For operating cost, Metro lines looking at non-fare options

Bids called for station naming rights; advertising, retail and telecom rights are other options

Sweety AdimulamUpdated: Wednesday, December 08, 2021, 10:24 AM IST
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A metro train passes through a residential area during its first official safety trial run on a new line in Mumbai on May 31, 2021. | AFP

The Maha Mumbai Metro Operation Cooperation Ltd (MMMOCL), which will take care of operations and maintenance (O&M) of upcoming Mumbai Metro Lines 2A (Dahisar to DN Nagar) along the Link Road and Line 7 (Dahisar East to Andheri East) along the Western Express Highway, is exploring the non-fare box revenue potential for these two lines which are scheduled to be partially open by early 2022.

The selected brand name will be allowed to add a prefix/suffix to the station name, which will be displayed at the main station entrances, signages across the station and maps, and even be mentioned during in-train audio announcements. For this, the bidders have to propose an annual license fee and those bidding the highest for a station will own naming rights.

The minimum bid or reserve price is set at Rs 2.75 crore. The license fee will escalate by 5 per cent, year-on-year. Also, a consortium or joint venture is not permitted. The last date for bid submission is January 14, 2022.

MMMOCL recently floated a tender for “station naming rights” of seven stations on both these metro lines for a five-year period. These stations are – Andheri West, Lower Malad and Malad West on Line 2A, and Gundavali (Andheri East), Aarey (Goregaon), Akurli (Kandivali) and Magathane (Borivali) on Line 7.

According to the Auctus Advisors-StudioPOD – the transaction advisers to MMMOCL for non-fare revenue monetisation – the seven stations are the high ridership / high profile stations. Consumer brands looking for visibility or those having a strategic interest in a station due to its proximity to businesses are expected to participate in the bidding process. An existing example of this concept is the 'LIC Andheri station' on the operational Mumbai Metro line One (Ghatkopar to Versova).

In fact, station naming rights, advertising, retail and telecom rights are globally adopted avenues to generate non-fare revenue for metro networks, helping them cover operating costs partially. This also reduces the dependence on state funding metro operations, the private firm stated.

Shadab Siddiqui from Auctus Advisors-StudioPOD commented, “Naming rights benchmarks for existing stations on line 1 are in the range of Rs 2-3 crore, while for the upcoming underground line 3 it is over Rs 5 crore. All these non-fare revenue streams are highly valuable commercial opportunities for businesses to connect with Mumbaikars at these high footfall transit points during their daily commute, and also tourists visiting the maximum city.

”Meanwhile, the MMMOCL has set a condition that only those firms that are at least three years old, have average three year turnover of Rs 50 crore and positive net worth, will be allowed to bid for the station naming rights.Apart from this, a separate tender for telecom rights has also been floated and is currently open for bid submission. In this, telecom tower companies can bid for space at the stations to set up telecom tower equipment and network booster devices, which will not only benefit passengers but also the surrounding catchment, giving them better phone network.

The Metro Line 2A and 7 are completely overground lines spanning 35 km, with 30 stations in total. The estimated ridership of both lines is to be 9 lakh passengers per day. In comparison, the ridership for existing Metro line one was 4.5 lakh passengers per day before the lockdown due to Covid-19. At present, MMMOCL is carrying out dynamic trial runs on a 20 km stretch between Dhanukarwadi and Aarey on both these metro lines.

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