Railways see earnings jump after realty foray

Indian Railways expects a seven-fold increase in its earnings through commercial development of land after the Rail Land Development Authority comes into being.

"According to initial estimates presented before the Cabinet, the authority is expected to earn Rs 50-60 crore per annum compared to meagre earnings of Rs 8-9 crore from commercial development," a railway ministry official said.

Indian Railways owns 4.23 lakh hectares of land of which 3.37 lakh hectares are used for tracks, 0.02 lakh hectares are vacant and 0.02 lakh hectares are under encroachment.

The revenue from commercial development -- Rs 8-9 crore -- formed a meagre portion of the Rs 116.53-crore total income earned from land use in 2003-04.

The government introduced a Bill for amending the Railway Act, 1989, in the Rajya Sabha on December 19 to enable the setting up of the RLDA for consultancy, construction, management service and other commercial operations for railway land.

While the ex-officio chairman would be the member ( engineering) of the railway board, the authority would consist of four members and a vice-chairman.

The official said that the proposed authority would be set up as an independent body. To help it function efficiently, the ministry would try to remove as many procedural hassles as possible.

To this end, the ministry would waive the need of the authority to come to the Railway Board every now and then. The official said the ministry was in the process of setting down the rules, which would specify the instances where the authority would not have to consult the board.

For instance, the government was unlikely to put a ceiling on the size of land taken up by the RLDA for commercial development. At present, commercial development of land tracts above 1,000 square metres require prior permission of the board.