Kochi: Kochi Metro Rail Limited Tuesday said Axis Bank has agreed to invest the entire funds required for the Automatic Fare Collection (AFC) system for Kochi Metro system including phase two as a consequence of an International Competitive Bid.
In a release, the KMRL said Axis Bank will also pay an additional royalty of Rs 209 crore to KMRL over the next 10 years for the right to be KMRL's partner in this endeavour.
The entire maintenance of the AFC system for 10 years will be undertaken by Axis Bank. The bank will issue co-branded debit cards to the users of the Kochi Metro system.
In addition to this, 20 per cent of Axis Bank's gross revenues, from the utilisation of this Debit Card outside KMRL's ecosystem in various mercantile outlets and internet transactions, will also accrue to KMRL over the next 10 years.
KMRL said this is the first time such an innovate model is being launched anywhere in the world. This innovative business model, which KMRL has designed, is expected to change funding models for AFC systems in the metro industry globally.
The Automated Fare Collection (AFC) system is a critical core component of any Metro system, which includes complex hardware and software installed at entry points of Metro stations as well as the buses and boats.
This system uses Radio Frequency Identification Devices (RFID) to collect fares from the users of the urban transportation systems.
In such a system, the Metro ticket can be in the form of a co-branded Debit Card or a NFC enabled Smart-phone or a 'patch' on a mobile device or any other surface with NFC stickers or QR code, or even as a paper-coupon.
A significant part of the investment on the systems side of the Kochi Metro Rail system is for the provision of such a comprehensive AFC.
The normal practice in metros worldwide is for the metro company to invest their own funds into the capital expenditure.
However, KMRL decided to go in for a completely different paradigm, where we had invited competitive bids from various Indian banks to invest the entire capital expenditure on the AFC system, in return for their right to use co-branded cards and co-branded software on our Metro system, which will function both as a Debit Card of the Bank as well as a ticket for entry into the Metro system.