New Delhi, July 16: Some 400 train stations out of the 7,172 on India’s railroad network will get a facelift by co-opting private players, the government said on Thursday. The decision on redevelopment of stations at metros, pilgrimage centres and important tourist destitions was taken by the cabinet at a meeting presided over by Prime Minister rendra Modi.
The decision assumes significance as it will allow private parties to take part in the redevelopment of stations.
“As the Indian Railway Station Development Corp is able to undertake redevelopment of only a few stations, it was proposed to redevelop stations through invitation of open bids from interested parties,” an official statement said.
The railways alone cannot afford the redevelopment project as its finces are already constrained. Currently, the railways has a very high operating ratio of about 91.8 percent.
The high operating ratio leaves very little fincial resources for other essential areas like safety and expansion. It is expected that private players will bring in the much required funds, technical expertise and professiolism for station redevelopment. The government has also been scouting for foreign players from France and Japan to take part in its station redevelopment scheme.
The stations open for redevelopment are classified ‘A-1’ and ‘A’. These are located in metros, major cities, pilgrimage centres and important tourist destitions across the country. Interested parties will have to present their design and business ideas, including commercial development of real estate, the statement informed.
While presenting his maiden budget Railway Minister Suresh Prabhu in February hinted at the possibility of allowing private players to modernise station infrastructure.
Another key aspect of the decision is to allow the private players to commercially leverage real estate assets around the station area.
The permission to leverage real estate assets is to lure the private sector which kept away from the redevelopment scheme of the previous government.
However, sector-based experts cautioned that the policy should be framed in such a manner that clearly defines the role of the private sector and the potential leverage they can extract out of the real estate assets.
“Earlier attempts had failed because there was no clear-cut policy on how much commercial exploitation of real estate is possible. Moreover there are various restrictions that the railways impose on upside leveraging of real estate,” Vishwas Udgirkar, senior director for Deloitte in India, told IANS. (IANS)