How privatisation will impact railway advertising?

For the first time, with the recent request for qualification (RFQ), Ministry of Railways invites private companies to run 151 modern trains over 109 pairs of routes across the country on public-private partnership. The project would entail private sector investment of about INR 30,000 crore.

As per the Indian Railways’ press release, the objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation and provide enhanced safety and world class travel experience to passengers.

Analysising its aftermath, S. Kumar, MD of Srishti Group  said, “There will be 100% transformation of the Indian railways with this privatisation with a drastic improvement in the condition. The central government has a vision but doesn’t have enough structure in place to transform that vision into reality. Hence, this privatisation will improve the culture of the Indian railways like foreign countries. Airports are the best epitome to understand the results of privatisation.”

According to the RFQ, along with the freedom to private players to fix the fare to be charged from passengers, they will also have the choice to explore fresh avenues to generate revenue.

Kumar, shares that this project will have exponential emphasis on the malls, food courts and multi-level parking, offering numerous opportunities for advertising.

The project is also expected to increase the ticket price for passengers but Kumar doesn’t see any negative impact of the same on the middle class and lower class people who are in majority among total travellers. “The audience residing in non-metros and villages also have deep pockets like metro citizens. Hence, affordability will not be an issue for passengers. This would be easily accepted as everyone looks for the high standard of living in the society”, he explained.

However, the privatisation indicates for expensive media tenders which might not fit into the pockets of small and medium level of media owners. He added, “The consolidation of media owners will be required to manage such expansive project. Also, it is likely to attract some international outdoor companies to invest in India.”