 "Modified bid challenge method for railway station development soon")
The Indian Railway Station Development Corporation (IRSDC) will soon launch a modified bid challenge method for developing stations. This approach is being adopted to allow more flexibility in awarding railway stations for redevelopment and modernisation.
“Under this approach, if a private party wants to come forward to make a greenfield terminal, and if it is in the railway’s operational requirement, we should be willing to look into that opportunity,” S K Lohia, managing director (MD) and chief executive officer (CEO) of IRSDC said.
“This is an alteration of the Swiss challenge method. Here, too, it is almost an unsolicited proposal. Any station across India can be taken up for redevelopment under this mechanism. After the initial interest, the detailed project report (DPR) will have to be made under guidance of the IRSDC. This will be challenged in the market as the proposer will be given the right to first refusal. The initial proposer will have to match the bid amount. Or else, it will go to the other party and the cost of DPR preparation will be refunded,” he said.
Lohia said this proposal was initially launched in February 2017 but it did not get much response. “The lease period then was 45 years and there was a tepid response from the market. Only two stations got one bid each and they were scrapped. Under the new model concession agreement, a lot of risk allocation has been done in a more reasonable manner. The lease period and operations and maintenance have been extended to 60 years. We hope to see better participation.”
Lohia said the railway ministry will continue to keep a check on costs and affordable services at stations even after privatisation. “User charges will be notified by the ministry. The concessionaire will be able to fix parking charges, with approval of the authority. The private player will have to adhere to other key performance indicators. It will be a mix so that existing services are not disturbed but more premium services can be added.”
“Under this approach, if a private party wants to come forward to make a greenfield terminal, and if it is in the railway’s operational requirement, we should be willing to look into that opportunity,” S K Lohia, managing director (MD) and chief executive officer (CEO) of IRSDC said.
“This is an alteration of the Swiss challenge method. Here, too, it is almost an unsolicited proposal. Any station across India can be taken up for redevelopment under this mechanism. After the initial interest, the detailed project report (DPR) will have to be made under guidance of the IRSDC. This will be challenged in the market as the proposer will be given the right to first refusal. The initial proposer will have to match the bid amount. Or else, it will go to the other party and the cost of DPR preparation will be refunded,” he said.
Lohia said this proposal was initially launched in February 2017 but it did not get much response. “The lease period then was 45 years and there was a tepid response from the market. Only two stations got one bid each and they were scrapped. Under the new model concession agreement, a lot of risk allocation has been done in a more reasonable manner. The lease period and operations and maintenance have been extended to 60 years. We hope to see better participation.”
Lohia said the railway ministry will continue to keep a check on costs and affordable services at stations even after privatisation. “User charges will be notified by the ministry. The concessionaire will be able to fix parking charges, with approval of the authority. The private player will have to adhere to other key performance indicators. It will be a mix so that existing services are not disturbed but more premium services can be added.”
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