Railway minister Suresh Prabhu’s plan to redevelop 100 stations into world-class terminals in partnership with corporations is set to get a big start with state-run real estate company National Buildings Construction Corporation picking up 10 stations for revamp at an estimated cost of Rs 5,000 crore.
“We’ll be redeveloping 10 stations and the monetisation would be done through commercial exploitation of the land that railway provides,“ said Anoop Kumar Mittal, chairman at National Buildings Construction Corporation (NBCC). Corporations participating in this initiative in the first phase would redevelop core infrastructure such as platform, lounges, ticketing counters, parking and other passenger amenities, besides building separate arrival and departure terminals on the lines of airports, a railway board official said.
Against this, they would get commercial exploitation rights of these stations’ land bank for 45 years. They can build or lease land to hotels, malls, multiplexes and corporates, the official said.The stations NBCC has identified are Varanasi, Jaipur, Kota, Sarai Rohilla (Delhi), Thane, Margao (Goa), Bhubaneswar, Lucknow, Tirupati and Puducherry. NBCC will construct commercial and residential spaces on the station land earmarked for development. “We’ll soon start the work on the detailed projects reports of these stations,“ Mittal told ET.
According to a government official, the minimum investment required for redeveloping 10 stations would be Rs 5,000 crore. NBCC is a profit-making central PSU that has zero debt on its books. The government recently sold 15% stake in the company. Minister Prabhu had recently told media that various public sector units apart from private companies were also willing to invest in redevelopment of stations.
Experts welcomed the decision.
“The risk appetite of private companies does not allow them to make huge investment in infrastructure, so it’s a good idea for cash-rich public companies to invest,“ said Jaijit Bhattacharya, partner at KPMG. “It will also create good value for NBCC since as they will unlock the wealth through monetising land bank,“ he told ET.
Bhattacharya said NBCC must be targeting to make at least two times of its total investment.
The company successfully implemented a similar model of redevelopment in Delhi’s New Moti Bagh (Chanakyapuri) where housing for top bureaucrats (rank of joint secretary and above) was developed at the cost of Rs 1,700 crore after selling a small piece of the land to Leela Palace Hotels. NBCC is working on the same model for redevelopment of other government-owned colonies in Delhi.
Credits ET Realty