25.6.08

Railways get more business savvy

After hotels, Indian Railways is now venturing into retail. According to people in the loop, Railway minister Lalu Yadav is actively considering proposals for using prime railway land to develop worldclass retail destinations.The development will take place in a public private partnership (PPP) model, where land will become the basis of equity sharing for Railways in the project. Some companies, including Kishore Biyani's Future group and Sunil Mittal's Bharti Enterprises have given initial proposals .Some areas that the department has initially earmarked for the retail project include prime plots of land in Delhi's Hazrat Nizamuddin area and Mumbai's Bandra Kurla Complex. Subsequently, the department has plans to set up hypermarkets at 40 odd locations in various parts of the country. The department has huge blocks of surplus land assets all through the country.Moreover, these land blocks are located near Railway stations, bang in the middle of cities. It can't get primer.
Railway owns more surplus land in the country than even the land banks of big developers like DLF and Unitech. As per unofficial estimates, the department owns close to 30,000 hectares, excluding some thousands of acres mired in litigations. Though it will be the first brush with retail for Railways, the Delhi Metro Rail Corporation (DMRC) has successfully done it in the recent past. Future group and Delhi-based realty firm Parsvnath developers have bagged significant areas to develop hypermarkets on DMRC land.
Building hotels on PPP was the first significant step by the department to unlock the value of these assets. The department plans to develop 100 budget hotels in PPP with private companies. Of these, contract for 30 sites has already been awarded.The 30 sites, which have already been awarded had attracted interest of marquee names in the hospitality business, including Accor, Radisson, Zoom Developers, Royal Orchid, Pan-India hotels, Indian Hotels, Hyatt and Signet.

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