NFR - Non Fare Revenue, NINFRIS, Earning Contracts & Earnings Vs Revenue

 

NFR  - Non Fare Revenue, NINFRIS, Earning Contracts & Earnings Vs Revenue

 

NFR - Non Fare Revenue

·         Part of Sundry Earnings

 

·         NFR  - Income from various sources excluding Passenger & Goods Earnings

 

·         NFR consists of

 

1.    Advertisement on Rolling Stock, Railway Bridges, Circulating area of Stations, inside the Stations & other Assets

2.    Setting up of ATM and other stalls at Railway Stations

3.    Digital Content on Trains and Platforms

4.    NINFRIS

5.    infotainment systems

6.    Any other innovative ideas

·         Concept – 2010-11 year

 

·         Different policies by Railway Board

 

1.    OOH - Out Of Home - Railway estate areas & Outside Railway Stations

2.    Mobile Assets - Display in interiors & exterior of Coaches (Vinyl wrapping), Freight wagons (Vinyl wrapping / P.U paint), Locomotives (P.U paint).

3.    RDN - Rail Display Network - Advertisements through digital screens at Stations

4.    Unsolicited NFR proposals - Proposals received from proponent like Similar to Swiss Challenge Method

5.    NINFRIS - New, Innovative Non Fare Revenue Ideas Scheme

 

·         NFR Directorate – 2014 year

 

·         NFR policy switched from Centralized governance (Railway Board) to Decentralizing (Divisions) in the year 2018

 

·         Earnings contracts period is reduced from 5 to 10 years to 3 to 5 years

 

·         Trains will be allotted without tendering system to Central & State Government Departments and Agencies including PSUs for advertising on exteriors of various Trains.

·         Scheme Offers Fixed Rate of: Rs.25 Lakhs per year per Rake for Local Trains / Short Distance Trains EMU/DMU/MEMU. and Rs.50 Lakhs per year per Rake for other Coaching Trains.

·         Telangana Express allotted to M/s Singareni Collieries Corporation Limited on Lumpsum rates @ Rs 50 Lakhs per annum.

 

·         NFR Target for 10 years is Rs.15000 Crores (Rs. 1500 Crores per year)

 

·         But 2018-19 year NFR is Rs. 33 Crores (against target of Rs. 1200 Crores)

 

·         Share of Sundry Earnings

 

	Indian Railways	World wide
Sundry Earnings share	8 %	15 to 20 %

 

Examples of NFR

1.    Handloom stalls

2.    Health Kiosks

3.    Fish spa

4.    Massaging Chairs

5.    Branding of staircases in Stations

6.    Pre-shooted videos  at Railway premises

7.    Branding of Lifts & Escalators

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NI-NFR-IS  - New, Innovative Non Fare Revenue Ideas Scheme

 

·         New scheme - to increase Non Fare Revenue

 

·         Announced by Ministry of Railways in 2018. 

 

·         Object: Promote new ideas and concepts for enhancement of NFR (Non Fare Revenue) and improve passenger convenience on IR

 

·         To classify an idea/concept as innovative - a similar proposal should not have been implemented on the concerned Division before.

 

·         Replication - Divisions are encouraged to report success of such ideas and give wide publicity for possible replication across Indian Railways. 

Salient features:

ü  At Divisional level

ü  DRM – Divisional Railway manager -Full powers.

ü  Nodal Officer – Branch officer of Commercial Dept (Sr.DCM / DCM)

ü  Committee of Branch Officers of Commercial Dept, Finance Dept and Dept holding the assets to be used scrutinizes the proposals received and recommended to DRM for approval.

ü  Terms & conditions of the Agreement are accepted by the such committee with the approval of DRM

ü   Savings in expenditure if any, is added notionally as “deemed earnings” for the purpose of evaluation of project.

ü  Token non Refundable application fees Rs. 1000 – should be accompanied to each proposal.  Object of levying such fees is to avoid non serious ideas/concepts.

ü  Based on the importance of the proposal, DRMs are authorize to decide the EMD – Earnest Money Deposit of not less than Rupees 10,000 /-

ü  Projects may be executed directly by the Divisions using their own manpower or through any Railway PSU or outside agencies such as NGO – Non Governmental Organisation, SHG – Self Help Group, Cooperative society etc.

ü  Period – One year or part there of.   Can be extended beyond one year with the approval of DRM. If Extended, Licence fees for extended period may be decided depending on the realization of the earnings of the Project.

Safeguards/Precautions

·         Should not be political or religious in nature.

 

·         No permanent structure should be constructed

 

·         Not violating the norms of aesthetics, environmental concerns, decongestion, safety and security, free movement of passengers, sanitation standards, temporary structures, fire, safety etc as prescribed under Railway rules.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earning Contracts

 

Simplification of Earnings Contracts (except Parcels & Catering)

Tender Amount	Tender Committee
Up to Rs. 50 Lakhs	No T C. Direct Acceptance by SG/JAG/Sr.Scale  (Independent charge)  – subject to conditions
Rs. 50 Lakhs to Rs. 2 Crores	2 Member TC ( Comml& Finance)
Rs. 2 Crores and above	3 Member TC (Comml, Finance & User dept)

 

 

Contract Amount	TAA – Tender Acceptance Authority
Up to Rs. 5 Crores	Sr.DCM
Rs. 5 to Rs. 10 Crores	ADRM
Rs. 10 Crores to Rs.100 Crores	DRM
Rs. 100 Crores and above	PCCM

 

Extension of Contract	By
6 Months (2 spells of 3 months each)	Sr.DCM
Above 6 Months (Concurrence required)	DRM/CCM/PCCM

 

 

Direct Acceptance – Earnings Contracts

ü  Constituting the Tender Committee is not required for awarding of the Earning Contracts up to Rs. 50 Lakhs by SG or JAG or Sr.Scale (Independent charge)

 

ü  Earning contracts are finalized expeditiously without prolonged Tender Committee Proceedings thereby avoiding loss of Revenue to Railways.

