After several delays, the cash-strapped Indian Railways is finally set to open another revenue stream by monetising its land bank to fight its financial woes. The national transporter is leasing out multi-functional complex buildings (budget hotels with commercial space) at prime locations in 14 cities including Jodhpur, Haridwar, Jammu, Udaipur and Gwalior.
The multi-functional complex buildings have been constructed by Ircon, the construction arm of the Railways, and would be leased out for a period of 30 years. ?The bids have been called for the commercial spaces and budget hotels we have constructed on railways? lands at prime locations in these towns. We are looking for private players who want to furnish, operate and maintain these buildings. This is the first step towards commercialising railway lands,? a rail ministry official told FE.
?It will be too early to share the revenue projections. Let us wait for the response first. But since these are all prime properties, they should fetch us good revenue,? the official said. The railways is expecting budget hotel chains, such as IBIS, Lemon tree hotels, Ginger and Sarovar Portico, to bid for the multi-functional complexes, which would house restaurants, shopping centres and multiplexes.
The ministry of railways has formed Rail Land Development Authority (RLDA) for commercial use of land owned by it. RLDA has leased land to Ircon for development and sub-leasing of multi-functional complexes at various railway stations.
The announcement for building MFCs was made in the 2009 railway budget by the then railway minister Mamata Banerjee. Initially, these complexes were planned near 49 railway stations, but the railway board finally gave its nod for 24. ?In phase one, we are leasing out 14 stations. The remaining 10 will done in phase II,? the official said. The railways targets to earn R5,500 crore by leasing out around 1,500 hectare of land.