Indian Railways for easier PPP norms to revamp 600 Railway Stations

NEW DELHI: The railways ministry plans to soon seek cabinet clearance to ease norms for private investment in the railway station redevelopment programme.

Indian Railways has identified 600 stations for redevelopment and the ministry is of the view that the existing public private participation (PPP) norms for the station redevelopment programme are stringent, officials said. The private sector has been wary of potential return on investment in such projects, they said. Under the programme, the contractor who wins would be given railway station and adjacent land owned by the railways on a lease of 45 years for development.

The contractor would be able to monetise the land through commercial exploitation, by building malls, hotels and complexes, for instance, on the land available. In lieu, the contractor would have to modernise the existing station and provide all modern, airport-like facilities at platforms and peripheral railway area. The national transporter proposes to tell the cabinet that the concession period of 45 years is not  lucrative enough to attract private investors.

“For 2-3 stations we have tried to bid, there have been single bids. The one bid scenario is not preferable but not too many investors have been willing to come forward on existing terms,” said a senior ministry official, who did not wish to be identified. The rail ministry received comments as part of an inter-ministerial consultation process. It also plans to allow the concessionaire to sublease land.

The railways ministry wants that Indian Railways Station Development Corporation (IRSDC), a state-run unit of the railways, should be implementing agency for all redevelopment projects and be allowed to raise funds from domestic and international markets, whereas the ministry could provide initial funding for kickstarting the project.

Out of the 600 stations identified, Indian Railways is redeveloping around 100 stations on its own under the engineering, procurement and construction or EPC mode, and by involving other public sector units such as the National Building Construction Corporation. The remaining would be redeveloped through PPP.