South India, get set for spruced-up railway stations

Despite all the progress India has made over the years, one place most of us still dread to go to is our railway stations. But those nightmares of paan-stained, rickety seats and chaotic platforms may soon belong to the past as the Central government will soon float tenders for modernisation of 23 railway stations, including seven stations in the southern states.

These seven southern stations are Visakhapatnam, Secunderabad, Vijayawada, Chennai Central, Kozhikode, Yesvantpur and Bangalore Cantonment. This modernisation project is related to the Centre’s proposal in 2015 to redevelop 400 stations in the country using a variety of investment models including collaboration with foreign governments, private players and PSUs.

According to the Railways, the modernised stations would have a variety of features, including segregation of the arrival and departure platforms, integration with public transport systems, proximity to leisure and hospitality facilities and scope for future expansion. Railway officials recently told The Times of India that the overall investment needed for the total redevelopment effort would be around ₹25,000 crore.

The financial model for modernising the stations is structured in such a way that the government does not incur any expenditure: The winning bidder will modernise the station in three years and maintain it for 12 more years. The bidder will then get leasing rights for at least 45 years to the commercial sites (such as hotels, eateries and shopping outlets) developed at the station.

These 23 stations that will be modernised are part of the second list of the Centre’s original plan; the initial list included Habibganj (near Bhopal), Surat and Anand Vihar. The Habibganj station is expected to be inaugurated by Prime Minister Narendra Modi in the coming weeks; the developer that is responsible for the modernisation of Habibganj station has incurred a cost of around ₹400 crore.

Earlier this month, the Railways announced plans to focus on non-tariff sources of income. This would include commercial use of railway infrastructure such as setting up nearly 2,400 ATMs at major stations and branding of trains. The initiatives, if realised, could bring in nearly ₹2,000 crore in revenue.

Despite the grand plans and the sheer scale of the opportunity in the rail sector, private players still have much to worry about. Issues with clearances and land acquisitions are a persistent worry as projects typically involve the Central and State governments. Further, the Railways’ “social obligations” (subsidised fares and freight charges and pensions) are estimated to be around ₹30,000 crore annually. These obligations would be a major concern for private players.

• Railways
• FDI
• railway station