Commercial Exploitation of railway land to fund suburban stations
Commercial utilization of land by railways, if done in the most transparent manner,can benefit both the realty sector and the government. Mumbai railways have taken the initiative to undertake commercial utilization of its land in order to generate revenue to revamp the facilities at the suburban stations.
Such an act on the part of the government, has been taken in order to generate revenue by offering various establishments the use of space, which is not being used by the railways. The revenue will be used to improve the suburban stations in and around the city. The Mumbai Railway Vikas Corporation has been endowed with the responsibility to invite bids for the airspace and land near the stations.
Such a move is likely to enable the railways come up with a new revenue stream,since competition from different other means of transportation is likely to chip away its traditional source of revenue.
Role of RLDA
The Railway Land Development Authority is accountable for undertaking the commercial development of the surplus land in India. The authority has identified such sites in Mumbai, covering hectares of land that is not required for operational use in the coming days. Based on the potential assessment and feasible studies, the authority will invite bids from the land parcels to make use of such space in the most efficient manner.
The MRVC and RLDA has also signed an MOU to take the process into the next level and identify the stations requiring redevelopment. MRVC will analyze the possibility of commercial utilization at some prime railway stations in Mumbai, namely Bhandup, Mulund and Thane. One-third of the generated funds will be used to revamp the suburban railway station facilities while the remaining two-third fund will be used by Indian Railways for its use, in and out of the state.
Significance of private developers
RLDA has been following a lease premium model, according to which a selected developer can pay premium upfront or over a designated time frame. The commercial exploitation of the land undertaken by the RLDA, with the assistance of the appointed consultants, is also likely to fund the Mumbai Urban Transport Project-II.
According to market news, RLDA has already appointed developers for the commercial utilization of the unused spaces in possession of Western railways in Bandra and Thane. Such allotment is expected to generate adequate revenue that will aid the restructuring of the suburban stations easily.
Areas for commercial exploitation
The real estate market of Mumbai got an adequate boost after 4500 sq mts. of land in Bandra East has been assigned for commercial exploitation. After proper measurement and demarcation by the Mumbai suburban district collector, the said land was thrown open for commercial utilization.
According to JLL, the fifth and sixth lines between Kurla and Chhatrapati Shivaji Terminus, extension of harbour rail line service till Goregaon, sixth line Borivili and Mumbai Central and other such projects are likely to fund the redevelopment of the suburban railway stations.
Commercial exploitation of railway land which does not have a future utility, is likely to benefit the real estate market of Mumbai significantly. In addition to it, the realty sector will also be able to make use of the opportunities in commercial and residential segments and get benefitted extensively.
