New Delhi (ABC Live): Rail Land Development Authority :The main objective of setting up of Rail Land Development Authority was to generate revenue by non-tariff measures through commercial development of surplus railway land.
As per Information with ABC Live the development of 17 sites, which were entrusted to Rail Land Development Authority in 2007 when it was constituted and observed that none of these sites have been developed so as per information 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, reviewed in Audit. Out of 17 cases reviewed, in only three cases developers were appointed, but commercial development did not take place.
In two 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 one 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, which is other than the earnings from commercial development of entrusted lands. As against this, expenditure of `
102.29 Crore has been incurred towards establishment, consultancy charges, and advertisement etc. during 2006-07 to 2016-17.
Rail Land Development Authority (RLDA) is a statutory authority under the Ministry of Railways. It was set-up188 by an amendment to the Railways Act, 1989, for the development of Railway land, as entrusted by the Central Government for commercial use and for the purpose of generating revenue by non-tariff measures. The main functions of RLDA are
- to prepare scheme(s) for use of railway land in conformity with the provisions of this Act,
- (ii) to develop railway land for commercial use as may be entrusted by the Central Government for the purpose of generating revenue by non-traffic measures
- to develop and provide consultancy, construction or management service and to undertake operation in India in relation to the development of land and property
- to carry out any other work or function as may be entrusted to it by the Central Government, by order in writing. Commercial development of vacant railway land by RLDA involves the following:
- Inspection of the sites entrusted by Railway to ensure that these are free from any encumbrances or encroachments and suitable for commercial development.
- Appointment of real estate Consultant to get the survey of each plot of land for its valuation and to identify the potential use of the land to provide maximum revenue.
- Calling for an expression of interest/request for proposals from developers for commercial development through Public Private Partnership (PPP)
- Selecting a suitable developer based on specific technical and financial parameters, after seeking financial bids from shortlisted developers.
Executive Board of RLDA consists of Member Engineering at Railway Board as ex-officio Chairman, one Vice-Chairman and four Members i.e. Member/ Finance, Member/ Planning, Rail Traffic Co-ordination, Member/ Planning, Infrastructure Development and Member/Real Estate and Urban Planning.
Each member is assisted by a General Manager, Joint General Manager and other subordinates. Ministry of Railways provides grant to meet the administrative and establishment expenses189 of RLDA.
The entire earnings generated from development of railway land are transferred to the Ministry. Audit conducted this study to assess the extent to which RLDA was able to achieve its main objective of development of railway land for commercial use to generate revenue by non-tariff measures.
Indian Railways had entrusted 49 commercial sites190 to Rail Land Development Authority during the period from 2007 to 2017. Out of 49 sites, Eight sites were found encumbered i.e. proper land papers were not available for some of them, there were encroachments on some of the sites, in respect of some sites there were litigation going on or State Government clearance were pending in some cases.
- One site at Jaipur in NWR was proposed for de-entrustment to Railway Board, as NWR had proposed the construction of Holiday Home on the subject land.
- The remaining 40 sites (covering total area of 498 hectares) were found commercially viable as on 31 March 2017. Out of these 40 sites, developers were short listed/fixed in six sites located at Gaya, Bangalore Platform Road, Daba Gardens Visakhapatnam (Ambedkar circle), Vijaywada, GolakaMandir, Gwalior and Old Steam Loco Shed, Sarai Rohilla, Delhi. However, o Development Agreements could not be entered into and Letter of Acceptance had to be cancelled in respect of two sites viz. Daba Gardens (Ambedkar circle)/Visakhapatnam (April 2017) and Vijaywada (August 2017) as the first instalment of lease premium was not deposited by them.
- In respect of one site at Gola ka Mandir/Gwalior, the Development Agreement was terminated (11 April 2012) 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.
- Three sites at Old Steam Loco Shed, Sarai Rohilla/Delhi, Gaya and Bangalore Platform Road were under litigation since 19 September 2013, 11 May 2015 and 15 January 2016 respectively. At the end of 2016-17, an amount of ` 1,189.89 crore was collected as lease premium from these three sites.
- In respect of site at Gaya, the developer failed to complete the work in extended period of completion and RLDA issued notice for intention to terminate the agreement. The developer moved to Court seeking relief.
- In respect of sites at Sarai Rohilla and Bangalore, the developers failed to pay the third/fourth instalment of the lease premium and obtained stay against encashment of bank guarantee by RLDA. RLDA terminated the agreement as the project was not completed within the targeted date of completion.
- Consultancy/valuation/commercial bids etc. were in-progress in respect of 37 sites, excluding three cases under litigation.
- Thus, none of the commercial sites entrusted to RLDA has been fully developed so far, even after 10 years. Audit reviewed the position of development of 17 selected sites (plots of land). These were entrusted to RLDA in year 2007 by Railways for development. Three sites191 were kept out of the purview of the study as the same were under litigation since September 2013, May 2015 and January 2016 respectively.
- Details of these sites and the current status of development of lands are with ABC Live Research Team.
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
