Railways calls bids for Bandra land

NEW DELHI: Over four hectares of prime commercial land in Mumbai is up for grabs with the Railways inviting application from real estate companies to lease out its vacant land for commercial development.

Earlier, state-owned National Textile Corporation sold its land in the city for record prices.

The Railways land is in the commercially-strategic Bandra-Kurla Complex at Bandra East, which has emerged as the second biggest commercial hub in the country’s commercial capital. The Railways has invited application, request for qualification (RFQ), from builders to develop the 4.5 hecrates on an 80-year lease.

This is not the first time that the Railways has tried to commercially utilise its land-bank around Mumbai. Earlier on four different occasions, the Rail Land Development Authority (RLDA) –– a statutory authority under the commands of the railways ministry to commercially develop vacant land across the country–– had tried to lease out this premium property. But it faced setbacks due to lack of developer interest, viability concerns, conflict with the Maharashtra government and various other reasons.

This time the Railways has done its homework before inviting application. “Earlier this year, RLDA met interested builders and developers to understand their revenue models to commercially develop the land space,” said a government official, adding that over 50 developers attended the meeting and gave their suggestions on their proposed investment and revenue-sharing model. “We hope to get a good response this time,” said the official adding that the real estate market is looking good now.

The RFQ states that both Indian and foreign companies are eligible. The short-listed bidders, based on pre-qualification, will have to submit financial bid in which they will have to quote the lease premium they are ready to pay. This lease premium can be paid upfront or over 5-7 years with interest.

The Indian Railways has approximately 10.65 lakh acre of land, 90% of which is used for the department’s operational and allied usages. The Railways wants to utilise the balance approximately 1.13 lakh acre, spread across the country, through innovative financing to earn revenue.

RLDA wants to follow a lease models where Railways land is leased on long-term basis for 30-45 years on payment of upfront lease premium or spread over a period of time.