Rail Land Development Authority puts seven land parcels on auction

The Rail Land Development Authority (RLDA) is auctioning seven land parcels and as many multi-functional complexes. The cumulative reserve price for the land parcels is Rs 571.1 crores, while the complexes are expected to rake in at least Rs 26.68 crore.

Among the properties currently on offer is the Boulevard Road land parcel in a posh Delhi locality that has a reserve price of Rs 393 crore.

In response to queries from Business Standard, RLDA said it has auctioned 24 land parcels so far, earning a lease premium of Rs 1,867 crore against a total reserve price of Rs 1,743 crore. These auctions have taken place largely over the last three years.

According to officials in the know, the Ashok Vihar land parcel in Delhi and the Padi land parcel in Chennai are the most prolific ones auctioned till now. Godrej Properties had bought the Ashok Vihar land parcel for Rs 1,359 crore while Textile major Pothy’s had bagged the Padi land parcel in Chennai for Rs 43 crore.

According to an RLDA presentation, the Padi land is suitable for commercial use while the Ashok Vihar land can be used for commercial, residential and mixed use.

RLDA is currently handling 84 commercial residential sites, 84 railway colony redevelopment work and 62 re-development projects of railway stations. It also has 123 multi-functional complexes of which 55 have already been leased out.

Officials say the properties to be monetised are decided by the Railway Board. The RLDA is a statutory authority under the Ministry of Railways for the development of railway land. It has four key mandates as a part of its development plan —leasing of commercial sites, colony redevelopment, station redevelopment and multi-functional complexes.

It is estimated that the Indian Railways has approximately 43,000 hectares of vacant land across India.

The RLDA offers sites for commercial development on a lease of up to 45 years and residential development on up to 90-year leases.

Set up in 2007, the RLDA had a tough time undertaking its responsibility due to litigation and encroachments. It also faced opposition from state governments that do not want to let go large lucrative land parcels that are generally located in the centre of the cities.

In July 2018, the Comptroller and Auditor General (CAG) of India had red-flagged delays in development of railway land for commercial use by RLDA. It recommended that the railways may take timely action to seek clearance from the respective state governments for change in land use and open space reservation. The railways may also examine the legal implications of change of land use in consultation with the state governments. There seems to have been some speeding up of efforts since the CAG report.