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Rail Ministry entity to raise Rs 40 billion for station redevelopment

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

Shine Jacob  |  New Delhi 

Indian Railways, Railways, trail, rail
Indian Railways | Representative Image

The first phase of the rail ministry’s Rs1-trillion station redevelopment plan is set to take off soon. Indian 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 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 (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 — and 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 “About 25 companies have shown interest for (about Rs2 billion investment), while 11 have shown interest for Chandigarh (Rs1.3 billion) and (Rs3.5 billion) separately,” said an official.

REVAMP PLANS

* In the Union Budget, Arun Jaitley had announced redevelopment of 600 stations

* On January 26, railway kicks off idea competition for development of 635 stations under the name Srijan (Station Rejuvenation Initiative through Joint Action)

* In all, 948, ideas received under Srijan

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 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 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.

First Published: Mon, April 23 2018. 01:44 IST
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