User charges for railway stations redeveloped by private companies to be inflation-linked: IRSDC MD
AFP
A larger plan of inviting proposals for redeveloping 50 railway stations at an estimated cost of Rs 50,000 crore, has been envisaged for FY 21.
Synopsis
“When you are giving someone a station for 60 years, it is not fair to give them a charge cast in stone. It must go up or down depending on market realities. So that if inflation increases, there will be a formula for how much it will reflect on the cost,” Sanjeev Kumar Lohia, Managing Director at IRSDC told reporters during an online briefing on Tuesday.
New Delhi: User charges for railway stations redeveloped by private companies will be inflation-linked, and contribute significantly to the revenues of concessionaires, a senior official has said.
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The formula to tweak the user charge based on market conditions will be predefined in the concession agreement and the request for proposal document of a particular project.
“When you are giving someone a station for 60 years, it is not fair to give them a charge cast in stone. It must go up or down depending on market realities. So that if inflation increases, there will be a formula for how much it will reflect on the cost,” Sanjeev Kumar Lohia, Managing Director at Indian Railways Station Development Corporation (IRSDC) told reporters during an online briefing on Tuesday. “Earlier we were only dependent on real estate for revenue, now user charges have also been taken in. This brings in some kind of certainty of revenue,” Lohia added.
IRSDC, one of the government entities responsible for station redevelopment, invited request for qualification (RFQ) for redevelopment of stations in Nagpur, Gwalior, Amritsar and Sabarmati, earlier this year.
A larger plan of inviting proposals for redeveloping 50 railway stations at an estimated cost of Rs 50,000 crore, has been envisaged for FY 21.
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User Charges, along the lines of user development fee charged by airport operators, and included in the price of travel tickets, will be notified by the railway ministry, Lohia said.
Redevelopment work at railway stations in Habibganj, Bhopal and Gandhinagar, Gujarat, are in advanced stages, Lohia said. Both projects are tentatively targeted for completion in December this year.
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Lohia further added that private sector participation in station redevelopment projects has been quite encouraging. Nine companies, including US-based I-Squared Capital, GMR, Kalpataru Group, FairFax, have been shortlisted for redeveloping the Nagpur, Gwalior, Amritsar and Sabarmati railway stations.
