Railways making station redevelopment proposal more lucrative

Indian Railways takes suggestions from big firms in final bidding document of station redevelopment project to give better deals to infrastructure firms


The redeveloped stations would have improved passenger amenities like shopping malls, multiplexes, office complex, eateries and larger parking lots. Photo: Indranil Bhoumik/Mint
The redeveloped stations would have improved passenger amenities like shopping malls, multiplexes, office complex, eateries and larger parking lots. Photo: Indranil Bhoumik/Mint

New Delhi: Indian Railways is making station redevelopment deals more lucrative for infrastructure companies by incorporating suggestions made by firms such as Tata Realty and Infrastructure Ltd, HDFC Bank Ltd, Larsen & Toubro Ltd and Shapoorji Pallonji Group in the final bidding document.

“The three-member committee which was asked to go through the suggestions and come up with the final bidding document that would be put forward before the railway board has introduced a lot of suggestions like doubling the lease term of 45 years, capital investments from railways, waiving off the mandates like developer should have done 25% of his works under public-private partnership (PPP) and prior experience in railway station development,” said a senior railway official who did not want to be identified.

“The revenue model being proposed is that 10-20% of the project cost will be paid as upfront premium to the railways by the developer and the rest will be on annual basis, while earlier in the draft document the developer was suppose to pay the premium on monthly basis.”

He added the final document would be soon given approval from the Railway Board.

The project is one of the highest priorities of the Indian Railways as of now because it has been over five months and the ministry has not been able to finalize the bidding document for the Swiss Challenge method yet. The railways also plans to take a loan of $500 million from World Bank for the project.

The railway station redevelopment project is an ambitious project of Prime Minister Narendra Modi and railway minister Suresh Prabhu where 400 A and A1 category railway stations are sought to be developed.

The redeveloped stations would have improved passenger amenities like shopping malls, multiplexes, office complex, eateries and larger parking lots.

In December, the railways prepared a draft framework of rules for developers who wish to undertake contracts to redevelop 400 stations, six months after the Union cabinet gave its nod to such a move by inviting bids in an attempt to bring in private investment to the public utility.

According to the draft, developers have to get clearances for the redevelopment work on their own. They also need to make safety arrangements for rail traffic during construction. The national carrier also wants developers to allow private vendors operating under the commercial lease and licences of railways on stations till the end of their lease period.

The developers won’t be allowed to block rail traffic for more than two-three hours a day and will also not be allowed track diversion.

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