Indian Railways to fast-track land monetisation; eyes Rs 19,000 cr revenue

The cash-strapped India Railways is looking at land monetisation with renewed vigour. It has set ambitious targets for the under-performing Railway Land Development Authority (RLDA) after suitably empowering it to identify the transporter’s vacant land prone to commercial exploitation. While since its start in 2007 RLDA has generated just over R200 crore by putting rail land into commercial use, it will target R1,000 crore revenue in FY17 and over R19,000 crore over the next five years, according to official sources.

Ending the practice of the Railway Board “allocating” land to RLDA, the transporter’s entire vacant land — estimated at a massive 47,336 hectares — will now be available for the authority to select and commercially exploit. RLDA officials said the authority’s focus will now be overwhelmingly on the transporter’s prime land in metro cities like Delhi, Mumbai, Chennai, Hyderabad and Pune. Each parcel of prime land identified is worth R50-5,000 crore at current market rates.

RLDA now has just 500 hectares at its disposal; while the Railway Board has been niggardly in allocating land to the authority, the latter has failed to expeditiously monetise even the land assigned to it for unclear land titles, refusal of states to change land use norms and lack of encumbrance-free status for large parcels of the land. Last year, RLDA gave back some 400 hectares to the railways after it found it impractical to monetise them; sources said only 30% of its current possession of 500 hectares have all legal entitlements and an encumbrance-free status.

RLDA is set to float tenders for long-term lease (45 years for commercial use and 90 years for residential purpose) of prime land in eight locations in the current year. This includes 4.3 hectares in Bandra East in Mumbai which it plans to leverage for cluster development (a mix of corporate offices, commercial shops and residential housing) near the railway station.