Railways expedite commercial land monetisation through private leasing
23 Aug 2023
2 Min Read
CW Team
Indian Railways intends to solicit bids from private enterprises for the lease of 84 surplus plots valued at over Rs 75 billion in the upcoming 18 months, as disclosed by individuals familiar with the matter.
This initiative forms part of the land monetisation strategy outlined by the Rail Land Development Authority (RLDA), the entity entrusted with the task of redeveloping and commercially exploiting surplus land. The authority has been designated to oversee the development of 119 commercial sites, of which 35 have already been awarded bids, resulting in a lease value of Rs 28.35 billion.
According to one of the aforementioned sources, who requested anonymity, the objective is to expedite the leasing process for the remaining sites, some of which are strategically situated in metropolitan areas, prominent cities, and locations of tourist attraction. This acceleration is aimed at concluding the process by the end of the fiscal year 2025. Under the proposed plan, the commercial leasing of this land would enable the railway system to secure annual lease revenue over the entire duration of the lease agreement, which could span periods of 45, 60, or 99 years.
For context, in the fiscal years 2021, 2022, and 2023, the railways generated asset monetisation gains of Rs 1.33 billion, Rs 6.55 billion, and Rs 30 billion, respectively. The source highlighted that the rapid and efficient monetisation of prime land parcels for commercial development is a favoured approach among private sector developers and offers a noteworthy opportunity for the railways. This method also holds significance for the railway sector, which has exhibited a comparatively slower pace in asset monetisation in comparison to other ministries within the infrastructure domain.
Indian Railways intends to solicit bids from private enterprises for the lease of 84 surplus plots valued at over Rs 75 billion in the upcoming 18 months, as disclosed by individuals familiar with the matter.This initiative forms part of the land monetisation strategy outlined by the Rail Land Development Authority (RLDA), the entity entrusted with the task of redeveloping and commercially exploiting surplus land. The authority has been designated to oversee the development of 119 commercial sites, of which 35 have already been awarded bids, resulting in a lease value of Rs 28.35 billion.According to one of the aforementioned sources, who requested anonymity, the objective is to expedite the leasing process for the remaining sites, some of which are strategically situated in metropolitan areas, prominent cities, and locations of tourist attraction. This acceleration is aimed at concluding the process by the end of the fiscal year 2025. Under the proposed plan, the commercial leasing of this land would enable the railway system to secure annual lease revenue over the entire duration of the lease agreement, which could span periods of 45, 60, or 99 years.For context, in the fiscal years 2021, 2022, and 2023, the railways generated asset monetisation gains of Rs 1.33 billion, Rs 6.55 billion, and Rs 30 billion, respectively. The source highlighted that the rapid and efficient monetisation of prime land parcels for commercial development is a favoured approach among private sector developers and offers a noteworthy opportunity for the railways. This method also holds significance for the railway sector, which has exhibited a comparatively slower pace in asset monetisation in comparison to other ministries within the infrastructure domain.
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