Indian Railways plan to kick start its ambitious plan to redevelop 400 key stations
Ferozepur, February 6, 2017: Indian Railways is planning to kick start its ambitious plan to redevelop 400 key stations in the country through a ceremonial launch program under the aegis of Hon’ble Railway Minister, Shri Suresh Prabhakar Prabhu at New Delhi. On Northern Railway, Faridabad and Jammu Tawi railway stations have been identified to be re-developed, through a synchronized digital launches from the Northern Railway Zonal Headquarters, Baroda House, Copernicus Marg New Delhi and at Divisional Headquarters, Firozpur respectively on 8th February 2017(Wednesday). In keeping with expeditious target achievement, the Railway also plans to invite tender documents the following day of the launch i.e. on 09.02.2017.
The redeveloped stations will provide amenities and services to the passengers in line with world class railway stations. The stations will be redeveloped through public-private-partnership (PPP) model without straining Railways' finances. The redeveloped stations will improve passenger experience by providing amenities like digital signage, escalators / elevators, self ticketing counters, executive lounges, luggage screening machines, walkways, holding areas for passengers, grand and distinctive roofing and flooring, free and paid Wi-Fi etc. The program will benefit more than 100 cities and 16 million passengers per day across the country.
Railway Board has devised an innovative plan to provide these amenities through PPP model by leveraging the real estate available at the railway stations. With an overall size of 1 lakh crore, the program is one of the largest PPP program undertaken in the country. The program will provide 2,200 acres of prime land to the private developers for a 45 year lease period. Commercial potential of this vacant Railway land at/near stations will be leveraged to develop world class stations with no additional funding required from the Railways. The program will also generate surplus for the Indian Railways which can be invested in other modernization projects. Select high potential stations will be made as iconic stations and will be developed as per highest global standards and design norms.
To maximize commercial potential of the public assets, Indian Railways plans to bid out the projects through a transparent and competitive method. Taking cue from global best practices, Indian Railways has adopted the so called “Modified Swiss Challenge” methodology for the bidding process. Under this method, zonal railways will approach the markets soliciting plans and financial models for developing about 400 stations in a phased manner. The best proposal based on a rigorous technical and financial evaluation will be selected as the project proponent. Then it will disclose that proposal to the open market again inviting anyone to better it. If no one betters it, the developer with the proposal gets the contract. If someone matches it, then the developer gets the first right to refuse. And if the market throws up a better offer, Railways is free to accept it. In the interest of transparency, each zonal railway will form a panel of experts to evaluate the proposal. The entire plan got the nod from the Union Cabinet in 2015.
To take the program further in a planned fashion, Indian Railways hired The Boston Consulting Group (BCG) as a strategic adviser for the program. Commercial feasibility assessment was conducted for all 400 stations. Indian Railways also reached out to the private developers and investors through road shows in Delhi, Mumbai, Kolkata, and Abu Dhabi to gauge market interest and receive feedback on the bidding process. Railway Board has also interacted with the zonal railways through multiple workshops to accurately assess land availability. Indian Railways has also developed cost estimates for all 400 stations based on the amenities required at the stations.
Based on the detailed assessment and market feedback, Indian Railways has prioritized about 23 stations in the pipeline for Phase I. As announced by Shri Suresh Prabhu, Hon'ble Minister of Railways, in the launch ceremony of Gandhinagar station redevelopment on 9th January 2017, Indian Railways is ready to launch these 23 major stations for redevelopment. 21 of these stations will be launched on 8th of February 2017. These stations are as follows: Bandra Terminus, Bangalore Cantt., Bhopal, Borivali, Chennai central, Faridabad, Howrah, Indore, Jammu Tawi, Kamakhya, Kozhikode, Lokmanya Tilak (T), Mumbai Central (Main), Pune, Ranchi, Secunderabad, Thane, Udaipur City, Vijayawada, Visakhapatnam, and Yesvantpur. Railways will provide 145 acres of encroachment free land at these stations to the developers on a 45 year lease. Indian Railways has also appointed nodal officers in each zone to ensure smooth interactions with the developers. This phase is expected to be of 13,000 Cr in size. Based on the commercial assessment conducted and several rounds of discussions held with the developers and zonal railways, Indian Railways team is confident that the round will generate sufficient market interest.
These stations are in addition to stations being redeveloped by the Indian Railway Station Development Corporation (IRSDC) through other modes. In addition to Habibganj being contracted to Bansal Pathways under PPP program, IRSDC has inaugurated Gandhinagar station in partnership with the Gujarat state government and invited bids for Bijwasan railway station.
Indian Railways will incorporate learning from the current round of bidding and implement the learning in subsequent phases planned for July 2017 and December 2017. Indian Railways is also taking advisory from BCG on its organization structure and processes to handle the program in a holistic and sustainable manner. The recommendations will be centered on strengthening the organization and processes at both Railway Board and Zonal Railways.