The Union Cabinet on Wednesday approved a  policy on long term leasing of railways land for implementing PM Gati Shakti framework, which includes a reduction in the land licensing fee to 1.5 per cent of its market value per annum and a hike in the leasing period to up to 35 years for cargo-related activities.

The land licensing fee for the use of Railways-owned land parcels is six per cent with a leasing period of up to five years.

The move is also expected to help expedite the divestment of railway PSU Concor in which the Centre holds a 54.8 per cent stake.

The Cabinet Committee on Economic Affairs had approved strategic divestment of Government equity of 30.8 per cent stake way back in November 2019 along with transfer of management control to a strategic buyer. But the high land licensing fee and the impending change in land use policy was one of the key reasons for the delay as prospective buyers are understood to have needed clarity on the issue before bidding.

Concor shares closed 8.58 per cent higher at Rs 726.65 apiece on BSE.

“The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Ministry of Railway’s proposal to revise the railways’ land policy to implement PM Gati Shakti framework for cargo related activities, public utilities and railway’s exclusive use,” Union Minister for Information and Broadcasting Anurag Thakur said on Wednesday after the meeting.

The new policy is expected to enable integrated development of infrastructure and more cargo terminals. The existing entities using railway land for cargo terminals will have the option to switch to the new policy regime after transparent and competitive bidding process.

“Liberalising the land leasing policy would open avenues for all stakeholders, service providers, operators to establish more cargo related facilities and render their participation assisting in generation of additional cargo traffic and freight revenues to Railways,” said an official release.

With the new policy in place, 300 PM Gati Shakti Cargo Terminals would be developed over next the next five years and about 1.2 lakh employment would be generated, it further said.

The amended policy is expected to be notified in 90 days.

The policy also simplifies railways’ land use and Right of Way (ROW) for integrated development of public service utilities like electricity, gas, water supply, sewage disposal, urban transport etc by providing railway land at 1.5 per cent of market value of land per annum.

Further, for Optical Fibre Cables and other smaller diameter underground utilities, a one-time fee of Rs 1000 will be charged for crossing railway track.

The policy also provides for use of railway land at nominal cost for setting up of solar plants on railway land and encourages development of social infrastructure such as hospitals through PPP and schools through Kendriya Vidyalaya Sangthan on railway land at a nominal annual fee of Rs 1 per square metre per annum.

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