Railways gets ready to land big deals

Source: The Asian Age
By MAYUR SHEKHAR JHA
New Delhi, Feb. 26: Indian Railways is getting real about estate. Lalu Yadav wants to put up for commercial use his department's surplus land assets. In 2008-09, the department plans to invest about Rs 4,000 crore in public private partnerships (PPP) for commercial development. A staggering 43,000 hectares of land, no less, across the country has already been identified for the purpose.
"It makes good business sense for both the Railways, as well as the private developer. Often, this surplus land is around the main stations, bang in the heart of a city, and thus, commands huge value," says DLF group executive director Rajeev Talwar.
India's largest real estate developer plans to bid for PPP projects mainly on the Delhi-Mumbai freight corridor.
"At present, we are bidding for the land around New Delhi railway station. We would make use of opportunities as and when they arise," Mr Talwar said.
The other real estate giant, Unitech, too, is equally keen. "It's a win-win situation for both, the private developer as well as the department. While the company will get access to prime land, commercial use of railways land by Rail Development Authority to give a boost to the department's revenue will prove an important landmark in the history of Indian Railways," says Unitech Managing Director Sanjay Chandra.
For DLF and Unitech, this signals a boost to their ambitious expansion plans seen in their forays in South India, where DLF is already the largest playerin Karnataka and Unitech in Andhra Pradesh.
Delhi-based real estate firm Parsvnath Developers (PDL) has entered into a joint venture with Mumbai-based Indiabulls realty, to explore opportunities on Railway land.
"It could not be better. The budget gives an opportunity to the private sector to participate in the process of nation building," says PDL chairman Pradeep Jain. The PDL-Indiabulls JV has already bid for 10 sites and would jointly be bidding for more projects.
Omaxe is another Delhi-based real estate firm that is aggressively exploring business opportunities in a PPP with Railways.
"Going ahead, PPP will be the buzzword. We are looking at extending our association beyond just real estate, and would look at partnering with the Railways in important construction projects as well," says Omaxe chairman Rohtas Goel. Putting surplus Railway land for development of commercial centres follows the department's earlier initiative of developing budget hotels in PPP on Railway land, which had evinced major interest from almost 50 Indian and foreign hospitality chains. The department has already awarded tenders for development of 21 sites, and is likely to invite tenders for more sites. Of the existing 21 sites, 12 were awarded to Mumbai-based Zoom Motels, 5 to the Essel-group promoted Pan-India Hotels and 4 to US-based Signet Hotels.