Railways to earn Rs140m through company ads

If successful, more trains, stations will be offered for brand advertisements

LAHORE:

Pakistan Railways (PR) will earn an extra Rs140 million per year as its attached department Pakistan Railways Advisory and Consultancy Services (Pracs) has awarded a tender to SQ Communications, which will allow different companies to advertise their brands on express trains and railway stations.

The contract will add to the income of the railways which is struggling to streamline its flow of revenues. After suffering losses for years, the railways managed to bring down its deficit to Rs27.25 billion in financial year 2014-15 and earned Rs31.92 billion against the target of Rs28 billion.





“PR has outsourced the project to Pracs, which will take a 15% share or Rs21 million out of the total revenues generated in a year,” said Pracs Managing Director Zafar Ranjha while talking to The Express Tribune.

Pracs would manage to earn 50% of that amount (Rs21 million) in profit as the cost of the project had been estimated at around Rs10.5 million, he added. This is not the first time that the PR management has permitted advertisements of different companies on its assets and a similar experiment had been made in 2007, but the venture did not last long and ended with the change in government.

However, some railway officials pointed out that the companies were concerned about the inconsistency in policies, especially after the change in core management or government officials in the state-owned rail firm.

The companies came with proper homework and wanted long-term commitments and guarantees for their investments if a sudden change in policy occurred, they said.



Ranjha, however, insisted that every new management must ensure that they honoured the earlier contracts and a special clause had been added in the contract to compensate the companies if the new administration failed to meet the commitment.

“We are going for a one-year contract to tackle this challenge, we have communicated to the successful bidder that the contract can be extended if things go smooth,” he said.

Five express trains namely Taiz Gaam Express, Awami Express, Khyber Mail, Hazara Express and Karachi Express will initially be offered for the advertisement of brands.

Apart from the trains, access will be provided to 14 railway stations on the Main Line-I for the advertisements.

Ranjha said special railway teams would identify the places on railway coaches and stations and advertisements would be allowed on only those spots. “Railways is going to earn extra money without any effort, we will assess the outcome of this project and if results are fruitful, then we may add more trains and stations to the project,” he added.



Talking about the bid price and the award of contract, he said, “we have given the contract to the highest bidder, Pakistan Railways is a government-owned enterprise, we have to follow public procurement rules, advertise properly and award contract to the company that gives the maximum bid.”

Published in The Express Tribune, March 17^th, 2016.

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