Infra developers to get railway land, airspace on 99-year lease. Several big real estate firms have been insisting on long leases for redevelopment
NEW DELHI: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday has cleared the way for the railways to commercially develop land and air space in and around stations by approving its station redevelopment plans, according to a statement. It has also provided for a longer lease tenure of up to 99 years from the previous 45 years.
“The Indian Railway Stations Development Corporation (IRSDC) will be the nodal agency for the development of stations which will leverage commercial development of land and air space in and around the stations.
“This programme will help provide state-of-the-art amenities for passengers, generate additional revenues and will be overall at least cost neutral to the railways over a basket of stations,” a statement said.
IRSDC will prepare the overall strategic plan and business plans for individual or a group of stations ensuring cost neutrality of this programme.
Upon approval of business plans by the Railway Ministry, IRSDC or other project development agencies will take up the work of station redevelopment.
The railways then will plan the development of the land in consultation with authorities concerned to transfer land to it on free hold basis.
A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership.
“This would enable railways to accelerate the redevelopment of major stations across the country on an overall cost neutral basis. These redevelopment efforts will lead to creation of state-of-the-art smart stations that will function as mini smart cities,” it said.
While a Cabinet approval was obtained on June 24, 2015 to redevelop ‘A1’ and ‘A’ category stations (with higher earnings and footfalls) by zonal railways for a lease period of 45 years, it failed to take off.
During various interactions with developers, investors and other stakeholders, various issues including multiple sub-leasing, simplified bid procedures, etc. were repeatedly raised.
The railways then proposed an improvised and simpler programme design including these issues and under a specialised executing agency (IRSDC).
The station redevelopment project is estimated to cost over Rs 1 lakh crore for 600 stations.
Several big real estate firms such as Tata Realty, Shapoorji Pallonji, Reliance Infrastructure, Larsen and Toubro, and Essel Infraprojects have been insisting on long leases for undertaking station redevelopment.
Station redevelopment is one of the most ambitious projects of the Modi government, under which 400 A- and A1-class stations are planned to be revamped by monetizing 2,700 acres of prime railway land. However, the project has been facing problems because of policy flip-flops, and strict terms and conditions.
Habibganj station in Bhopal, which is being monitored by IRSDC, is already under redevelopment. The project was backed by Bhopal-based Bansal Group, which got the project on land lease of 45 years.
The cabinet also approved Metro rail lines for Bhopal and Indore in Madhya Pradesh. The cost of the Indore Metro would be around ₹7,500 crore, while for Bhopal it would be ₹6,941 crore. The projects will be undertaken by the special purpose vehicle Madhya Pradesh Metro Rail Corp. Ltd.