New Delhi: State-owned construction major NBCC (India) Limited (NBCC) is close to clinching a deal with the Indian Railways for redeveloping about a dozen railway stations, says company’s top boss. “Talks with the railway ministry is on and we may get contract to redevelop 10-12 railway stations,” Anoop Kumar Mittal, Chairman and Managing director, NBCC told.
The railways has identified nearly 400 ‘A-1’ and ‘A’ category stations, mostly located in metros, major cities, pilgrimage places and key tourist destinations, for redevelopment by private developers.
These stations will be renovated along smart city lines with the aim to enhance passenger amenities, provide easy access to stations and enable optimal utilisation of land at railway stations. Developers will recover their costs by exploiting surrounding land for development of commercial real estate, which would then become a revenue stream for the PSU.
The internal rate of return (IRR) on NBCC’s investment would be anywhere between 12 to 15 per cent, depending on the agreement between the two sides. The national transporter is looking to rope in NBCC and other private players, as its subsidiary, Indian Railways Stations Development Corporation (IRSDC), cannot handle so many projects.
To its credit, the PSU has completed New Moti Bagh redevelopment project in Delhi. It is also building nearly 30,000 houses under redevelopment and new projects in the national capital, including Kidwai Nagar, Sarojini Nagar, Karkardoma and Sanjay Lake.
The company has tied up with UK-based Department for International Development for collaboration in this area.
Mittal said the exact cost of the projects would be known only after stations are identified and detailed project reports are prepared.
Railway minister Suresh Prabhu had announced that the PSU would undertake redevelopment of old railways stations in the 2015-16 budget. Following that, the railways signed a memorandum of understanding (MoU) with the ministry of urban development last October.
The memorandum of understanding proposes two joint venture options for renovating railway station areas on a fast-track basis. The first option is for the railways and the special purpose vehicle to execute smart city plans set up a joint venture, with equal share in equity. The joint venture will, in turn, award redevelopment to NBCC on a nomination basis.
In the second model, NBCC can be roped in as the third partner with equal share. The public sector undertaking can design, develop and execute the redevelopment plans on a self-financing basis.
While the railways would be responsible for forming joint ventures, the urban development ministry will work with states and urban local bodies for integrating railway station redevelopment as part of smart city development plans.