‘Rlys to lease land in FY24 for ₹10k cr to monetize assets’

The agency would also for the first time monetize built-up assets and close awards of mega railway station development projects at Delhi, Mumbai and Ahmedabad. In an interview, RLDA vice-chairman Ved Parkash Dudeja spoke of the key infrastructure projects being undertaken by RLDA and how the agency is becoming the prime monetization vehicle for the Railways. Edited excerpts:

Covid impacted railway operations badly, affecting both its services and revenues. How has RLDA navigated through this difficult period?

Like all other sectors, covid had a deep impact on our operations. In fact, the pre-covid year 2019-20 was the best-ever year for RLDA, as it could award land lease contracts worth ₹1,553 crore. But covid disrupted operations thereafter, as awarding went down to rock-bottom level of mere ₹133 crore in FY21. Things have started picking up since FY22, when we could award lease contracts worth ₹655 crore, with ₹533 crore Upfront Lease Premium and ₹122 crore as Development of Railway Assets during 2021-22. This year, things have picked up really well as we have already awarded lease contracts worth ₹2,200 crore and may end the financial year with total lease award of ₹3,000 crore. Next year, we have set a target of awarding lease contracts worth ₹10,000 crore.

How has the improvement in leasing contracts impacted RLDA’s revenues?

We have generated total revenues to the tune of ₹425 crore this year so far. In the previous year (2021-22) we generated revenue to the tune of ₹380 crore while during the covid period of 2020-21, our revenue fell to ₹352 crore. In pre-covid 1999-2000, we had revenue to the tune of ₹933 crore but it included ₹800 crore from Dharavi development project. Next year, the revenues should easily surpass ₹1,500 crore mark.

What kind of development will be leased out to investors? Will it open up development of surplus railway land real estate development for commercial use by private developers?

We are into the commercial development of surplus railway land. So, we have different categories of development like there are some greenfield projects where we don’t need to have any redevelopment. Then, there are railway colonies where we need to redevelop our assets. We currently have been given 121 commercial sites for development by the Railways, and so far, we have awarded 35 of them for various kinds of commercial development including construction of residential, office space, commercial projects etc. Also, we are carving out excess FAR (floor area ratio) on redevelopment projects of colonies for commercial development, thereby monetizing even existing railway assets. This helps in Railways completing redevelopment of colonies without actual spending on the project.

Railways has gone slow on the government’s monetization agenda where built-up assets are proposed to be sold, leased or operated on public-private partnership basis. Will RLDA spearhead Railways’ monetization agenda?

Our mandate is to develop land commercially so that it earns value for Railways, and at the same time, it contributes to the economic growth of that area and the country. This is a monetization exercise that has been mandated to us that generates revenues through leasing of railway land. Next year, we intend to earn ₹10,000 crore from the monetization exercise that basically involves leasing of surplus railway land, and also leasing of built-up assets.

What kind of assets are proposed to be leased as part of the monetization exercise?

We are building some assets on our own that will be out for lease for the very first time. A land parcel in Gomti Nagar in Lucknow is being developed by us for commercial use. This will be the first exercise where we would lease out built assets. At present, we are not building residential projects for leasing, but only focusing on commercial development.

Is station redevelopment also on RLDA’s radar as Railways wants to give a major facelift to big and small stations across the country?

RLDA is contributing towards some of the most prestigious and mega station development projects in Delhi, Mumbai, and Ahmedabad. We are doing techno-economic studies for 403 stations redevelopment projects. We have also won the tender for about 40 stations. The government has also announced 1,275 stations for development under Amrit Bharat Scheme in this year’s budget.

Our aim is develop land around these stations when they are upgraded. This could be through lease of developed assets or development of land to be awarded on lease. We have already done master planning for land development around 50 of these stations.

We are also working out mechanism for development of 15 of these stations under PPP model, as an earlier exercise to redevelop stations under this model did not evince interest from the private sector.