NEW DELHI: The Indian Railways will offer a 60-year concession period to make investing in station redevelopment more lucrative for private investors, the longest tenure for public-private partnership projects in the country.
Private companies taking up redevelopment of railway stations will get the adjoining land to build malls, hotels and commercial complexes. The developer must modernise the railway station first and provide world-class passenger amenities before the ancillary land is developed.
Investors will also be given space on platforms for commercial exploitation, a senior rail board official said.
Niti Aayog, the government’s think tank, has backed the railway’s proposals and suggested measures such as flexible design and lease payment norms to ensure wider private sector participation in station redevelopment. It recommended that station redevelopment get infrastructure project status, enabling easy and economical borrowing from banks.
“Earlier, we were offering the commercial exploitation rights of the land of the station owned by the railways for about 40 years. After stakeholder consultations, we realised that the period won’t be good enough for an investor. We’ll now extend it by 20 years,” the official said.
The Indian Railways plans to redevelop 400 major stations, envisaging a minimum investment of Rs 1 lakh crore. The Railway Board appointed the Boston Consulting Group as strategic advisor for the project.
The stations will be awarded under the Swiss challenge method, where a proposal is invited online and rivals can offer counter-bids. The method cuts the long-drawn tendering process currently used by the railways. An expert committee will accept the best proposal and the original proposer will get an opportunity to match it.
The stations for which bids will be invited include Lokmanya Tilak (T), Pune, Thane, Visakhapatnam, Howrah, Allahabad, Kamakhya, Faridabad, Jammu Tawi, Udaipur City, Secunderabad, Vijayawada, Ranchi, Kozhikode, Yashwantpur, Bangalore Cantonment, Bhopal, Mumbai Central (Main), Borivali and Indore.
Separately, the railways proposes to monetise land by leasing out non-core tracts to real estate developers for construction of residential properties for 90 years. The railways owns almost 100 acres of land near Connaught Place, Chanakyapuri and other premium areas of the capital. Similar plots are being identified in Mumbai, Chennai, Bengaluru and Kolkata.
Credits ET Realty