Metro Rail Must Explore Non-Fare Revenues: ADB

CHENNAI: Aggressively exploring non-ticket sale revenues through advertising, leasing space, property development, and shopping at stations can significantly enhance financial sustainability for metro rail companies in India, finds ADB.

While development of metro rail is needed to meet the mobility requirements of burgeoning urban population in a sustainable and low- carbon manner, financing them comes at a high price. Governments find it difficult to garner the initial capital to create the infrastructure. Generating sufficient funds to meet their operating and maintenance costs is also a huge task.

Relying only on income from fares won’t work as ticket prices have to be kept low to attract a high ridership. In order to achieve financial sustainability, they will have to explore non-ticket sale revenues through advertising, leasing space, property development, and shopping at stations, ADB said in a blog.

While looking at advertising revenues, options including digital screens at stations like jumbo-sized LCD or LED panels can be explored. ‘Train wrap’ advertising is another appealing form wherein the entire train is ‘wrapped’ in advertising. ‘Pouring rights’ to sell beverages on all station premises, ‘station naming rights’ allow a corporation or entity to name a station over a period, bring in revenues.

The transit stations could become ideal venues for events like hosting corporate events, conferences, fests, and exhibitions. Property development at stations can yield substantive cash flows if planned well. It would involve developing property above and adjacent to stations and at maintenance depots. The sites also could be acquired at prices before the construction of the metro project.

Further, for busy commuters, shopping at stations is quite a boon as they can save time and shop while entering and exiting stations. Transit companies need to find more and more creative ways to generate cash flows to stay in the green and provide affordable journeys for the people. They may need to re-invent themselves from being just transport providers to retailers, real-estate developers, and marketers.