The commercial development of railway land in Mumbai has hit a roadblock with the city-based railway officials overseeing land development saying that private developers are not finding the 45-year lease period given by the railways enticing.
Officials said that the general consensus among city-based developers was that the land lease should be either 80 years or 99 years so that the project could be made viable.
Talking to dna, Pankaj Kapoor, managing director, Liases Foras, said, "The 45-year lease is a dampener and makes the property less marketable. Moreover, current land valuation in Mumbai is so high that unless the Floor Space Index is increased, projects can't be viable to the developer. It is these issues that the government has to look into."
The latest casualty has been the 43,000 square metre plot in Bandra East which found no takers when bids were called in last month. For the moment, Railway Land Development Authority (RLDA) officials told dna that there was no immediate plan to put the plot back on the selling block again.
"In the railways, firstly, there is absolutely no policy on whether residential complexes can be made on railway land. In Mumbai more than commercial property it is residential property that is bringing in money.
Secondly, a lease of 45 years means many developers are unsure of whether they will be able to recover their investments and make profits. In fact the RITES report on the Churchgate-Virar elevated corridor had recommended even residential development of land for the private concessionaire in order to make the project more attractive to private firms," said a senior city-based railway official.
In May, the RLDA mandated to develop vacant railway land had called in consultants to evaluate plots at Mahalxmi, Wadala and Kurla Terminus. A senior RLDA official told dna that the tenders for these plots had been opened and the consultant would be in place in a few weeks time.
Officials agreed that the state-railway fight over the ownership of the Bandra plot as well as disagreement on issues pertaining to FSI in the Churchgate-Virar elevated corridor would cast a shadow on fresh forays into railway land development.
Moreover, the issue of the duration of lease would continue to hang on these projects because changing the duration of lease is an executive decision that requires the Railway Board as well as other ministries of the Union government to take a call.
Virender Kumar, general manager, projects, RLDA told this paper that as of now the railway policy is to have a maximum lease period of 45 years and there was no immediate plans to do a rethink on it.
With ticket revenues and advertisements unable to bring in the desired revenue for the railways, land development is the big idea that railways believe will bring in the much needed moolah. For the commuter it means new projects and completion of long-pending ones. Under railway rules, any land that gets developed this way, the money break-up is such that one-third of the money gets spent on Mumbai, another one-third on any railway project in Maharashtra and the third part in any railway project nationwide.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}