The Indian Railways has fast-tracked its land monetisation project, a move that could potentially boost its investible resources. The Rail Land Development Authority (RLDA) will invite bids for commercial development of 30 land parcels by mid-April, an official source said, adding that the transporter’s potential receipts as lease rentals from these land parcels could be around Rs 7,000 crore over a period of 10 years.
The railways’ plan is to mop up at least Rs 19,000 crore over the next five years from land monetisation, which means more land parcels will be put to commercial use soon. “The RLDA is letting out land to developers who will be selected on the basis of premium (rentals) they are willing to pay. The premium offered for five land pieces — in Shimla, Bandra, Raxaul, Gwalior and Padi (Chennai) — that have been let out recently is around Rs 72 crore. A Jhansi land is also ready (for leasing out) which will fetch Rs 30.5 crore,” said the official.
Tenders for nine other land parcels are already floated and six more will be done soon, he added. Developers will be free to decide the type of commercial use, which includes hotel, mall or anything that is commercially viable depending upon the location. The official said the transporter expects bigger sums as premium from Sarai Rohila (Rs 2,000 crore) and Ashok Vihar (Rs 1,500 crore) in Delhi, and another parcel in Bandra (Rs 2,000 crore) in Mumbai.
While developers are required to pay 10% of the total premium upfront, they can then enjoy a no-payment option for another two years. Payment will restart from third year onwards and will be staggered till the 10th year. “Developers though have the option of paying full premium upfront, if they so wish,” added the official.
RLDA was set up in 2007 and was empowered to identify portions of the transporter’s vacant land prone to commercial exploitation. However, little progress has been made by RLDA given that it was constrained by land use restrictions imposed by state governments and other issues, including an earlier policy of earmarking land to it in a piecemeal fashion by the Railway Board.
As per its annual report, the railway arm transferred a meagre Rs 22 crore to the ministry of railways in 2016-17 and 2015-16, each. At the start of the current financial year, the total land entrusted by the railways to RLDA stood at 485.70 hectares. At the same time, the railways had a total of 51,648 hectare of vacant land —though a majority are in strips along railway tracks that are not commercially viable — and around 862 hectares under encroachment. The railways, as a thumb rule, keeps 15 metres of vacant land on each side of tracks.
The transporter is busy identifying its vacant land parcels for its own current and future projects too. The lands are being demarcated so that encroachments can be removed and land parcels are ready for projects, when required. “The policy is yet to be approved by the railway minister. The railways is accessing how much land can be used in the foreseeable future,” said the official.
Once the surplus is established, these land parcels will be allocated for railway projects such as station redevelopment, freight sidings, warehouses, logistics parks and inter-modal stations. The surplus after these allocations will go for commercial development by RLDA.