Railways may allow Corporate Houses brand Trains & Stations

rail-budget-2015-corporate-houses-may-now-brand-trains-and-stationsनई दिल्ली New Delhi: This year, you may end up boarding Amul Shatabdi to Flipkart Chandigarh if the railway ministry accepts the recommendation of a committee set up to improve the finances of Indian Railways.

Headed by former financial services secretary DK Mittal, the committee has recommended that a policy framework should be drawn to allow corporate houses brand trains and stations such as Amul Shatabdi/Railway Station. “We are looking at the recommendations and some of them may form a part of the rail budget,” said a senior government official aware of the deliberations.

The committee in its report has said railways can raise around Rs 8,000 crore through such a corporate branding exercise and other initiatives, which it thinks could be a low-hanging fruit.

“The action plan has been prepared to improve finances of the railways in the shortest possible time,” said Mittal, refusing to comment on the possible suggestions. The committee in its report had said a time bound plan should be in place and top 200 stations should be identified for this purpose.

At present, Indian Railways is grappling with its worst-ever financial crisis as its operating ratio has touched 95%, and there’s no cash to clear the pending projects worth Rs 2.5 lakh crore. The committee was set up by railway minister Suresh Prabhu to suggest ways and means to raise the revenue.

“For railways, 10-20% revenues from non-fare sources would be a good target. Against this potential, railways earns less than 3% non-fare revenues. At 10% level, IR can expect additional revenue of around Rs 15,000 crore per annum, with nil or minimal capital outlay,” a senior railway board official told on condition of anonymity.

Non-fare revenue is a significant source of income for railway systems across the world. The range of this revenue is widespread with some international railways earning more than 35% of their revenues from non-fare sources.

Non-fare revenue is a significant source of income for railway systems across the world. The range of this revenue is widespread with some international railways earning more than 35% of their revenues from non-fare sources.

Railways has a very large asset base, which can be leveraged for monetisation and revenue generation, said the above quoted official. Operating assets of railways which could be further monetised through advertising include about 60,000 coaches and 2.5 lakh wagons and around 10,000 locomotives, above 7,000 stations used by over 840 crore passengers annually.

Non-operating assets include about 3.9 Lakh hectares of land that is currently under use and over 43,000 hectares of land at various locations that are identified as not needed for operational use and land in numerous railway residential quarters where there is scope for re-development.

The committee has also suggested that lands next to tracks which could be leased out for plantation for a period of six years needs to be identified. Revenue can also be earned by leasing land and platform roofs for installation of solar panels. More land will also be identified for real estate development through which railways can earn around Rs 6,000 crore annually.

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