The move is part of the land monetization plans by the Rail Land Development Authority (RLDA), which is responsible for the redevelopment and commercial exploitation of surplus land. The authority has been entrusted with 119 commercial sites for development, of which bids for 35 with a lease value of ₹2,835 crore have already been awarded.

“The plan is to accelerate the leasing of balance sites, some of which are in prime land in metros and other large cities and near places of tourist interest, so as to complete the process in FY25. Commercial leasing of this land would allow railways to get annual lease rent over the full period of the lease that could vary between 45 years, 60 years and 99 years,” said one of the two people cited above, requesting anonymity.

To put this in perspective, the railways managed asset monetization worth only ₹133 crore in FY21, followed by ₹655 crore in FY22 and ₹3,000 crore in FY23. According to the person cited above, commercial development of prime land parcels is a quick and efficient way of monetizing railway assets and is popular with private sector developers. This method is also important for railways which has been slow to monetize assets among infrastructure sector ministries.

A query sent to a spokesperson for the railway ministry remained unanswered.

The National Monetization Pipeline announced by the government in 2021 proposes to monetize ₹6 trillion of government assets over a five-year period ending FY25. For railways, the monetization target has been kept at over ₹1.5 trillion, but it has managed to achieve little in the past two years. Rail land development and commercial development of land parcels have so far emerged as the only vehicles for monetization, as station redevelopment, monetization of tracks on freight corridors and running of private trains are yet to take off. Also, the plan to have an Infrastructure Investment Trust in railways has not worked out either.

Updated: 18 Aug 2023, 10:57 PM IST