to unlock advertising potential.

“The bids for RDN and COD were supposed to be opened last week. But the change in policy will further delay the process by six to eight months,” said a person close to the development. This may lead to a fall in the expected revenues during the current financial year.

Followed by the initiatives taken by Prabhu, the railways’ non-fare revenue had increased by 72 per cent from Rs 5,928 crore in 2015-16 to Rs 10,181 crore in 2016-17. This was expected to increase by another Rs 5,000 crore in this fiscal year.

“The average annual income for the railways is expected to be approximately Rs 1,000 crore,” the official added. According to the plan, there would be centralised control of about 200,000 Digital Display Screens (LED pixel screens and LCD screens) of different types, sizes and shapes.

The project is estimated to cost around Rs 2,000 crore. The bidding process kicked off in April this year, with RailTel being the nodal agency.

According to industry experts, the logic of changing norms was not expected as the railways initiated the bidding process after a detailed study by KPMG in this regard.

Moreover, four media groups — MIC Electronics, Zee Media Corporation, Prabhatam Advertising Ltd, and Direct News Ltd — had conducted a trial of the concept at stations such as Gwalior, Jaipur, Old Delhi, and Gorakhpur. “Demand was there, unlike the station redevelopment plan. A majority of display network techniques get outdated after five to six years, hence 20 years may be a long period,” said an industry expert.

On the other hand, COD services were for providing video content on 1,300 premium trains in the initial phase.

The railways has estimated clocking Rs 34,350 crore from non-fare revenue. This includes Rs 14,250 crore from RDN, Rs 6,000 crore from COD and rail radio, Rs 3,750 crore from integrated mobile applications for advertising, cab services, etc, and Rs 3,750 crore for the Out of Home initiative.