A remarkable journey
Kochi Metro Rail Limited (KMRL), as a vital player in Kochi’s public transportation system, has recognized the importance of financial sustainability and self-sufficiency in ensuring the efficient operation and expansion of its metro network.
Spanning 27 kilometres with 24 strategically located stations, Kochi’s metro system experiences a daily ridership surpassing 95,000 and a monthly footfall exceeding 2.6 million, presenting an unparalleled advertising canvas for brands. KMRL’s endeavours to diversify revenue streams through innovative approaches have become a beacon for other metros across the nation.
This note delves into the strategies and initiatives employed by KMRL to generate revenue beyond the conventional fare collection system. Leveraging avenues such as advertising, land development, and commercial partnerships, KMRL not only sustains its operations but also contributes to the economic growth of the city.
The continuous evolution of Kochi Metro is evident in its remarkable financial performance. In comparison to prior years, KMRL generated an impressive145% greater revenue in the financial year 2022–23, achieving operating profit for the first time. From Rs 54.32 crore in 2020–21 to an impressive Rs 134.04 crore in 2022– 23, the growth trajectory of KMRL’s revenue is commendable.
Non-fare box revenue for KMRL also demonstrated a robust ascent, escalating from Rs 41.42 crore in FY 2020–21 to Rs 58.55 crore in FY 2022–23. Through persistent efforts, Kochi Metro has been able to eliminate operational losses, realising an operational profit of Rs 5.35 crore in the financial year 2022-23, an unprecedented achievement.
Sustaining Growth: The Role of Non-Farebox Revenue
Using ridership as a lever, KMRL explored conventional and other non-farebox revenue models to shore up its income streams. Some of the key initiatives are discussed here.
a) Semi Naming Rights of Metro Stations
The red walls of the Cochin University Metro Station are grabbing the attention of the public as Indel Money Limited has bagged the semi-naming rights of CUSAT Metro Station while the Pathadipalam Metro Station has been awarded to Indel Corporation giving a blue hue to the Station.
More metro stations will join this list KMRL has already awarded the rights of Eleven more Metro Station to different brand entities and these brands will be suffixing their brand name and will be doing a complete makeover of the metro stations by giving the exterior a fresh coat of paint of their preference.
This five-year partnership, acquired through a competitive tender process, provides brands with coveted advertising spaces both inside and outside stations. Moreover, these visionary brands secure prime display slots within train carriages, ensuring a captivating presence with nine LCD screens and announcements.
b) Train Branding
The exclusive branding rights of Kochi Metro trains have been awarded to Podhigai Ads for 5 years. The advertising rights include metro train’s interior and exterior branding options such as exterior coach full wrap, interior panel options like posters, stickers, digital screens and many more.
c) Advertisement Rights of Pillars and Metro Stations
The Advertisement Rights of Pillars, Medians, Portals and Metro Stations has been bagged by Kerala-based OOH firm Zero Degree. These rights are typically granted through a competitive bidding process, and the chosen entity or agency is responsible for managing and displaying advertisements on metro pillars and related infrastructure.
d) Office & Retail Space Licensing
During the period 2022-23, KMRL increased its reach to the market and acquired new customers for various retail kiosks and office space and was able to licence out a total of 22,541 sq ft of kiosk spaces through 146 licensees. Also, a total of 148,454 sq ft of office space was licensed out through 52 licensees across metro stations.
e) Land Monetisation
KMRL had also initiated the largest land deal (Built-to-suit Model) with one of the premier institutes M/s. Indian Institute of Management Studies – Kozhikode to set up a Kochi campus in CUSAT Metro station. An MoU was signed between IIMK and KMRL with a built-up area of around 53,587 sq. ft which will be leased to IIMK on a long-term basis with a structure of basement + ground + 5 floors. This will also increase ridership.
f) Fuel station Dealership
As a part of generating alternate revenue, KMRL is coming up with a distinctive concept with M/s. Bharat Petroleum Corporation Ltd., for setting up a fuel station on a direct dealership model at Kalamassery Metro station on a land extent measuring around 83 cents through the lease model.
This forward-thinking concept encompasses a cutting-edge fuel station, EV charging infrastructure, a well-stocked supermarket, nitrogen filling services, a food hub, ample car parking, and serves as a comprehensive one-stop destination. Beyond a land monetization initiative, this project will foster social inclusion, provide employment opportunities, and offer a place for quality time spent for the people in Kochi.
KMRL will operate the fuel station directly and the proposed term period is for 20 years. There is no capital investment for infrastructure by KMRL, the entire infrastructure will be developed by BPCL. Only the working capital and operational costs are to be met by KMRL. It is proposed to operate the fuel station directly by KMRL so that KMRL gets maximum revenue.
g) A Milestone Partnership: KMRL and Infopark Elevate Kochi’s Tech Landscape
KMRL have received in-principle approval for setting up M/s. Infopark campus (an IT park promoted by Govt. of Kerala) on a Work near-home concept “WNH” in a carpet area of around 37,500 sq. ft in Ernakulam Metro station PD building (Semi-built- up space)which is to be developed and managed by Infopark, Kerala for a term period of 25 years.
Positioning Infopark Campus in Ernakulam South Metro station is a masterstroke that offers unparalleled advantages, offering easy accessibility to both metro and train commuters. This not only enhances convenience for IT professionals but also plays a pivotal role in alleviating traffic congestion—a critical factor in promoting sustainable urban development. The proximity to the railway station further broadens the connectivity options, attracting talent and stimulating local development, all while reducing operating costs for Infopark and its tenants. The partnership between KMRL and Infopark is not just a real estate venture; it’s a holistic contribution to the development of the area. By strategically choosing Ernakulam South Metro station, the project aligns with the larger vision of creating a tech hub that is not only accessible but also environmentally conscious.
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h) Leasing of Optical Fiber Cables
KMRL has leased out 7 pairs of optical fibres to various network service providers from Aluva to SN Junction covering a distance of about 31.56 km as a part of generating Non-fare-box revenue.
i) Revenue through Parking Contract
As a part of generating alternate revenue, KMRL has given parking management rights to M/s Anantham Online on a percentage revenue share basis. The scope of the licensee is to collect revenue from parking four- wheelers, three-wheelers, two-wheelers, buses, vans and cycles in the designated area adjacent to metro stations.
j) Solar Powered EV Charging stations
KMRL along with M/S. Agency for New and Renewable Energy Research and Technology (ANERT) have deployed a public solar-powered EV charging unit in Muttom & CUSAT Metro station which is the first of its kind in Ernakulam district. ANERT established and is managing the EV charging unit at their own cost in Muttom and CUSAT Metro stations.
Views expressed by Joseph Siby, Head of Procurement and Marketing, Kochi Metro Rail Limited