Railways eye ppp for swanky stations

The humble railway stations of India, most unassuming and reflective of their grey colonial roots, are set for a scrub. The state-run Indian Railways will partner private companies to co-brand select stations, to start with, under a new “adopt-a-station” policy.

It will facilitate passengers to view their favourite programmes on Rail TV — an infotainment channel to be on offer in all key trains as well as stations. It will also offer a rail magazine for the avid reader on the lines of in-flight magazines and the icing on the cake will be a railway royalty card for frequent travellers on suburban trains — similar to frequent flier programme — to avail of special discounts at station outlets, or get bargain tickets.

These are part of Railway Minister Mamata Banerjee’s blueprint aimed at increasing non-core revenues of one of the world’s oldest and largest rail networks, through a public-private partnership (PPP). Its target: a whopping 10-fold increase in advertising revenues to over Rs 1,000 crore for 2010-11, from an estimated Rs 125 crore this financial year. A part of the new strategy is expected to be announced in the Railway Budget. A special department to focus on generating the non-core revenue is also being created.

The Railways have over 7,500 stations across the country. As many as 11,000 passenger trains and over 6,000 goods trains crisscross the nation every day, which sources say, “can be leveraged well for their advertising potential”. The non-core revenues constitute 3 per cent of Railways’ total projected revenue of Rs 90,626 crore for 2009-10. The advertising revenue target for this year was pegged at Rs 360 crore.

According to internal studies, the Railways have utilised only 8 per cent of their potential from non-core businesses. In contrast, the Delhi airport alone expects to earn around Rs 100 crore annually from advertising. Banerjee, who has appointed ad man Suhel Seth to put together a plan, has started work on centralising information on inventory (space) that the Railways have across the country under member (traffic). Currently, advertising space is sold in an ad hoc manner by station managers. There are five members — traffic, engineering, electrical, staff and mechanical — under the Railway chairman to look after the entire operations.

Once ready, the Railways will appoint the top three media buying houses to sell the space on its behalf.

Also, to ensure a company can track the impact of its advertisement on consumers and effectively market its products, the Railways will invite a research agency to create a Railways Measurement Index (like TRP for television) and work on a comprehensive demographic profiling at key stations — collecting details like age and profession, among others, of passengers.

Says Suhel Seth: “There are 17 million footfalls that the Railways get every day. We will leverage this footfall and convert it into revenue for them. The model will ensure that the Railways do not have to spend anything, but earn through a revenue-sharing model from the private sector.”

The Railways will put together a tourism board, too, which will focus on opportunities to enhance revenue from tourist destinations. The logic: Eighty per cent of the destinations presented in Incredible India! campaign can be accessed by a rail network and a comprehensive policy is needed with the tourism department to develop the reach. Also on the anvil is a plan to sell passenger data for marketing purposes.

Seth says they are looking at various modules of advertising. For instance, companies could adopt the entire station and use the space inside and outside of it to advertise. The pantry cars could be sponsored by an FMCG company in food business. Companies could also be given an offer to create a brand wrapper around a cargo train. Sampling of products like tea, biscuits and food items could be taken up in trains.

http://www.business-standard.com/india/news/railways-eye-ppp-for-swanky-stations-in-flight-comfort/386544/

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