To ensure the Indian Railways’ ambitious station redevelopment plan receives maximum bidders, the national carrier has reached out to the foreign embassies in India, requesting the latter to market the plan in their own countries. In return, the railways has received inquiries from Switzerland, UAE, Kuwait, Slovakia, Malaysia and Japan.
According to a railway official who requested not to be named, there are even some foreign funds which are talking to developers in their countries to share their expertise and form joint ventures.
The railways plans to redevelop more than 400 A1- and A-category railway stations — which earn sizable revenue — across the country to provide passengers with modern amenities at an expenditure of `96,000 crore by private developers. At present, work on Habibganj in Madhya Pradesh and Gandhinagar in Gujarat have been sanctioned and another 23 stations have been identified to be put up for tender.
The embassies are showcasing the high-return investment opportunity in India to their local investors. “Kuwait, for instance, parks funds in the US where they get returns of 2-3%. In India and other places, developers are discouraged by their Indian partners as the business environment is perceived to be not good. However, we have assured that this is a high-priority programme of the government and all issues will be resolved. The returns are much higher at around 10%,” the official said.
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The ministry of railways is reaching out to banks as well so that they prepare themselves for funding and if they want to bring in their own criteria, the railways is willing to incorporate them even before the bids are put in so the comfort level increases as a lender.
According to the official, there are even individuals who have shown interest in particular stations. “They can come on their own as 100% FDI (foreign direct investment) is allowed or they can form a partnership here,” the official added.
Under the current structure of the station redevelopment plan, wherein land and air space belonging to the carrier will be monetised, a developer will get a commercial lease for 45 years and the maintenance contract will be provided for 15 years.
For each of the 23 stations, the transporter has made a detailed information sheet as part of the tender notice which also contains earnings from these stations, details of the cities, among other information. In case additional information is required, developers can ask
for it at the pre-bid stage. The railway ministry is now collecting pre-bid questions from developers to which it plans to respond soon.