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Rail ministry relief gets mixed reactions from media owners

By Bhawana Anand - August 25, 2020

Media owning firms welcome the relief but have concerns over conditions applied owing to uncertain market situation

The Ministry of Railways’ notification with regard to relief extended on non-fare revenue (NFR) commercial and advertisement contracts, has evoked mixed reactions from the media owning firms. On the one hand the media owners appreciate the relief extended to the concessionaires, but on the other hand they are concerned about certain conditions that have been laid down by the Ministry in the instance of the relief being availed by the respective concessionaries.

Indian Railways has granted a 90-day relief on payment of license fee pertaining to the existing operational contracts for the lockdown period, from March 25 to June 22, 2020.

For the first time in the history, the Ministry of Railways has given relief to any party. This shows that the authority wants all contracts to run smoothly,” said S. Kumar, MD of Srishti Group. 

However, all the media owners are concerned about the undertaking wherein once the relief is taken, they can’t surrender the contract before the tenure ends. The media owners find this condition inappropriate because of current business uncertainty.

“This relief is not a complete solution to our business problems. The poor market situation is still a challenge for us. So, we don’t know on what basis we can give such an undertaking,” said Shashi Chaudhary, Director, Century Media Group of companies.

Torrent Advertising had made a presentation to the East Coast Railways for financial support.

Niranjan Dash, Managing Partner, Torrent Advertising, said, “The normalcy hasn’t returned in the operations of Railways. In Orissa, there are hardly 24 trains running per day having less than 10% of passengers capacity. The revenue won’t start flowing in until there is an increase in the number of trains and passenger footfall. Hence, there should have been a complete exemption for some more time.” 

“The Covid19 situation is not known to anybody. We are not sure when the brands will get confidence and the budgets to spend on branding. Hence, it is not correct to bind anybody under a condition,” he added.

The ministry has asked zonal departments to decide the percentage of relief to be given in license fee payment for the post-lockdown period. However, the media owners believe that the struggle is not over for them as still there are some states imposing lockdown.

According to Shashi Chaudharyzonal officers will take time to decide upon the revised license fee for the post-lockdownperiod.

On a more positive note, S. Kumar said, Zonal officers are people working at the ground level, so do appreciate the various nuances of the licenses and the business itself. Moreover, Railways has a robust mechanism to ascertain the passenger traffic, which will go into their decision making with regard to the licensee fee structuring.”

However, he suggested that it would be ideal if there is a cap levied on the footfall that the license fee will be chargeable when there is a minimum footfall of at least 30% at each station.  

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