The Rail Budget proposes aggressive commercial exploitation of the vacant railway land. Making the announcement, rail minister Mamta Banerjee said her ministry would come out with specific innovative ideas for utilisation of railway land for commercial purposes under the PPP (public private partnership) mode.

The minister acknowledged that the economic slowdown has had an impact on the revenues from the commercial exploitation of land. “Revenues expected from the commercial utilisation of surplus railway lands did not materialise. The primary cause for these shortfalls appears to have been the economic slowdown,” said Mamata Banerjee in her railway budget speech. The minister has, however, pegged the target for sundry earnings at Rs 2,760 crore in the current financial year. This includes revenue from commercial exploitation of vacant railway land for the year.

“High growth in sundry earnings primarily depends on the revival in the real estate market and the ability of the railways to successfully tap this market through commercial exploitation of surplus railway land. The Rs 2,760 crore target would be surpassed once the above two are fulfilled,” the minister said.

Commercial exploitation of vacant railway land is not a new concept. The railway land development authority (RLDA) was constituted in 2006-07 for the purpose. But soon after the RLDA was constituted the real estate market went into a slump and it could not have much success in attracting the private developers.

However, the renewed focus on vacant railway land and the plan to fast track its commercial exploitation has been welcomed both by consultants and real estate developers. RLDA estimates that the Indian Railways have around 43,000 hectares of vacant land. “We have identified 50 locations around the country for commercial development,” said railway board chairman S S Khurana. He did not divulge the locations or the timeframe for the development of those sites.

“Notification of the land’s location, its size and kind of projects that would be allowed to be developed will be the key to attracting developers,” executive director of real estate consultancy Cushman & Wakefield Kaustuv Roy told Financial Chronicle. Roy said land near the metropolitan cities and state capitals would attract maximum investment wherein projects in retail, hospitality and offices could be developed. Agreed chairman of Parsvnath Developers Pradeep Jain, who is also the president of the confederation of real estate developer's associations of India (Credai-NCR): “This is a welcome move which will attract investments from real estate developers.”

However, president of Feedback Ventures' infrastructure advisory division Akhileshwar Sahay said that intent should be followed up with right actions and a clear road map. “The Railways should use its vacant land for perpetual earning rather than outright sale to generate cash only for once,” he said.