A total of 1,318 railway stations by the Indian Railways are being considered for redevelopment under the Amrit Bharat Station Scheme (ABSS). However, with limited participation in the PPP mode owing to restrictions on pricing, market risk related to real estate development and limited track record of PPP projects in railways, the Government reallocated station redevelopment work on the EPC mode in December 2022.
The competition, in traditional segments like roads and buildings, remains elevated and hence the railway station redevelopment provides business opportunities estimated at Rs 30,000 crore for construction companies to grow and derisk their businesses through diversification.
The station redevelopment project awards witnessed moderate competition in the past two years, reflecting maximum discounts of up to 18% and a median discount of up to 4% and have been similar to other railway (Engineering, Procurement & Construction) EPC projects where the median discount is up to 5%. Indian Railways, being a strong counterparty, the receivable cycle is also expected to remain low and comparable to that of the NHAI.
