Railways eyeing private funding for redevelopment of 15 stations

The Rail Land Development Authority (RLDA), an Indian Railways unit, is planning to run the pilot at 15 stations, including Vijayawada and Anand Vihar, the people cited above said on condition of anonymity. He said that based on the experience, the model would be further refined and implemented at other major stations.

Under the Hybrid PPP model, bids will be selected based on the quantum of VGF support required by the private investor. Private developers will be permitted to develop air space (vertical space above platforms) to generate additional revenue through commercial activities, including leasing of office space, development of entertainment and recreational facilities, hospitality services, malls and Even health facilities are also included.

Railway land around the stations will not be part of the station redevelopment PPP, which is expected to be exploited separately by the RLDA under a separate monetization exercise involving leasing of land for commercial and residential development.

“The proposed new PPP model will do away with the need for railways to collect station development charges from passengers, a move that could make the practice quite unpopular among commuters and burden the common man using the railway service. VGF The hybrid PPP model with support and commercial development projects will adequately compensate investors and make it attractive to investors. The model is still being studied and will be available for use only during the next financial year,” RLDA said. One of the above two people, said an official of the .

After the approval of the Railways, the new PPP model will be placed before the cabinet for approval.

Queries mailed to Railway Ministry spokesperson remained unanswered till the filing of this report.

Investment in railway infrastructure was estimated in 2019-20 in an official estimate 50 trillion between 2018 and 2030. Even Finance Minister Nirmala Sitharaman, in the Union Budget 2019-20, proposed the use of PPPs for faster development and completion of railway projects, including track laying, rolling stock manufacturing, passenger freight services delivery and other infrastructure development.

While capex of railways has jumped in the last three to four years, the budgeted capex outlay for FY24 has increased by about 50% 2.4 trillion, requiring huge spending it needs to tap private sources.

The Railways had started considering the PPP model on station redevelopment a few years back, but the PPP model got shelved last year, and it was decided to award the stations under the Engineering Procurement and Construction (EPC) mode, where the cost is fully recovered. is borne by the Government. And private sector participation is minimal and limited to the provision of engineering expertise.

Tenders have already been floated under the EPC route for New Delhi, Mumbai CSMT and Ahmedabad stations besides a few other stations which involve higher capital expenditure. 10,000 crores. Also, the government has announced 1,275 stations for development under the Amrit Bharat scheme in this year’s budget. Almost all these stations are to be redeveloped under EPC.

“Private sector participation in railway projects can also be brought in in EPC contracts after the infrastructure is developed. Commercial development on redeveloped infrastructure by private sector partners may be considered later,” the RLDA official said.

Railways has experimented with PPP projects in loco manufacturing, track laying and signalling; However, broadly, the activity is restricted. Plans to run passenger trains in PPP mode have already been shelved, and the inability of the transporter to function as an aviation and road sector by levying user charges prevents it from expanding PPP coverage.

railway account 1.52 trillion or a quarter of the Centre’s ambitious 6 trillion National Monetization Pipeline (NMP) over four years through FY25. But so far it has drawn almost a blank, making negligible earnings through the exercise. Under the NMP, the Railways was required to monetise 120 stations, 30 trains and 1,400 km of tracks in FY23, but little has been achieved so far. With the national transporter now under pressure to speed up its monetization drive, the option of opening up more areas for PPP projects has become bright.