Speaking to FE, managing director of Indian Railway Catering and Tourism Corporation (IRCTC) MN Chopra said the other brands would be slowly phased out. Contracts with bottled water companies which are typically of two to three month duration will not be renewed. Bottled water companies enter into contracts with either the Railways or the catering contractors who serve on the trains.
According to Mr Chopra, there were about 160 small and big brands of bottled water out of which almost all were available somewhere on the railway network. He said that he did not anticipate small brands being hit badly as the market outside railways would still be available to them. Besides, most brands being sold on the Railways were found to be below quality, he said.
On how IRCTC plans to fight the image of sub-standard quality associated with government products, Mr Chopra said the company would spend about Rs 30-40 lakh on promoting Rail Neer through advertisements.
IRCTCs plant has eight water purification processes which conform to Euro standards. Mr Chopra claimed while other big brands in the country treat water for five minutes with activated carbon, their plant provides 20 minute treatment to water. This removes pesticide molecules through adsorption, he said.
Pesticide content in bottled water had created a major controversy last year following which Rail Neer launch was delayed. IRCTC had to make an additional investment of Rs 30 lakh to bring the processes on par with Euro norms, said Mr Chopra.
As a first step towards making Rail Neer available, IRCTC has appointed a carrying and forwarding agent for north India. The states to be covered are Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh and Rajasthan.
The agent would be transporting 48,000 crates (translating into 576,000 litres) by rail and road from the Nangloi plant. IRCTC would be required to produce about 1 lakh cases per month to serve the entire northern region.
IRCTC would be setting up two other plantswhile one is planned to be located in Danapur in Bihar, sources said the other is likely to be in Secunderabad. The Danapur plant would be catering to Bihar, north eastern states, West Bengal, Orissa and parts of Madhya Pradesh.
The Danapur plant also being set up by Ion Exchange would start functioning by September, said Mr Chopra.
The Nangloi plant, with a capacity of 120,000 litres per day, has come up at a cost of Rs 5.5 crore. It will produce 80,000 litres of bottled water per day.
Rail Neer would also be made available in the market after meeting the requirements of rail users where it would compete with other bottled water. This will come only after we are able to stabilise the brand but we will need to put up more plants to serve the market outside, said Mr Chopra.
The Nangloi plant will be using eight purification processes capable of yielding water quality conforming to Euro standards and was designed to meet the demand of the northern, north western, north central and parts of Central railways.