Lanco gets ready for Railway Station Bids

Infrastructure developer Lanco Infratech Ltd has inked agreements with four global firms that specialize in operating railway stations so that it can bid for projects to modernize railway terminals in India.The Indian Railways has announced plans to upgrade 22 railway stations in the country in partnership with the private sector.“We have entered into memoranda of understanding with four global railway operators from the UK, China, Malaysia and Singapore,” said Sanjay Divakar Joshi, director of infrastructure at Lanco Infratech, which reported revenues of Rs3,337 crore in the fiscal year to March.
Joshi declined to name the firms “due to competition.” He, however, said the company plans to involve different partners for different projects based upon the criteria that the railways would prescribe. Although the company was keen to work on the modernization of the New Delhi railway station, estimated to involve investment over Rs6,000 crore, it could not submit bids because of frequent changes in qualification norms by the railways, Joshi said.
The railways has invited bids to modernize the New Delhi railway station ahead of the Commonwealth Games the Capital will be hosting in 2010, on the lines of China’s Beijing railway station and US’ New York central railway station. As many as 35 companies including Reliance Infrastructure Ltd, earlier known as Reliance Energy Ltd, Videocon Industries Ltd, GMR Infrastructure Ltd, GVK Power and Infrastructure Ltd and DLF Ltd have expressed interest in modernizing the New Delhi station. While GMR is upgrading the Delhi airport, GVK is modernizing the Mumbai airport and Reliance Infrastructure has taken up the Mumbai metro rail project.
Lanco is now preparing to bid for the other key railway passenger terminal projects.
“We are waiting for the qualification criteria to be announced by the railways for these projects so that we can go ahead with one of the partners that we have arrangements with that meets the criteria,” Joshi said. The company is keen on Secunderabad, Chennai, Bangalore, Jaipur and Patna projects in the first phase and Pune and Ahmedabad in the subsequent phases. “Depending upon the qualification criteria, we may either go ahead with one partner for all the railway terminal projects or different partners for different projects,” the executive said.
While the railways is yet to invite bids for 21 terminal projects and to indicate the capital cost for each of these, Joshi said the company assumes the cost of the other projects in first phase to be in the range of Rs2,500 crore to Rs4,000 crore per station.
Railway minister Lalu Prasad has said his ministry plans to award projects for the New Delhi, Mumbai, Patna and Secunderabad railway stations through global competitive bidding during this fiscal and expects to attract an investment of nearly Rs15,000 crore for these stations.
“Never before in its history had Indian Railways come out with such large infrastructure development projects inviting private partnership. This offers a major opportunity to Indian infrastructure companies after national highway projects in the surface transportation sector,” said Shailesh Kanani, analyst with Mumbai-based brokerage Angel Broking Ltd. “The scope is so large that each and every company can have its piece of the cake.”