Railways appoints Ernst & Young as Transaction Advisor for redevelopment of 212 Category-C Suburban Stations

In addition to the 400-plus A1 and A-class railway stations that have been identified for redevelopment wherein the work at some stations had already been commenced, the Indian Railways has further selected 212 C-Class Category Suburban Stations (which are mostly falling in major Metro Cities) to be redeveloped and has roped in consultancy firm Ernst & Young for transaction advice. The carrier also plans to put up 50-60 premium stations for tender by the end of the calendar year. The railways recently issued tenders for 23 railways stations to be redeveloped.

“For the next lot, we are targeting to offer 50-60 stations for redevelopment by the later part of the calendar year. We have already appointed the transaction adviser for all zones except northern and western zones wherein technical bids by the associates chosen by the consultancy failed,” said a government official requesting not to be named. The railways has a total of 16 zones.

The C-class stations are in the suburban areas having sizable footfalls and potential. These mostly fall in the local train services in cities such as Mumbai, Delhi, Kolkata, Chennai and Bengaluru. “We will have to go to the Cabinet for approval as at present the railways cannot leverage the land,” said the official. Government rule states that committing government land for long term needs the Cabinet’s approval and the railways sought approval for the premium stations before issuing tenders.

“We will try to cover all states now, so that every state has representation and cover all the zones as well which were missing in the first lot,” said the official about the second lot to be offered. The railways will organise roadshows till May and June and also hold stakeholder meetings. The 23 stations have attracted interest from some big companies which have visited the sites; for example, Shapoorji Pallonji, Larsen and Toubro, ANS Constructions, Design Plus and Tata Realty visited the Faridabad station and developers such as Pir Panjal Construction, KC Industries, Ambuja and New Zeal have visited the Jammu station. The official, however, added that one has to wait and see if the interest converts to action.

The railways along with EY will assist zones in pre-bid meetings which will be held in March and April and after getting feedback, the processes will be refined for the next lot. EY will hold workshops with zonal railway officers, who will be dedicated to work on the project with developers, to increase their capabilities and help the zones in understanding and evaluating the market bids and prepare documents.

The railways plans to redevelop more than 400 A1- and A-category railway stations — which earn sizable revenue — across the country to provide passengers with modern amenities. The railways aims to monetise the land parcels around the station and air space to add to its coffers. Work on Habibganj in Madhya Pradesh and Gandhinagar in Gujarat, which are not part of the 23 put up on tender, has already started.

For each of the 23 stations, the railways has made a detailed information sheet which is part of the tender notice and contains earnings from the station, details of the city among others so that developers preparing concept are fully armed with information. In case more information is required, it can be asked at the pre-bid stage and the railways will keep supplementing information.

The railway also plans to talk to lenders and banks to ease the process of loans that developers will require to redevelop the stations.