Millennium Post

Railways to garner `5K cr by monetising land reserves

Indian Railways plans to generate about Rs 5,000 crore by monetising its land reserves. The initiative, led by the Rail Land Development Authority (RLDA), involves five projects across the country. So far this financial year, RLDA has generated Rs 937 crore by way of public-private partnerships. It expects to garner Rs 1,000 crore by the end of 2013-14.
For RLDA, a residential project in Sarai Rohilla is one of the first big-ticket projects to take off this year. The project could fetch the railways as much as Rs 1,650 crore. Of the
15.27 hectares, Parsvnath Developers will build residential and shopping complexes, etc, on about 11 hectares. For the remaining land, the developer will build 750 quarters for the railways.
Key upcoming projects of the Rail Land Development Authority are  Ashok Vihar (Delhi), Nirala Nagar( Kanpur), Aishbagh (Lucknow), NH-5 (Vishakhapatnam) and Halisahar (Kolkata). For the 11-acre project, Callison LLC of the US is the architect, while Red Fort Capital is the foreign investor. Parsvnath will lease the land for 99 years.
Other residential and commercial projects are also expected to come up in Ashok Vihar (Delhi), Bandra East, Kurla and Mahalaxmi (Mumbai), Nirala Nagar (Kanpur), Aishbagh (Lucknow), etc. ‘Even if we manage to award two or three projects this year, we will get about Rs 5,000-6,000 crore. The tenders for the projects in Ashok Vihar  (Delhi) and Bandra East (Mumbai) will be floated by next month,’ said RLDA Vice-Chairman Y P Singh.
The structure of each project will be based on the location and feasibility. All of these projects will be in  public-private partnerships, with the railways leasing the land to earn revenue. ‘We can explore the option of revenue-sharing, but it depends on the kind of project,’ said Singh.
Y P Singh noted that RLDA objectives are total dedication and commitment to the corporate mission, redevelopment of railway station buildings, staff colonies and other railway infrastructure along with generation of revenue through innovative use of land resources, to develop expertise in consultancy, construction and management services in the field of real estate,  developing of sound commercial models of development and implementing projects on the model that assures highest revenue return with adequate safeguards, constantly striving to standardise the development process and the financial and legal documentations, to develop the railway land/air space following sound architectural principles in synergy with existing surroundings and state urban development norms, involving private sector, PSUs and other central/state government bodies as partners towards achieving its corporate mission, maintaining full transparency in all decisions and transactions, to have a lean, efficient, accountable and effective organisation.
‘Railways should have considered engaging as an joint developer, but given the structure of the government, it doesn’t have the sophistication to engage as an active partner. This is like the slum model in many cities such as Mumbai, where the slum dwellers are rehabilitated in vertical complexes and the private party uses the rest of the land, ’said the Vice President.
‘The model has various long-term impacts. Though Indian Railways leases land for 99 years, once the land is sold to many people, as is the case in residential complexes, it becomes difficult to get it back. From a monetary perspective, it’s a good deal but you lose effective ownership, which could be a challenge in the future. Indian Railways has about 43,000 hectares of land that isn’t needed for operational purposes,’ added Singh.
His message to young bidders, consumers and consultants is to bid for more and also have faith in railways system. For customers they must understand the railway procedure and gather ample information about rail industry before investing.
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