 

Requisites of Direct Acceptance of Tenders

ü  By SG or JAG or Sr.Scale Officers(Independent charge)

ü  Up to value Rs. 50 Lakhs

ü  Tender Committee not required

ü  Tenders through IREPS only

ü  Tendering through E-Tender i.e., IREPS and Open Tender mode only

ü  Minimum Notice Period – 21 days

ü  H 1 cannot be bypassed

ü  Negotiations if any, with H 1 only

ü  Reasonable Speaking Order by TAA – Tender Accepting Authority (about Tender evaluation & Acceptance)

ü  LOA  - Letter Of Award/Acceptance should be vetted by Finance (Object is to comply the above requisites or not)

Earnings Vs Revenue

In Indian Railways, we use normally the word Earnings instead of Revenue.  Now we will check the difference between the two and is it correct to use the word Revenue in place of Earnings or not. 

 

Revenue minus Expenditure is equal to Earnings.

 

The difference between revenue and earnings is that while revenue tracks the total amount of money made in sales, earnings reflect the portion of the revenue the company keeps in profit after every expense is paid.

 

So Using the word Earnings so far in lieu of Revenue is incorrect.  Because Earnings means profits/surplus after deducting the expenditure from Revenue.  

 

So, here after

 

Abstract X -  Coaching Revenue

 

Abstract Y  -  Goods Revenue

 

Abstract Z - Sundry Revenue

 

It is high time to modify the Revised Accounting Classification in Finance Code Volume Two accordingly.

 

 

 

 

 

 

 

 

Key Takeaways

1.    NFR stands for Non Fare Revenue

 

2.    NFR is part of Sundry Earnings / Revenue

 

3.    NI NFR IS  stands for New Innovative Non Fare Revenue Ideas Scheme

 

4.    NINFRIS Introduced in 2018

 

5.    NINFRIS is part of NFR

 

6.    Divisional Level  (Previously NFR at Railway Board level)

 

7.    NINFRIS - Non Refundable Application fees – Rs. 1000

 

8.    NINFRIS - EMD – Not less than Rs. 10000

 

9.    NINFRIS - DRM – Full powers

 

10. NINFRIS - Period – One year or part there of  

 

11. Earning Contracts - Direct Acceptance - up to Rs. 50 Lakhs ( Tender Committee is not required)

 

12. NFR Directorate at Railway Board - 2014 year

 

13. Earnings contracts period is reduced from 5 to 10 years to 3 to 5 years

 

 

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MCQ

 

1. NFR - Non Fare Revenue is ______ 

1. Part of Sundry Earnings / Revenue
2. Excluding of Sundry Earnings / Revenue
3. Part of Other Coaching Earnings / Revenue
4. Separate component of Earnings / Revenue

2.NINFRIS stands for ____________ 

1. New Indian Non Fare Revenue Ideas Scheme
2. New Innovative Non Fare Revenue Ideas System
3. Novel Innovative Non Fare Revenue Ideas Scheme
4. New Innovative Non Fare Revenue Ideas Scheme

3.NINFRIS introduced in the year______

1. 2020
2. 2019
3. 2018
4. 2014

4.NFR Directorate at Railway Board ________________

1. 2014 year
2. 2018 year
3. 2020 year
4. 2016 year

5.Earnings contracts period is reduced from 5 to 10 years to ___________

1. 3 to 5 years
2. 2 to 8 years
3. 1 to 5 years
4. 4 to 8 years

6.Earning Contracts - Direct Acceptance - ________ ( Tender Committee is not required) 

1. up to Rs. 1 Crore
2. up to Rs. 5 Crore
3. up to Rs. 2 Crore
4. up to Rs. 50 Lakhs

7.TAA - Tender Acceptance Authority for Earning Contracts for valuing Rs. 100 Crores and above is __________ 

1. Railway Board
2. GM
3. DRM
4. PCCM

8.Up to Rs. 50 Lakhs, Direct Acceptance of Earning Tenders by the Officer of ________ (subject to certain conditions) 

1. Selection Grade (SG)
2. Junior Administration Grade (JAG)
3. Senior Scale (Independent Charge)
4. All the above

9.In case of Direct acceptance of Tenders, vetting of LOA - Letter Of Acceptance / Award is ______ 

1. Required
2. Not required

10.Non Refundable application fees in respect of NINFRIS is ________ 

1. Rs. 1000
2. Rs. 10000
3. Rs. 20000
4. Rs. 2000

 

 

Answers:

 

1.     A

2.     D

3.     C

4.     A

5.     A

6.     D

7.     D

8.     D

9.     A

10.  A

 

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