The Hindu Business Line : ‘Delay in setting up Rail Neer plants benefiting competition’

New Delhi, May 1 A parliamentary committee has asked Indian Railways not to delay IRCTC’s plan to set up two new packaged drinking water (Rail Neer) plants, pointing out this is actually benefiting its competitors, or other companies that sell “branded packaged water”.

“There is huge demand for Rail Neer in the market but due to inadequate supply by IRCTC, certain other brands are also managing to sell their packaged drinking water at railway stations, thereby eroding the profitability of the company,” it stated. IRCTC currently owns and operates two Rail Neer manufacturing plants at Nangloi (Delhi) and Danapur (Bihar). IRCTC’s plans to set up two more plants in Palur (Tamil Nadu) and Ambernath (Maharashtra) are on hold as it is awaiting approval from the Railway Ministry for taking possession of the land.

under-pricing tab

Moreover, the committee has asked Railways to suitably rationalise the procurement prices of the “highly popular” Rail Neer so that IRCTC does not have to register losses by “under-pricing” it. Railways had asked IRCTC to supply Rail Neer at Rs 6.50 per bottle to Patna and Delhi, and at Rs 7 per bottle to other areas. Rail Neer has been highly popular among the bonafide railway passengers since the brand provided good quality drinking water by international standards and is cheaper compared to other brands, the committee said.

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