The first phase of the rail ministry’s Rs1-trillion station redevelopment plan is set to take off soon. Indian Railway Stations Development Corporation (IRSDC) is likely to raise about Rs40 billion from the markets for upgrading at least 50 stations.
The nodal agency in this regard, it will become the second entity under the ministry, after arm Indian Railway Finance Corporation (IRFC) to raise money from the markets. The ministry decided to redevelop stations by itself through IRSDC, under an engineering, procurement and construction (EPC) model, after getting only a tepid response from private entities when bids were invited for 21 stations.
Sources say to avoid procedural bottlenecks like getting rated to raise money from the markets, the railways is likely to enter into a build-operate-transfer (BOT) annuity model deal with IRSDC. “Through this, the railways will give a letter of comfort, based on which IRSDC will raise money from the markets, with a five-year moratorium period,” said a source.
After getting a nod from the Prime Minister’s Office at a recent review meeting, to proceed with a few stations rather than taking up about 600 at one go, the ministry is likely to take up 50 stations in the initial stage.
Pre-bid meetings held for three stations — Anand Vihar and Bijwasan in Delhi on March 27 and Chandigarh on March 28 — got response from major companies such as Tata Group, Shapoorji Pallonji, Ahluwalia, IL&FS, and Bharti Realty. “About 25 companies have shown interest for Anand Vihar (about Rs2 billion investment), while 11 have shown interest for Chandigarh (Rs1.3 billion) and Bijwasan (Rs3.5 billion) separately,” said an official.
In the new plan, Indian Railways will offer 20 per cent of the overall area redeveloped for residential purposes; the remaining 80 per cent area will be utilised commercially. This would mean developers tying up with IRSDC will have the option to build residential structures within the station premises, which are in prime localities.
“The stations allotted earlier — including Habibganj (Bhopal) that the Bansal Group is developing and Gandhinagar (Gujarat) — will be commissioned by December 2018,” said S K Lohia, managing director and chief executive of IRSDC, while refusing to comment on the new model of raising money from the markets. The BOT (annuity) model is commonly followed for projects by National Highways Authority of India. It is considered risk-free, as the granting authority will pay to the concessionaire a fixed semi-annual annuity. The railways had conducted an international design competition for redevelopment of three stations — Baiyappanahalli, Gwalior, and Nagpur. “For Nagpur, French firm Enia Architects was assigned to come up with a master plan for redevelopment. Deals for other two stations are also done,” the official said.