Creating value through Redevelopment
Ved Prakash Dudeja, Vice Chairman, RLDA in conversation with Realty+ speaks about the strategies to monetize Railway lands in India.
Overview of RLDA and strategies to monetize Railway lands across cities
Rail Land Development Authority (RLDA) being a statutory Authority under the Ministry of Railways is mandated with the development of vacant Railway Land, redevelopment of Railway Colonies, redevelopment of Railway Stations, etc. RLDA’s mission is to be a ‘Leader in Creating Value Through Redevelopment Of Land and Air Spaces – Residential, Commercial And Transportation Hubs.’ The strategy is to utilise the surplus land / BUA assets for commercial use for the purpose of generating revenue and creating assets for Indian Railways.
Indian Railways remains one of the largest owners of land in the country and owns approx. 31,000 land parcels spread over 2,92,900 hectares. At present, approx. 43,000 hectares of this land is vacant and available for commercial / residential / industrial usage at various locations countrywide.
Rail Land Development Authority is a depository of these Indian Railway assets available for development and lease. The sites are to be given on a 45 / 99 years’ lease on “as is where is basis” or as per DCR norms of Local Development Authority.
Currently, RLDA is working on four types of projects:
Which are the partners RLDA intends to engage for Redevelopment of RLDA lands?
RLDA’s policy is to select the developers through an open and transparent online bidding system. The highest eligible bidder is awarded the site on lease and on payment of Upfront lease premium, who is expected to develop the site as per local development norms.
The bidder could be a Registered LLP, Registered Trust either Charitable or otherwise, Registered Co-operative society, a Public or Private Limited Company registered under the Companies Act or a foreign company registered with their country, an individual or consortium, etc.
RLDA has also signed MoUs with State Governments, NHAI, NBCC, etc. to develop various stations.
Initiatives taken for the redevelopment of Railway colonies and Railway stations and the strategic tie-ups for the same.
RLDA has taken initiatives to re-develop old dilapidated Railway Colonies currently using far less FSI/FAR than permissible. As per the present scheme, the sites will be leased out to Developers who will redevelop the railway colony utilising full FAR/FSI, duly leveraging the permissible FSI/FAR to generate revenues through commercial utilisation of the land rendered surplus.
The redevelopment of Railway Stations is being undertaken on PPP mode. RLDA has entered into strategic tie-ups with State Governments, NHAI, NBCC, etc. to develop various stations.
Your views on the importance of private-public partnership & case studies-
PPP ensures necessary investments into public sector and more effective public resources management. PPP projects aim at combining the strengths of public sector and private player to create a win-win situation for all the stake holders. It ensures higher quality and timely provision of public services. Appropriate PPP project risks allocation enables to reduce the risk management expenditures. Private sector expertise and experience are utilized in PPP projects implementation. Apart from this a private entity is granted the opportunity to obtain a long-term remuneration. If executed with care and flexibility, PPP is a very useful resource management tool which can result in a win-win situation for all stakeholders.
The RLDA lands available for lease by private developers currently.
RLDA has 55 commercial sites at present and more sites are in the pipeline for entrustment by the Ministry of Railways. The size of plots varies from small plots (1000 Sqm.) to huge land parcels (90000 Sqm.). These are located in important mega cities and tier II cities such as Mahalaxmi Mumbai (2.5 Acre), Kishanganj Delhi (37 Acre), Thiruvattiur Chennai (48 Acres), Maula Ali Hyderabad (22 Acres), Jhansi (8 Acres) etc.
RLDA has recently leased out a large land parcel at Ashok Vihar (Delhi) to M/s Godrej Properties Ltd. for a total Upfront premium of Rs1359 Crores.
Other Major sites which have been leased out are Padi (Chennai) for Rs.43.0 Cr, Hazari Bagh (Ajmer) for Rs.47.88 Cr, Aish Bagh (Lucknow) for Rs.57.67 Cr, Gwaltoli (Kanpur) for Rs. 66.70 Cr, Jhansi (E) for Rs.30.66 Cr, Ayanavaram (Chennai) for Rs.28 Cr, etc.
RLDA also provides excellent opportunities of investment to small investors as we develop Multi-Functional Complexes (MFCs) of various sizes i.e. from 250 Sqm. to 15000 Sqm. MFCs provide multiple facilities like shopping, food stalls/ restaurants, Book stalls, PCO Booths, ATMs, Medicines and Variety stores, Budget Hotels, parking spaces and other similar amenities for rail users at Railway Stations. No clearances are required from local authorities for development of MFC’s, since they are in circulating areas of stations.
A total of 77 feasible MFC sites were entrusted to RLDA, out of which 52 sites have already been awarded. At present approx. 10 MFCs are likely to be put up for bidding PAN India.
Re-Development of Railway colonies is being taken up in a big way by RLDA. As on date total 84 Railway Colony Re-Development works have been entrusted to RLDA Pan India. The aim is to offer surplus FAR available in existing old railway colonies to developers who will in turn redevelop the railway colonies without any expenditure by Railways. This creates a win-win situation for both the Railways as well as the Developer, as a large land pool in the heart of city becomes available for development. Some of the major Railway Colonies currently available for Redevelopment are Bandra East & Bandra West (Mumbai), Boulevard Road (Delhi), Rifle Range & Chilakalaguda (Secunderabad), Pananthope (Chennai), Guwahati, Chaupla (Bareilly, UP), etc.
RLDA has also been entrusted with 51 Railway Stations for Redevelopment which are also planned to be re-developed without any cost to railways.
Re-development of Gomti Nagar Railway Station (Lucknow) was started in May 2018 at a total tendered cost of Rs. 360 Cr. Resources have been mobilized for the Gomti Nagar Railway Station and work is in progress. Delhi Safdarjung station is also being redeveloped and tender is under finalisation.
All other stations are proposed to be developed through PPP route. RFQ for Re-development of Nellore & Puducherry Railway Stations have been invited, to be followed by Tirupati and Dehradun railway stations. RFQs for New Delhi, Charbagh (Lucknow) and Ernakulum railway stations are next in line.
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