Rail Budget 2013: Railways may put land projects on fast track

By Yashodhara Dasgupta

NEW DELHI: The country’s second largest land-owner, the Indian Railways, is moving full steam ahead to commercially exploit its land reserves. The Railways Land Development Authority (RLDA) is set to bid out ten major land parcels and construction of 75 multi-functional complexes to private players in 2013-14, earnings from which could be factored in the Railway Budget to be presented on February 25.

The cash-strapped Railways will also invite private firms to redevelop and modernize five railways stations.

The Railways owns 4.31 lakh hectares, second only to the defence ministry which has seven lakh hectares around the country, but 90% of its land is used for its operational infrastructure like tracks, signals and depots. Of the 43,000 hectares of nontrack land, the Railways had transferred 136 land parcels over 1500 hectares to the RLDA.


Senior officials said that the RLDA is ready to offer the commercial utilization rights for about ten land parcels to private developers in 2013-14. These plots are among the 52 land parcels of over 800 hectares that the RLDA has identified as commercially viable. Studies are underway to ascertain the feasibility of 37 other land parcels.

Private developers would also be invited to build multi-functional complexes with retail stores, restaurants, budget hotels at 75 sites in 2013-14. Tenders have already been issued for developing such complexes at Dehdradun, Ujjain and Nanded. The Railways has identified 120 sites for such complexes to be developed by private parties and expects assets worth Rs 300 crore to be built for the Railways free of cost. These sites are being offered on 30-45 years lease on the payment of an upfront lease premium or on a revenue sharing basis.

The Railways has decided to double the paid-up capital of a joint venture set up for modernizing stations between RLDA and rail infrastructure builder IRCON from Rs 20 crore to Rs 40 crore by March 2013. The development master plans for five railway stations – Chandigarh, Bijwasan, Anand Vihar, Habibganj and Shivaji Nagar – are likely to be completed in the next two months, said an official in the know.

The Indian Railway Stations’ Development Corporation (IRSDC) is drafting the agreements to be signed with private developers. The land will be leased out to developers for 45 years with a facility management contract for another five years. “The lease rights will be given to IRSDC who will give it to developers,” said Anil Kumar Gupta, general manager (railway infrastucture) RLDA.

The plan is to club commercial development with engineering, procurement and maintenance in the same contract, with capital costs to be funded from the real estate and maintenance costs from retail earnings.

The developers will only be allowed to set up retail spaces once the station modernization is complete.