New Delhi, Finally overcoming many roadblocks, Railway Minister Piyush Goyal is likeley to pilot the long awaited station redevelopment proposal in the Cabinet meeting slated for Wednesday seeking involvement of the private sector in redeveloping 600 stations on an extended 99-year lease period.
The proposal to extend the lease period from earlier approved 45 years was hanging fire with Finance Ministry, Urban Affairs Ministry and Niti Ayog since the new plan was firmed up by Goyal to make the redevelopment project a success venture both for the public transporter and the real estate players.
Since the 45 years lease proposal did not get good response from private players, there was a need to make it more attractive, said a senior Railway Ministry offical.
According to the amended proposal slated to be taken up by the Cabinet, the Railways will seek approval for redeveloping 600 stations in the first phase through Indian Railway Station Development Corporation (IRSDC) as the nodal agency for a lease period ranging between 45 years to 99 years depending upon the project.
After facing hurdles to the 99 years lease proposal, railways has adequately explained to the concerned Ministries of the need of the extended lease period.
Railways has explained in a note that the changes it sought were “essential to attract the major real estate players into such transit-oriented development (TOD) programmes in the urban sector”.
TOD is a type of urban development programme which maximises the amount of residential, business and leisure space within walking distance of public transport. The Railways’ note has details about the TOD which aims to increase public transport ridership, reduce automobile travel, and promote sustainable urban growth.
The basic purpose is to leverage the commercial potential of railway land while at the same time upgrading basic amenities at stations, the official, said adding: “The government aims to use the redeveloped stations as catalysts of economic activity in the surrounding areas.”
The redevelopment of 600 stations envisages opening of shopping plazas, office complexes, hotels, multiplexes and parking lots, among other commercial activities, on rail land, and making provisions for improved passenger amenities at stations.
While the Railways aims to earn about Rs 50,000 crore over the next 10 years from commercialisation of rail land near stations, the ambitious project is expected to involve expenditure of over Rs 1 lakh crore — Rs 80,000 crore in commercial exploitation and Rs 35,000 crore in station redevelopment.
The Cabinet had, in 2015, approved the proposal to redevelop 400 railway stations using a contract method called the “Swiss Challenge” – with a 45-year lease period. However, the proposal did not get a good response, prompting the currently proposed changes.
Besides, earlier only General Managers (GMs) of zonal railways were authorised to undertake the exercise. Now it has sought the involvement of states, the public sector, public-private partnership (PPP), and the engineering, procurement, construction (EPC) models as well.
Station redevelopment envisages huge private investment for construction, operation, and maintenance of infrastructure shich shall be enabling factor for greater employment generation.
Besides, ISRDC, the Cabinet is likely to okay the Railways proposal to involve NBCC and other central government agencies in the redevelopment project if required.
With the Railway Minister holding additional charge of Finance Ministry, the proposal is pushed in the right earnest and the concerns of the Urban Affairs Ministry and Finance Ministry are being addressed.