Indian Railways has decided to lease out surplus land to the industry for setting up nine auto hubs this financial year. According to the decision, the entity will initially give out the land for seven years, and this period can be extended every year after that. Earlier this year, the railways had announced plans to use its vacant land to set up schools and hospitals.
The decision is a part of the new policy to establish hubs for automobile and ancillary units. The policy, which is effective from June 16, is intended to raise the railways? share in transportation of automobile from the current nearly 2% to more than 10% in the short term. Railways has land assets of 4.31 lakh acre, out of which 46,000 acre is vacant.
In the draft policy issued in April, railways had proposed leasing out land only for three years, which were not enough for automobile manufacturers to recover the cost incurred in establishing the hub. Following the draft, automobile associations, including Society of Indian Automobile Manufacturers (Siam), met railway officials and asked for an extension in the lease period.
In the Railway Budget 2010-11, railway minister Mamta Banerjee had announced 10 such auto hubs with private participation. One hub has been inaugurated at Howrah, West Bengal. ?The hubs were proposed before this Budget but due to the lack of a standard policy, only one hub could come up till now,? Siam director Sugato Sen told FE.
The railways will lease out land only after considering its own requirement in the long term and the operational viability of the project and will charge only licence fee from the developer as ?the scheme is to increase rail-borne traffic?, the policy document states.
The developers of the hub should have recorded a turnover of at least Rs 20 crore during the last financial year and the work on the project should start within three months of handing over the land by the railways. The hub should also become operational in a period of one year.