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User charges at modern, redeveloped railway stations to be market driven: IRSDC

Earlier, the Railways had said that private players who redevelop these stations will levy airport-like fee, included in ticket fares, on passengers for these stations which will be included in ticket fares.

August 25, 2020 / 04:21 PM IST

Passenger user charges on redeveloped, modern railway stations will be market-driven, a senior official of the Indian Railways Station Development Corporation (IRSDC) said on Tuesday.

Earlier, the Railways had said that private players who redevelop these stations will levy airport-like fee, included in ticket fares, on passengers for these stations which will be included in ticket fares.

These charges, they had said, will depend on footfall at stations.

However, IRSDC MD and CEO SK Lohia said on Tuesday these charges cannot be cast in stone.

¨Expenses can go up and even deflation can happen. So charges cannot be cast in stone. If we are giving a station to someone for 60 years, the charges have to be in tune with market realities. Tomorrow if there is deflation, then charges can come down also,” he told a press conference.

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¨User charges have been agreed upon and the process to notify it by the ministry is on. There is a certainty of revenue from user charges. Whether it is airports or highways, the user charges are a very big component. In fact 99 percent of the project cost is funded by it,” he said.

In the Railways, he said, the user charges will be less compared to airports given the reality of passenger profile.

The User Development Fee (UDF) is a part of the taxes that are paid by an air passenger. The UDF is charged at various airports and its rate varies based on various factors.

The user charge may be collected from passengers while booking tickets on the line of airports.

The government is set to invite bids to redevelop 50 stations through the Indian Railway Station Redevelopment Corporation Ltd (IRSDC), entailing an investment of around Rs 50,000 crore in 2020-21.

The IRSDC, which had earlier handed over two railway stations -- Habibganj in Madhya Pradesh and Gandhinagar in Gujarat -- to private parties for development under public-private partnership plans to complete both by December 2020.

While 94.05 per cent civil work has already been completed at Gandhinagar railway station, the project at Habibganj is now 90 percent complete.

Additionally, engineering, procurement and construction contracts have been awarded and commercial tenders floated for development of three stations – Anand Vihar, Bijwasan and Chandigarh.

Requests for Qualification were invited in December 2019 for developing Amritsar, Nagpur, Gwalior and Sabarmati stations, and 32 applications were received till June 26, 2020, out of which 29 shortlisted.

The IRSDC has also taken up five stations for developing integrated facility management and 90 more are in the pipeline.

The modernisation of stations includes developing/re-developing the new/existing railway stations and upgrading passenger amenities by new constructions/renovations.

It allows re-development of the station buildings, platform surfaces, circulating area to better standards so as to serve the need of the passengers.

Under the current plan, a private player will get 60 years license of the station area and build area on lease while for residential development, the lease period will be 99 years.

Lohia also said the Ministry of Environment, Forest and Climate Change has clarified that station development projects with commercial development are exempt from prior environment clearance, subject to terms & conditions

Later at a webinar organised by the PHD Chamber of Commerce and Industry on "Business Opportunities with Indian Railway Stations Development Corporation", Lohia said the details of the user charges will be part of the RFP for the four stations which will be issued this month or by the next month.
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