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Digital impression of the interior of New Delhi railway station… The station’s modernisation will be on a design, build, finance, operate and transfer model.

Mamuni Das

While asking the Railway Ministry to take a final call on the ‘cross-ownership issue’ — which has halted the Rs 6,000-rore tender to modernise New Delhi railway station — the Ministry of Finance has indicated its preference for scrapping the current tender and re-inviting bids. The companies in race for the project include GVK, Larsen & Toubro, DLF and Maytas Infra.

The New Delhi railway station is being modernised on a design, build, finance, operate and transfer model. A clause in the request for qualification (RFQ) for the station modernisation project specified that bidders with common controlling shareholders or other ownership interest cannot compete as it could lead to ‘conflict of interest’.

It said that the levels of direct or indirect shareholding by an entity in one bidder should not be over five per cent of its paid-up capital and subscribed capital, and more than one per cent in another bidder.

When this rule was applied to the investments of private financial institutions in various bidders, several bidders faced disqualification.

For instance, according to the shareholding data on June 30, Citigroup Global Markets (Mauritius) Pvt Ltd which had 5.22 per cent stake in one bidder (Sadbhav Engineering), also had over one per cent stake in two other bidders — Maytas Infra (2.05 per cent) and Indiabulls Real Estate (1.14 per cent stake).

Similarly, HSBC, through its various investment arms, held over five per cent stake in Indiabulls Real Estate and over one per cent stake in two competing bidders — Gammon Infrastructure and GVK Power.

Thirteen bidders had put in RFQ applications for the project. They include Sadbhav Engineering and SREI Infrastructure; Gammon Infrastructure and Emaar-MGF; Larsen and Toubro; DLF, ITNL (IL&FS Transportation Networks) and AWB Infrastructure; Maytas Infra and VIE; Indiabulls Real Estate and GS Engineering, Reliance Infrastructure and Aeropuertus y servicious; GVK with Mitsui and Leighton; KMC Constructions and China Railways 18th Bureau Group; DB Realty and Deutsche Bahn.

Many of these firms are listed entities, with financial institutions free to buy stake in them from the stock exchange. Thus, the stake of private financial institutions would also vary from time to time.

The Railway Ministry had approached the Finance Ministry for its views on the issue. The Finance Ministry — while specifying that bidders should not be disqualified if private financial institutions have a ‘de-minimis’ stake in them —has put the ball back in Railways’ court. The Ministry of Finance has also suggested that if the RFQ conditions are being changed, it is better to re-invite the RFQ with changed conditions.

While the Railway Ministry is yet to take a final decision on the issue, it seems inclined towards scrapping the current tender, according to official sources. Spread over 86 hectares, the station currently handles an average 3.5 lakh passengers per day, with around 256 trains, including 78 suburban trains, arriving and departing from 12 platforms.

The Railways hopes that a redeveloped station will be able to handle five lakh passengers per day in normal days and seven lakh passengers a day in peak season.

The design plan submitted by Hong Kong-based consultancy Terry Farrell calls for redevelopment of the station as a three-level terminal building with segregated areas for arrivals and departures. This will free up the platform area exclusively for boarding and alighting from trains. The modernisation work will also see the number of platforms on the station go up to 18, against the current 12. Parcel handling will be decentralised in an underground area.

More Stories on : Railways | Modernisation

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