Indian Railways is planning to ease the norms for private firms to redevelop 400 stations after interested developers said they won’t be able to bid under the criteria mentioned in the draft tender document.
“Different developers like Reliance, Tata Realty, HDFC Bank, Larsen and Toubro and Shapoorji Pallonji have sent their suggestions to the draft tender document that was put on the railways website for suggestions. The companies have asked to ease the eligibility and evaluation criteria as they won’t be able to bid for the projects in the current scenario,” a railway official said on condition of anonymity.
He said the railways has received more than 100 suggestions, most of them related to eligibility and evaluation criteria.
He said one of the criteria was that the developer should have done 25% of his works under public-private partnership (PPP). “However, the companies pleaded that since not much work has been done under the PPP mode in India, a relaxation should be given.”
Another criterion was prior experience in railway station development.
The official mentioned above said since station development in India has always been the domain of Indian Railways, no Indian firm could qualify under this, though some have started looking for global partners with experience in rail station development.
“Tata Realty and Reliance have already started looking for joint venture partners to undertake this work,” he said.
In the 2015-16 rail budget, railway minister Suresh Prabhu said railways will redevelop 400 A-1 and A category stations by inviting open bids from interested parties with their designs and business ideas. Under the project, the entire cost of station redevelopment is to be met by leveraging commercial development of vacant separable land and air space in and around the station.
In December, railways prepared a draft framework of rules for developers who wish to undertake contracts to redevelop 400 stations, six months after the Union cabinet gave its nod to such a move by inviting bids in an attempt to bring in private investment to the public utility.
According to the draft, developers have to get clearances for the re-development work on their own.
They also need to make safety arrangements for rail traffic during construction. The national carrier also wants developers to allow private vendors operating under the commercial lease and licences of railways on stations till the end of their lease period. The developers won’t be allowed to block rail traffic for more than two-three hours in a day or night and will also not be allowed track diversion.
Under the proposed revenue model, railways will take 15-20% of the project cost as upfront premium and the rest will be on annual basis, while earlier it was to take premium from developers on monthly basis.
The change in revenue model was brought in by railways as developers would be investing huge sums and would need money to redevelop the station.