Railway minister Mamata Banerjee has set off on a journey to create the Brand Railways. And while doing so she wants to use the railways? properties to earn some bucks to make up for the increase in costs when passenger fares are kept unchanged.
?We want to create a brand of the entity, which is providing services to the entire nation through a slew of activities. But we don?t want to refrain from making money, especially at a time when we have not raised the passenger fares in the last seven years. We would definitely monitise the brand name by selling space in trains, railway stations and other possible locations,? a senior official in the railways told FE.
The railways is likely to be the largest single entity to be affected by last month?s government decision to free diesel prices. The Centre?s decision to raise the retail price of diesel by Rs 2 a litre is set to increase the fuel expenditure of Indian Railways by Rs 470 crore a year.
Although it is not the first time that the railways is going to advertise to earn money, this time it has taken an aggressive stance. ?We want to create the brand through an aggressive advertisement campaign in the print, electronic and outdoor media. We have set a substantial chunk of money for the purpose,? another senior railway official said requesting anonymity.
The railways has sought to appoint panels of advertising agencies and media-buying agencies. The advertising agencies will have to build the brand, while media-buying agencies will generate revenue through commercial publicity. ?Once the brand is created we expect a better revenue from advertising for the third parties. The total revenue potential from advertising has been estimated to increase from Rs 150 crore to Rs 1,000 crore a year,? an official said.
The applicant agencies should have an average billing of Rs 200 crore in the last three years and the top three contributors of the firm should be in the top 100 companies, the tender floated by the railways state. The railways will do the due diligence on the applicants by the end of this month.
