Indian Railways plans to lease land parcels spread over 1,500 hectare (3,700 acre) in the next two-three years to earn more than Rs 5,500 crore, a senior official told ET.
"We have identified 52 cities where railways has surplus land parcels that can be leased out to boost non-tariff revenues," said AK Gupta, member of real estate and urban planning at the Rail Land Development Authority (RLDA).
The move comes shortly after the Vijay Kelkar panel on fiscal consolidation recommended that various government entities should monetise surplus land parcels.
The RLDA, set up by the ministry of railways for undertaking commercial development of surplus land, has identified 136 sites across the country covering 1,504 hectare, which is not required for operational purpose in the near future. Of these, the RLDA is likely to invite bids for 52 land parcels soon based on the feasibility studies and potential assessment that is being undertaken. These plots are spread over cities including Bangalore, Chennai, Raipur, Siliguri, Visakhapatnam and Vijaywada.
The RLDA has so far fixed developers for five sites, including one each in Bangalore, Gwalior, Gaya, Sarai Rohilla in Delhi and Vijaywada in Andhra Pradesh, and it is expected to generate revenue of Rs 1,714 crore through this. The land is leased for a period of 30-45 years, except for the Sarai Rohilla site, which has been leased for 90 years for residential development.
The authority has been following a lease premium model, under which the premium is paid by the selected developer either upfront or spread over a period of time. It is now also looking at revenue sharing model for future projects if the returns through this model look more favourable, Gupta said at FICCI's annual real estate summit in Mumbai.