Ministry of Railways seeks suggestion on new guideline for station redevelopment

Private companies bidding for the redevelopment of railway stations will get compensation if the department delays the payment of station development fee by more than a week.

The ministry of railways has come up with draft guidelines for developers selected to redevelop the railway station, wherein the developers will also offer rebate in case the railway makes the payment within three days of the deadline.

The main source of the income would be the station development fee, which will be shared between the developer and railways, and the company quoting the highest share for the railways will win the bid.

The ministry has also proposed to bring down the concession period to 30 or 45 years instead of 60 years.

“Lenders will feel confident with the new guidelines as it will ensure timely payment for them. By reducing the concession period, we have made it attractive for investors,” said SK Lohia, MD and CEO at Indian Railway Stations Development Corporation (IRSDC).

The ministry has handed over the mandate to redevelop 49 railway stations to the Rail Land Development Authority (RLDA), which is already working on 60 stations. Besides, IRSDC is working on 63 stations.

As per current estimates, the total investment needed for the redevelopment of 123 stations—including real estate development—is more than Rs50,000 crore.

“A draft Model Concession Agreement (MCA) for redevelopment of railway stations has been prepared. All stakeholders are requested to review the draft and provide suggestion by September 3,” the ministry has said.

For the development of real estate around railway stations, the railways has removed the clause of paying premium to the authority.

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The development and maintenance of infrastructure such as roads, electric supply, water supply, sewerage and drains forming part of station estate development has been undertaken by the concessionaire at its cost in accordance with the provisions of the agreement.

“The new draft agreement has simplified the entire process, leaving less scope for interpretation. The developer bidding for the station will have a clear idea and accordingly quote the share of railway in the station development fee,” said Ved ParkashDudeja, vice chairman of RLDA.

The railways will decide the duration of the concession period and it will only be increased in case of a ‘force majeure’ event, the impact of which had lasted for more than three months.

The redevelopment of railway stations across India has been a priority agenda for the ministry of railways. These station projects will be redeveloped under the PPP model. The railways has approximately 43,000 hectares of vacant land across India.

RLDA has over 100 commercial (greenfield) sites across India for leasing, and the eligible developers for each will be selected through an open and transparent bidding process.

The ministry will soon seek the Union Cabinet’s approval to determine station development fee, which will be levied at railway stations set to be redesigned by private concessionaires.



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