New Delhi: In a setback to the Indian Railways’ Rs 1 lakh crore station redevelopment programme, the state-run transporter has decided to change contract conditions – which will have to be duly approved by the cabinet again – with an aim to make it more lucrative for real estate developers.
The state-run transporter is reworking the contracts that offer railway land near stations to private players for developing residential premises by extending the lease term from 45 years to 99 years.
Facing a cash crunch, the railways had offered 403 major stations for redevelopment on a public-private partnership (PPP) basis with a revenue-sharing model as part of the transporter’s non-fare revenue scheme.
The ambitious station redevelopment programme was launched in 2015 by the then railways minister Suresh Prabhu with a finalised PPP model approved by the cabinet after prolonged deliberations with stakeholders.
The cabinet in July 2015 had approved the revamping of 403 stations envisaging redevelopment of land area of 2,700 acres, a cost of Rs 68,000 crore for commercial development and Rs 28,000 crore for revamp of the stations.
However, not satisfied with the end results and slow progress, newly appointed railways minister Piyush Goyal has decided to change the terms and conditions of the contracts again to make it more market-friendly.
It is a setback but is a temporary one as the ongoing bidding process has to be stopped till the new ones are finalised, sources in the ministry said. Since the earlier one was approved by the cabinet, the new PPP model too has to be sanctioned by it, sources said.
The Indian Railway Stations Development Corporation Limited, which has been entrusted with the job would roll back the tenders already floated for the redevelopment of 23 stations. However, the redevelopment of Habibganj station in Bhopal will go ahead because the contract has already been awarded for it.
The redevelopment of station envisages construction of malls, hotels, eateries, office complex, parking lots and other commercial development on station premises besides creation of modern passenger amenities. All major stations in cities and metropolitans are on the offer for redevelopment with the dual aim of earning revenue and at the same time providing passengers improved amenities at station premises.
According to railways, even though the whole process is being delayed now, the new contracts with lucrative offers will likely get a good response from private players.