Airport-like railway stations will soon be a reality with Indian Railway Stations Development Corporation (IRSDC) looking to make projects lucrative for private sector. IRSDC MD & CEO SK Lohia outlines the Rs 50,000 crore plan for private investment in stations, how several hurdles have been removed with single-window clearance, and what’s in it for passengers. Edited excerpts of interview with The Times of India:
How many stations are being redeveloped by IRSDC? Will railways invest?
Ministry of Railways (MoR) has entrusted all stations to IRSDC except those already given to other agencies. IRSDC makes the business plan, studies, land diligence, traffic studies for which we find money from our promoters. Initially, we are redeveloping 61 stations. Railways has agreed to give a Project Development Fund that will be returned. We have asked for Rs 50 crore to begin with. As these stations are awarded, premium will start coming from successful projects.
What is the estimated private investment?
The Rail Land Development Authority (RLDA) is also working on 62 stations. For a total of 123 stations, the private investment is envisaged at Rs 50,000 crore. 50 stations are targeted to be bid out within a year and the remaining in another year. Investment will happen over 4-10 years because it includes real estate development as well. Private parties will develop real estate as per demand. There will be a lease period of 60 years for commercial development and 99 years for mixed-use or residential development.
Redevelopment of stations has been an ongoing project. What are you are doing differently this time?
Habibganj was the first to be successfully awarded on PPP. A lot of learnings have gone into the exercise; earlier yard remodelling was a part of station redevelopment, that has now been taken out. Redevelopment will be limited to the station building, circulating area, concourse, subways, cover on platforms. Yard remodelling builds in a lot of uncertainties for investors.
We have worked with state governments, Attorney General, Law Ministry to make IRSDC the single-window clearance for approving the plans. These projects do not require prior environment clearances. Infrastructure status has been provided to them. The lease period has been increased, mixed use development is now permitted. The plan approval comes through after consultation with local bodies. There is a Public Private Partnership Appraisal Committee (PPAC) – the project goes through evaluation by MoR, Niti Aayog, Department of Economic Affairs, Department of Expenditure, Ministry of Law. A Group of Secretaries under the chairmanship of Niti Aayog CEO and co-chairmanship of Chairman Railway Board is also monitoring the projects.
The Group of Secretaries has approved user charges as an additional source of revenue for the developer. The Habibganj and Gandhinagar projects will be ready by December. That brings a lot of confidence to everybody.
Are Indians ready to pay user fee?
In India and abroad, users pay for better infrastructure. Without that infrastructure cannot be developed. User charges give comfort to developers and lenders. The charges will be very nominal. People are ready to pay for better service.
Will the user charge be a pre-determined percentage of the fare?
That will be unfair for a long-distance traveller. The charge has to be per-use. The user fee will be pre-fixed, unlike airports where it is decided by the regulator. It will be notified beforehand including its indexation with inflation.
How has the response been to tenders floated during Covid pandemic? The Chandigarh station tender had to be scrapped.
We have opened RFQs for Amritsar, Nagpur, Gwalior and Sabarmati. The response was outstanding, we had a total of 32 bids, out which 29 qualified for RFP. The provision for user charges has increased confidence levels. PPPAC has dropped the technical eligibility criteria at the RFQ stage. Even if you don’t have construction experience, you can get a construction agency because these are all investment projects. This will open the field for more investors.
For the Chandigarh project, we did not get any bids for land monetisation. There is a challenge as far as the real estate market is concerned.
What will be the top takeaways for passengers?
Passengers associate stations with congestion. Now, the arrival and departure areas will be separated. There will be convenient waiting spaces for passengers at the concourse. Depending on financial viability, we will try to bring all platforms under a single roof to save passengers from vagaries of weather. Passengers will have airport-like experience, including clean toilets and retail spaces. All stations will be divyang-friendly.
A railopolis will be created – the travel time will be reduced and passengers can use public transport. We are trying to build a mini smart city. Normally, the railway line divides the city into two halves; one side is more developed than the other. We will create connectivity on both sides so that they can be developed equally.
Any major retail brands on board?
We are in talks with players like Shoppers Stop and Big Bazaar. Nestle has already opened an outlet at Anand Vihar station. We are talking to all big brands and hope to offer branded products at affordable cost.
Source From : Times Of India