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The Rail Land Development Authority (RLDA), the arm of the Indian Railways that commercialises land parcels, expects to start seeing the results of the projects awarded in fiscal 2019-20. The programme, which would have led to the Railways getting ₹1,553 crore in the next few years, was affected because of Covid-19.
“Like the rest of the real-estate sector, RLDA was also impacted, with contractors facing difficulties. It has, however, started seeing recovery signs,” RLDA Vice-Chairman Ved Parkash Dudeja told BusinessLine .
RLDA is developing the entire eco-system around a railway station in such a manner that the “premium value” of nearby locations will soar instead of getting muted, he said.
Large projects
“The pandemic saw the real estate sector facing pressure, and we were no different. We could not visit a lot of sites. However, by now, a lot of (the pandemic) effect has gone. We have done a lot of ground work during the time and we will be coming up with 25-30 bids in the next 3-4 months that include land parcel development, colony development and railway station development,” he said.
One such mega project is the New Delhi Railway tation development, for which RLDA expects to see big funds participating as well. The date of qualifying bid submissions has been extended to February 3, 2021, as bidders have sought time for the same, in view of the upcoming Christmas holidays, Dudeja added.
He said that fiscal 2019-20 was a watershed year for RLDA when it awarded long lease of 45-99 years for commercial land parcels that would bring in a revenue of ₹1,553 crore on a net present value basis. Simply put, these are projects for which the Railways do not have to spend anything. Rather, it will receive certain amount over the next 6-7 years.
Covid challenges
“However, by the end of the financial year (2019-2020), the pandemic and lockdowns happened. One of the other challenges was companies facing liquidity challenges. They have approached us to extend the time for payment of instalments of upfront premium,” elaborated Dudeja, adding that they are studying the requests for delaying the premium receivables.
Bidding during the pandemic has been a mix. RLDA’s first colony redevelopment project in Guwahati was bid out (during the pandemic), where it will get ₹75 crore and 156 houses for railway employees. Not that all projects got attractive bids. There were some projects that did not receive any bid, he said.
Premium value near stations
Locations near railway stations used to lose their “premium value”. “That should see a reversal with the station development programme when we develop the entire ecosystem near a railway station.There is also an urgent need to speed up NOCs (No Objection Certificates) from local authorities and State government, for faster recovery of the real-estate market. This will not only be beneficial for the passengers, but also create opportunities to develop the surrounding areas by the local authorities to create value for all the stakeholders.”
Broadly, RLDA has the task to develop 92 Greenfield land parcels, 62 station development (apart from 61 through the Indian Railway Station Development Corporation, in which RLDA has a 50 per cent stake), 84 railway colonies and multi-functional complexes (MFC) near railway stations that can have small budget hotels. For instance, in an MFC near Katra, a Holiday Inn is coming up.
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