The Indian Railways, one of the world’s largest rail networks, is planning to develop its huge property and has announced plans for rail station makeover.
One of its major steps under its rail station development plan is to increase developer’s lease period to 99 years.
In January the Ministry of Railways is expected to seek Cabinet approval to overhaul the Rs 1 trillion station redevelopment plan that is expected to give a boost to India’s real estate sector.
It would also give more financial independence to Indian Railway Stations Development Corporation (IRSDC) and the Rail Land Development Authority (RLDA). They will also become eligible to raise money from the markets for station redevelopment.
“The ministry is floating a Cabinet note for inter-ministerial consultation to take the opinion of the finance and law ministries. We expect the policy to be cleared by the second half of January,” The Hindu quoted an official source as saying.
IRSDC is expected to raise money from the market and invest in engineering, procurement and construction contracts. After getting all clearances, IRSDC would invite private players for commercial development, which according to the railways would reduce the risk factor for an investor.
Fifteen stations might be taken up in the first stage with an investment of Rs 60-70 billion. The policy might also appeal to real estate majors as a developer can use 20 per cent of the redeveloped area on the station for residential purposes. The remaining 80 per cent would be used for commercial purposes.
The Railway Minister Piyush Goyal is coming with many innovative way to modernise the Indian rail networks.