Rail Land Development Authority, a statutory authority established by Ministry of Railways for generating non-tariff revenue from railway land, today announced appointment of private developers for development of Multi Functional Complexes (MFCs) at five stations namely, Cuttack, Dehradun, Jhansi, Katra and Nanded. This is the first time that MFCs are being developed through private investment. Indian Railways operates more than 7000 stations across the country.
Indian Railways have introduced the concept of MFC at Railway stations beginning year 2009-10 for developing facilities for rail users at one centralised complex. This is to improve and upgrade the existing amenities for the rail users in cities having tourist and religious importance by way of developing the land/air space at railway stations. MFCs will be developed to provide rail users with facilities such as shopping, food stalls/ restaurants, book stalls, ATMs, medicines and variety stores, budget hotels, parking etc.
In the first phase of the project announced in year 2009-10 development of 48 MFCs were started by RLDA jointly with three railway PSUs- IRCON, RITES and RVNL whereas six MFCs at Cuttack, Dehradun, Jhansi, Katra, Nanded and Ujjain were proposed to be developed through private parties. 86 MFCs will be developed by RLDA across the country through private parties as part of the second phase of the MFC project announced in the Railway Budget in year 2010-11. Bidding for the second phase is to be initiated shortly.
Multi Functional Complex project offers a unique opportunity for retailers, hotel chain operators, developers and other such stakeholders for expanding and enlarging their footprint across hundreds of important towns and cities in the country. The selected railway stations will provide assured footfalls and wide exposure in the heart of town/ city. Carefully selected railway land generally in the range of 1,000 Sq.m. to 3,000 Sq.m. at the station with passenger interface is identified for development of MFC.
Bids are invited in a combination of one time Lease Premium and Annual Lease Rent and bidder offering highest present value of all payments at a discount rate of 15% is selected. The developer winning the bid would get railway land on 45 years lease and shall have to develop phase-I of the MFC of a minimum built up area of 200 Sq.m. within a short period of 9 months. Multi Functional Complexe is a win-win model for Indian Railways, rail users and developers.
Indian Railways get passenger facilities developed at no cost to Government and further gets additional present and future revenues, rail users get better facilities in the shortest period of time and developers get assured market and opportunity for developing such project at large number of railway stations across India. The MFCs so developed will be part of the railway operational buildings and will be transferred back to the railways once the lease period ends.
RLDA had appointed Knight Frank India as marketing consultant for the first six MFCs to be developed through private parties. Out of the six MFCs, five MFCs were awarded to M/s Keshari Estates Pvt. Ltd (Cuttack), M/s Janak Holdings (Dehradun and Nanded), M/s Bhagwati Infraestate Pvt. Ltd. (Jhansi) and M/s MGC Estates (Katra). RLDA did not accept the bid for Ujjain being below expectation due to certain existing constraints in the approach road to the site.
A total of 15 bidders submitted 28 financial bids. The total present value of the Lease Premium and Annual Lease Rent received for 5 stations in response to the open competitive bidding is Rs. 27.61 crore which is much higher than the pre-bid expectations. Ujjain MFC will be put to re-bidding after getting the constraints removed.
Rituraj Verma, National Director – Retail Agency, Knight Frank India said, “RLDA tendered 6 stations namely Ujjain, Nanded, Jhansi, Katra, Dehradun and Cuttack on a pilot project. Mumbai’s real estate developer Sumer Group, Retail giant – Future Group were some of the companies that participated in the auction. The auction recorded 28 bids from 18 bidders. The total net value from the lease rentals received for 6 stations is Rs. 29.79 crore which is almost 20% higher than pre-bid expectations.”
With the tremendous success of the pilot project of bidding for 5 MFCs, RLDA plans to invite bids for 86 more MFCs at railway stations across India very soon and all these MFCs are targeted to be awarded this year. Several important sites for commercial development of surplus railway land including 4.5 ha. at Bandra, 3.3 ha. at Aurangabad, 2 ha. at Jamnagar, 2.2 ha at Chennai, are also expected to be awarded this year by RLDA.
Source - Indiainfoline