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Two Indian Railway arms — Ircon International and Rail Land Development Authority (RLDA) — have signed a memorandum of understanding to set up a special purpose vehicle (SPV) that will undertake redevelopment and maintenance of stations.
The SPV, called Railway Stations Development Corporation, will have 51 per cent equity stake from Ircon International, with remaining held by RLDA.
To start with, station redevelopment of major stations including Delhi, Mumbai, Kolkata, Chennai, Bangalore, will be handed over to the SPV, the Railway Minister, Mr Dinesh Trivedi said here on Wednesday.
Citing the Japanese model, the Minister stated that up to 30 per cent of total railway revenues can come through commercial utilisation of land.
This will reduce the pressure on Railways to look at fare hikes from passengers and freight users to increase earnings.
Indian Railways has been attempting to take up station redevelopment through a public private partnership basis for many years now.
The SPV will take up provision passenger amenities in a cost neutral manner by utilising the real estate potential of the land and airspace in the stations.
The SPV will earn revenues by providing real-state on a build-operate-basis to interested firms such as caterers and hotels.
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