Station Makeover: Update on IR’s station redevelopment programme

Update on IR’s station redevelopment programme

Given its increased focus on enhancing passenger convenience and comfort, the Ministry of Railways (MoR) announced plans to redevelop 400 Category A and A1 stations across the country. To this end, it launched the Station Redevelopment Programme in 2015, which envisaged rehabilitation and refurbishment of 400 stations across 100 cities. However, following a tepid response from the private sector to Phase I of the programme, under which 23 stations were to be developed, in March 2018, IR released a new plan to develop 70 stations with its own funds. Work for this has been allocated to the zonal railways. In addition, 27 stations are being developed by other government agencies such as the Indian Railway Stations Development Corporation (IRSDC), the Rail Land Development Authority (RLDA), the National Buildings Construction Corporation (NBCC) and IRCON International Limited. Given the huge scale of this programme, implementation is a challenge due to the lack of adequate revenue. This paucity of funds has necessitated monetisation of land to fund station redevelopment.

Progress so far

The station redevelopment programme will entail an investment of around Rs 1.1 trillion for the revamp of 600 stations. Of this, Rs 760 billion is expected to be the investment requirement for commercial development, while the remaining Rs 340 billion will be for station development. In October 2018, the Union cabinet approved the redevelopment of railway stations with IRSDC as the nodal and main project development agency. Redevelopment will be undertaken by leveraging commercial development of land and airspace in and around the stations. This programme will help in providing state-of-the-art amenities to passengers and generate additional revenues. As the nodal agency, IRSDC will prepare the overall strategic plan as well as business plans for individual stations or a group of stations. Upon approval of the business plans by the MoR, IRSDC or other project development agencies will take up station redevelopment work. In addition, the norms for redevelopment of stations have been made simpler by increasing the lease period to 99 years with a provision for multiple sub-leases. Further, land for station redevelopment purposes will be transferred to IR by the urban local bodies or other concerned agencies on a freehold basis. At present, a total of 97 stations are being developed in the country. In June 2017, NBCC was entrusted with the work of redevelopment of 10 stations. A few months later, in November 2017, an MoU was signed between RLDA and NBCC to redevelop these stations at a cost of Rs 50 billion. While the Gomti Nagar, Charbagh (both in Uttar Pradesh) and Puducherry stations are under development, construction work for the remaining seven stations – Kota in Rajasthan, Sarai Rohilla in Delhi, Tirupati and Nellore in Andhra Pradesh, Madgaon in Goa, Ernakulam in Kerala and Thane in Maharashtra – has not yet been taken up.

Of the 15 stations initially entrusted to IRSDC, the Gandhinagar station in Gujarat is expected to be completed by July 2019. Entailing an investment of Rs 5.56 billion, the project is being undertaken on an engineering, procurement and construction (EPC) basis by Kunal Structure (India) Private Limited. Further, India’s first station to be developed on a public-private partnership (PPP) basis, the Habibganj station in Madhya Pradesh is also expected to be completed by July 2019. Of the remaining 13 stations, seven are planned to be taken up on a PPP basis. These stations are – Shivanji Nagar and Nagpur in Maharashtra, Surat and Sabarmati in Gujarat, Baiyappanahalli in Karnataka, Gwalior in Madhya Pradesh, and Amritsar in Punjab. The other six stations – Anand Vihar and Bijwasan in Delhi, Chandigarh, Gandhinagar in Rajasthan, Kanpur in Uttar Pradesh and Thakurli in Maharashtra – will be developed through the EPC mode. Tenders have already been invited for redevelopment of the Anand Vihar, Bijwasan and Chandigarh railway stations.

Of the 70 stations to be developed by zonal railways, 42 have been taken up under the first phase. In order to speed up project implementation, the government has adopted a cluster approach by making five public sector companies in charge of each cluster. These are RITES, Mecon Limited, the National Project Construction Corporation, Engineer Projects (India) Limited and Bridge and Roof Company (India) Limited. Currently, consultants are being finalised for these projects.

Apart from the aforementioned stations, the Safdarjung station in Delhi is being developed by IRCON. Estimated to cost Rs 2.62 billion, work is currently under progress. Besides, the Bhubaneswar station in Odisha has been entrusted to East Coast Railway for redevelopment. The development involves construction of a new platform and two lines preceding platform no. 1 along with a multimodal hub, which is to be developed by the Bhubaneswar Development Authority. Construction work is yet to commence.

Future outlook and opportunities

About Rs 1.1 trillion worth of investment opportunities are anticipated under IR’s redevelopment programme for 600 stations. The programme also offers opportunities for real estate development (hotels, eateries, multiplexes, shopping malls, office complexes, etc.), and multimodal transit hub development. Despite the huge gamut of opportunities offered by the programme, its success will ultimately depend upon timely resolution of issues and effective implementation of projects.