In a move that will boost the Narendra Modi government’s railway station redevelopment programme, the Railway Board has designated the Indian Railway Stations Development Corporation (IRSDC) as an independent and self-run company. As of now, it is a special purpose vehicle floated jointly by Ircon International (IRCON) and Rail Land Development Authority (RLDA). The railways plans to redevelop 400 stations across the country; contracts have been awarded for development of two stations so far — Habibganj and Gandhi Nagar. According to a railway official who did not want to be named, the new structure will help IRSDC take quick decisions. As of now, the appointed chief executive officer (CEO) requires the board’s approval for any decision.
While IRCON holds 51% share in IRSDC (a government undertaking under the railway ministry), 49% is held by RLDA (a statutory authority under the ministry of railways). Under the new structure, IRCON and RLDA will have 50% share each in IRSDC which was formed in 2012 under the Companies Act, 1956. The board of IRSDC comprises three nominee directors from IRCON and two from RLDA. Under the new structure, it will have directors from IRCON, RLDA and the Railway Board, and it will be its own decision-maker.
The company will be headed by a managing director and the Railway Board will have the authority to appoint. As of now, the current CEO of IRSDC, SK Lohia, will be the first managing director of the independent company. The member engineering of the Railway Board will be the chairman of the company. “Till now, the CEO of IRSDC was just an invitee to the board meetings and it was a board-managed company. The CEO used to present its plans to the board which used to take decisions,” said the official quoted above, adding that the CEO used to make the agenda, minutes and lobby for approvals. However, there were issues of equations among shareholders and the board which approves valuations.
“In the long run, the railways had a vision to have a big company to look at station redevelopment and do project management which is now done by the railways apart from framing policies,” the official said. The company in future will look to partner with state governments and investors, and have a think tank comprising people from outside the railways.