Railways working on a non-fare revenue policy

The NFR policy is based on the Swiss challenge model wherein any individual with credentials can present his/her proposal to the government

Manasi Lohumi

Last year, the Union cabinet had given its approval to redevelop 400 railway stations using the Swiss challenge method. Photo: Hindustan Times

The Indian Railways is in the process of creating a non-fare revenue (NFR) policy which will enable it to handle unsolicited revenue generating ideas and proposals from public and private entities, encouraging active participation from both sides.

Depending on the idea, an evaluation panel comprising three railway officials—one each from the finance, commercial and technical departments—will be formed.

“A lot of new proposals to increase the non-fare revenue are ideated by certain entities but whom do they go to if there is no established structure which will handle all these ideas? Hence, this NFR policy would act as a structural response and mechanism to deal with unanticipated revenue generating ideas,” said a senior railway executive, requesting anonymity.

The evaluation committee will examine each and every proposal and then initiate the bidding process by preparing the bid documents and then putting the proposal online for an e-auction for improvements and implementation.

The policy, which is currently in the approval stage, is based on the Swiss challenge model wherein any person with credentials can present his proposal to the government; it will then be subjected to a market test by putting the proposal online in case anybody else wants to improve upon it.

Although the proposal would be auctioned online to the highest bidder, the original proposer of the idea can win the contract by exercising the right of first refusal in case they are capable of matching the same price.

“By making the entire process open, transparent and non-discriminatory, we are trying to encourage everyone to come up with new and innovative ideas for pushing up our non-fare revenue,” added the railway executive cited above.

Last year, the Union cabinet had given its approval to redevelop 400 railway stations using the Swiss challenge method.