Modernisation Efforts: Progress under the station redevelopment programme

Progress under the station redevelopment programme

Improving the ease of travel for passengers has been a key focus area of the Ministry of Railways (MoR). Launched in 2015, the station redevelopment programme envisages the redevelopment of 400 stations across 100 cities. At the time, the cabinet finalised the programme on a public-private partnership (PPP) basis with a revenue-sharing model as a part of the Indian Railways’ non-fare revenue scheme. However, in view of the slow progress and tepid response to the programme, the government decided to change the terms and conditions of the contracts to make them more lucrative for real estate developers. Adding further to the delay is the cancellation of the ongoing bidding process and securing the requisite clearances.

Background and the progress so far

In July 2015, the cabinet approved IR’s proposal to offer Category A and A1 stations for redevelopment on an “as is where is” basis, by inviting open bids from interested parties. Under the programme, the cost of station redevelopment is to be met by leveraging the commercial development of land and air space in and around the stations. As part of the programme, stations and adjoining areas will be redeveloped along the lines of a smart city for enhancing passenger amenities, easing access to stations and enabling optimal utilisation of railway land. The redeveloped stations with state-of-the-art facilities will include helipads, green buildings, malls, medical facilities and other commercial units. IR initially plans to redevelop the stations with approximately 2,700 acres of encroachment-free land available for commercial development in multiple phases.

IR has appointed Indian Railway Stations Development Corporation Limited (IRSDC) as the nodal agency for implementing the programme. Incorporated in April 2012, IRSDC is a joint venture between Ircon International Limited (a Government of India undertaking under the MoR) and the Rail Land Development Authority (a statutory authority under the MoR).

A promising project in terms of station infrastructure development, the programme entails an investment of at least Rs 960 billion. Of this, Rs 680 billion is expected to be the investment requirement for commercial development, while the remaining Rs 280 billion will be for station development. This investment potential is spread across 13 states in 13 zonal railways, though for now, project tenders in Uttar Pradesh and Kerala have been cancelled.

In February 2017, 23 stations were selected for redevelopment under Phase I of the programme, through the engineering, procurement and construction (EPC) and PPP models. Under this phase, IR will provide around 140 acres of encroachment-free land to developers on a 45-year lease. Further, IRSDC has been entrusted with the redevelopment of 12 stations to be implemented by the Railway Board, in addition to the 23 stations. Phase I of the programme is expected to entail an investment of Rs 60 billion-Rs 90 billion.

The status of stations under the programme to be implemented by ISRDC is as follows:

  • Habibganj, Madhya Pradesh: Bhopal-based Bansal Group is implementing the project at a cost of Rs 4.5 billion. Work on the project is in progress and is scheduled to be completed by October 2020.
  • Gandhinagar, Gujarat: The project is being implemented by Gandhinagar Railway and Urban Development Corporation Limited, a special purpose vehicle (SPV) of ISRDC and the Gujarat government. The EPC contract for the project was awarded to Kunal Constructions. The project is estimated to entail an investment of Rs 5.56 billion. Work on the project is in progress and is expected to be completed by December 2018.
  • Surat, Gujarat: The project is being implemented by Surat Integrated Transport Corporation Limited, an SPV of IRSDC, Gujarat State Road Transport Corporation Limited and the Surat Municipal Corporation. It is expected to cost Rs 36.4 billion and will create a multimodal hub consisting of a railway station, bus terminal, metro station, bus rapid transit stop, etc. Phase I is expected to be completed by end 2021 while the entire project is expected to be completed within 7-10 years from the day of laying of the foundation stone.
  • Anand Vihar, Delhi: Bids for the project from the 13 pre-qualified bidders were accepted until October 10, 2017 .IRSDC is currently in discussions with the MoR to decide upon the mode of project implementation. It has now been suggested that the project be executed on an EPC basis instead of the PPP mode. The project is expected to cost Rs 8.5 billion.
  • Bijwasan, Delhi: Construction work on the project is expected to commence during 2018-19. It is estimated to entail an investment of Rs 11.8 billion.
  • Shivajinagar, Maharashtra: The project has received local body approvals and the consultation process stands completed. IRSDC has asked the project consultant to submit the technical and financial reports for initiating the request for qualification bidding process. The project is currently facing a delay due to various legal and logistics issues. It is expected to cost Rs 4.5 billion.
  •  Amritsar, Punjab: The project received cabinet approval in April 2017 and at present, the conceptual plan of the project is under development. It is expected to cost Rs 10 billion.
  • Baiyyappanahalli, Karnataka; Nagpur, Maharashtra, and Gwalior, Madhya Pradesh: ISRDC has launched an international design competition open to architects across the globe to participate in a two-stage bid to redevelop these stations. Following the screening of the technical idea and design, financial bids will be called for enabling the selection of the best design at attractive prices.
  • Chandigarh: IRSDC is looking for alternative ways of implementing the project as, following the reduction in commercial area for development in June 2017, the project may not be an attractive proposition for the private sector. The project is estimated to entail an investment of Rs 8.5 billion and is scheduled to be completed in a period of five years from the date of commencement of construction work.

The way forward

The programme offers about Rs 875 billion worth of opportunities in station and commercial development around stations. This estimate has been derived by discounting the stations that are currently under various stages of redevelopment. These opportunities lie in the development of real estate (hotels, eateries, multiplexes, shopping malls and office complexes, etc.) and multimodal transit hubs.

Apart from this, the linkage of the programme with the Smart Cities Mission, entailing the convergence of modernisation plans of cities and railway stations, will throw up additional opportunities in the long term across various urban infrastructure segments and medical facilities like polyclinics. After Phase I, IR will launch the redevelopment of over 100 stations under Phase II and the remaining 277 stations under the A1 and A categories will then be launched under Phase III of the programme.

Although the programme offers immense opportunities, its success will depend on timely and effective implementation.