IRCTC's Rail Neer water sees 46% rise in income

The Indian Railway Catering and Tourism Corporation's (IRCTC) ambitious plans to make its packaged drinking water brand Rail Neer as one of the dominant players on Indian Railways seems to have paid off. The 17th annual general report of IRCTC, presented at the company's general meeting held on Tuesday highlighted a 46% rise income from Rail Neer for IRCTC.

The packaged water segment generated Rs 118.48 crores in the financial year 2015-16 as against Rs 81.03 crores for the year 2014-15.

IRCTC's Rail Neer gamble started in the middle of 2015 when its officials realised that despite railway rules on the usage of Rail Neer at designated stations and trains, the purchase of its brand by zonal railways was not up to the mark. It went ahead and filed a complaint at the Central Bureau of Investigation (CBI) as well against two top railway officials of Northern Railway, who the agency believed were involved in conniving with private sector packaged water firms to deliberately hit IRCTC Rail Neer sales. In October last year, both officials were arrested by the CBI and the case against the two officials is being heard in a designated court.

The second move, apart from ensuring that all railway zones complied with rules to buy a fixed number of Rail Neer bottles from IRCTC, was to pump up production at its four bottling plants, The firm set itself an ambitious target of 16 crore bottles for the year 2015-16. The four bottling plants of IRCTC have a combined capacity of 6.14 lakh bottles per day and the production levels of most were in the higher 90%, said officials.

"The daily requirement of packaged water over Indian Railways is 25 lakh bottles. We supply about 25% of that. So there is still a lot of space to expand operations and sales," said a senior IRCTC official.

IRCTC also faced a round of litigation with stall owners in Mumbai who were protesting over the compulsory selling of Rail Neer but IRCTC's contention was upheld by the Supreme Court in August this year.