Rail Land Development Authority

The Rail Land Development Authority {रेल भूमि विकास प्राधिकरण} (RLDA) is an Indian government authority for the development of unused railway land. The Indian Planning Commission has estimated a requirement of Rs 2,0272 billion (US$494 billion) as investment in infrastructure during the Eleventh Plan period. Of this, the requirement for Railways is anticipated as Rs 2800 billion (including Rs 300 billion only for the Dedicated Freight Corridor). As much as Rs 2324 billion (83%) of this requirement is expected to be met by investment from the public sector.[1] RLDA has a 49% equity share in Indian Railway Stations Development Corporation.

The need for considerable increase in internal generation of resources for such investment had been realised by the Indian Railways for some time. However, focused efforts in this direction commenced in 2001 when the idea of setting up a special purpose vehicle to generate non-tariff revenues through commercial exploitation of railway land took shape. The efforts culminated in the setting up of the Rail Land Development Authority on 1 November 2006.

Purpose

RLDA is a statutory Authority under the Ministry of Railways, Government of India, set-up by an Amendment to the Indian Railways Act, 1989, for development of vacant railway land for commercial use for the purpose of generating revenue by non-tariff measures. The RLDA (Constitution) Rules, 2007, were laid down on 4 January 2007.

The Executive Board of RLDA consists of Member Engineering/Indian Railways Board as ex-officio Chairman, one Vice Chairman and four Members. Vice Chairman and other Members (except Member/Real Estate) took up their posts in January 2007.

Indian Railways has approximately 43,000 hectares of vacant land. Land which is not required for operational purposes in the foreseeable future will be identified by the zonal railways and the details will be advised to the Railway Board. Such plots of land would then be handed over to the RLDA by the Railway Board in phases for commercial development. The first batch of thirteen sites was entrusted to the RLDA for commercial development by Ministry of Railways in February 2007. Ten of these sites were expected to come up for financial bidding in 2008. By 22 February 2008, 109 plots of land had been entrusted to the RLDA by the Ministry of Railways.[2]

The process

Commercial development of vacant railway land by RLDA generally involves the following steps:

  • Inspection of the sites entrusted by Railway Ministry to ensure that these are free from any encumbrances/encroachments and are prima-facie suitable for commercial development.
  • Getting a survey done for each individual plot of land from a reputable real estate consultant, to identify the potential use of the land to provide maximum revenue.
  • Based on the commercial use decided, to call for an expression of interest/request for proposals from developers for commercial development through the Public Private Partnership (PPP) route, and
  • Selecting a suitable developer based on specific technical and financial parameters, after calling for financial bids from a short-list of developers.

RLDA’s expenses are met out of grants provided by Indian Railways. The entire earnings generated from development of railway land is transferred by RLDA to Indian Railways.

The main objective of setting up of RLDA was to generate revenue by non-tariff measures through commercial development of surplus railway land. Audit reviewed development of 17 sites, which were entrusted to RLDA in 2007 when it was constituted and observed that none of these sites have been developed so far.

As per Report that there were delays in engagement of consultants, delay in submission of reports by the consultants, delay in taking permission from State Government for change of land use, deficiencies in entrustment of land to RLDA by the concerned Zonal Railways by providing encumbered land, identifying wrong site or site with incomplete papers etc. which resulted in nondevelopment of 17 sites of 166.996 acres.

Out of 17 cases reviewed, in only three cases developers were appointed, but commercial development did not take place. In two203 cases, the Development Agreements could not be entered into and Letter of Acceptance had to be cancelled as the first instalment of lease premium was not deposited by the parties and in one204, case the Development Agreement was terminated as the Developer refused to take the land offered by RLDA in exchange of land originally identified by the Railway and railways had to pay back the lease premium of ` 43.12 crore along with interest.

Thirteen of these 17 plots were planned for commercial development with a lease potential of ` 282.69 crore. Since being set up, RLDA has been able to earn ` 67.97 crore from development of Multi-Functional Complexes (MFCs) at railway stations 205, which is other than the earnings from commercial development of entrusted lands. As against this, expenditure of Rs 102.29 crore has been incurred towards establishment, consultancy charges, advertisement etc. during 2006-07 to 2016-17. [3]

References

  1. ↑ Consultation Paper on Projections of Investment in Infrastructure during the Eleventh Plan: Planning Commission (October 2007)
  2. ↑ RLDA Website
  3. ↑ Jatinder, Kaur. "Know The Failure Story of Rail Land Development Authority". ABC Live. Retrieved 22 July 2018.
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