Cabinet clears the decks for Rs 1-trn railway station modernisation plan

The Union Cabinet on Wednesday cleared a new railway station redevelopment policy for modernising railway stations. The Indian Railway Stations Development Corporation (IRSDC) has been made the nodal agency for redevelopment projects and the lease period for them has been increased to 99 years.

“IRSDC will be the nodal agency for station redevelopment now. It will take up a project based on its suitability,” said Union Minister for Electronics and IT Ravi Shankar Prasad, addressing a press conference on Wednesday.  

The government has already lined up 600 railway stations for an investment of about Rs 1 trillion. Instead of zone-wise and station-wise allotment of projects, railways would now take a cluster approach as part of the new policy. Being the nodal agency, IRSDC will have more financial freedom, including the ability to raise money from the market. The company is planning to come up with an engineering, procurement and construction (EPC) model for this.

Redevelopment of major stations across the country is to be carried out by commercially developing land and airspace in and around the station. “This programme will help provide state-of-the-art amenities to passengers, generate additional revenues and be overall at least cost-neutral to Ministry of Railways (MoR) over a basket of stations. Furthermore, redevelopment of railway stations across the country will have a multiplier effect on the economy, with increased job creation and improved economic growth,” a government statement said.

The idea of setting up world-class stations was first floated in 2009-10 by the then railway minister Mamata Banerjee. It was in June 2015 that plan for redevelopment of ‘A1’ and ‘A’ category stations by Zonal Railways got the Cabinet nod. Initially, the lease period was kept at 45 years. However, it received a lukewarm response from prospective bidders.

Now, Railways will offer 20 per cent of the redeveloped area for residential purposes, while the remaining 80 per cent will be utilised commercially. IRSDC has already lined up plans to raise about Rs 40 billion from the market for upgrading at least 50 stations in the initial phase.

Moreover, to speed up the fundraising mechanism, Railways is likely to enter into a build-operate-transfer (BoT) annuity model deal with IRSDC. With this, IRSDC will be able to raise money from the market based on a letter of comfort from Railways.

IRSDC will prepare an overall strategic plan and business plans for individual or a group of stations to ensure cost-neutrality of the programme. Upon approval of business plans by the railway ministry, IRSDC will start a project. It will be the planning and development authority for railway land and work in consultation with urban local bodies. It will take railway land on a freehold basis. “This would enable the Ministry of Railways to accelerate the redevelopment of major stations across the country on an overall cost-neutral basis,” the statement added.

Other decisions

• The Cabinet Committee on Economic Affairs has approved providing a financial package of Rs 4.69 bn for the Revival and Mill Development Plan (RMDP) of Nepa Limited, located in Nepanagar, Madhya Pradesh. 
• Implementation of Bhopal Metro Rail Project has been approved, which comprises two corridors of 27.87 Km (i) Karond Circle to AIIMS (14.99 Km) and (ii) Bhadbhada Square to RatnagiriTiraha (12.88 Km) which will connect major public nodes and city cluster areas of Bhopal
• Ex-post facto approval to the Second Protocol amending the Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore. The CECA was signed on 24th August