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Realty players gung-ho

india Updated: Feb 26, 2008 22:28 IST
Varun Soni

The railway budget on Tuesday brought cheers to the builder community, which hope to benefit from the government's plan to modernize railway station across country.

Railway Minister Lalu Prasad Yadav announced several public-private partnership schemes that he said would attract investment totaling Rs 1,00,000 crore over the next five years for developing world class stations, rolling stock ad other logistics. He also took forward last year’s step of allowing commercial usage of railway land by the Rail Land Development Authority to boost revenues.

Railways are set to see developers competing with each other for bagging plum developmental projects located on prime land.
Property analysts feel that the Indian Railways is probably the only agency in India that has land to the tune of 25-40 acres each in the heart of major metropolitan cities.

“And if developers get to develop such huge tracts of land, they will get to command the best of rates as railway stations are the epicenters of cities in India. Otherwise getting such large parcels of land is difficult in our crowded urban areas,” said Ashutosh Limaye of Jones Lang LaSalle Meghraj, a real estate consultancy.

Shares of most realty companies ended higher in trading Tuesday.

Rajiv Talwar of DLF termed Tuesday's announcement as a positive move.“This is an excellent revenue generating opportunity, both for the Railways as well as the developers,” he said. DLF is one of the bidders for the upgradation of the New Delhi railway station.

Parsvnath Developers, which recently entered into a tie-up with Indiabulls Real Estate to bid for 10 prime plots being offered by the Indian Railways for commercial development, also hopes to cash in. “This is a good opportunity for developers like us to diversify our business model. It will upgrade infrastructure as well as benefit the common man by providing him with the latest amenities,” said Pradeep Jain, CMD of the company.

Another significant announcement made by Yadav relates to allowing private companies to make terminals on rail land.

“This means that if a developer is certain of the growth potential a particular area, he can bid for developing and maintaining a terminus there. In lieu, he will be provided land – either next to the station or near the railway lines – to be developed commercially,” said Limaye.