The Indian Railways? plans to unlock its surplus land bank to mobilise additional revenues has gathered steam. The surplus land which is not viable enough for commercial development will now be leased out for opening schools and setting up public utilities. The railways will also be able to exchange the land with other government bodies who intend to take up these non-commercial ventures.
The national transporter expects the exercise to generate a new robust revenue stream and open up its unused land for a wide array of activities.
Last year, the Cabinet allowed the railways to lease out land for commercial development but out of 136 sites identified for commercial utilisation, it declared 47 sites unviable due to their remote location and various other reasons. The latest decision to lease out these pieces of land for opening schools and creating other public utilities would help the railways make better use of its surplus land.
The rail land development authority will oversee the leasing process for 1,500 hectares (3,700 acres) across the country. The railways expects to earn R5,500 crore by leasing out stretches identified earlier for commercial development. The lease earning for the balance 47 which have been declared unviable for commercial utilisation, is expected to be a lot lower due to nature of the activities proposed.
?Out of 136 sites identified in 52 cities, around 47 sites (around 400 hectares) are not viable for development into stand-alone commercial complexes due to the location of land. Those sites can now be utilised for opening schools and public utilities which will bring in additional revenue,? said a rail official. It will not only help to put unused resources of the railways to productive use but also provide it much-needed funds to the cash-strapped national transporter which is looking for non-traffic revenues.
Under the exercise, the lease period is expected to be 35-40 years. The railways will also be able to permit use of its land for crossing metro networks. Last week, the cabinet gave its nod to the railway proposal for the development of rail land for augmenting revenues, permission for metro crossing, opening of schools and exchange of land with other government bodies.
The railways is already working on a plan, announced in the rail budget, to build staff quarters on its land on a public-private partnership model where the developer also gets a share.
The rail land authority, at present, is in process of leasing out five sites in Bangalore, Gwalior, Gaya, Sarai Rohilla in Delhi and Vijaywada in Andhra Pradesh which will generate revenue of R1,714 crore to developers. The land is leased for a period of 30-45 years, except for the Sarai Rohilla which has been leased for 90 years. In the current rail budget, RLDA has a target of R1,000 crore to be raised through PPPs.
?In the first phase, we?ll be bidding 58 sites for commercial utilisation. The financial viability of the remaining sites is being explored. Real estate consultants such as Knight Frank for south and west and Jones Lang LaSalle India for north and east are exploring commercial opportunities for our multi-functional and standalone commercial sites,? a rail official told FE.
RLDA is also developing multi functional complexes at railway stations (MFCs). The authority is ready with a blueprint of 60 MFCs at railway stations on which the work will start soon.
