In an endeavour to generate revenues by developing the surplus and unused railway land for commercial use, the Ministry of Railways had established the Rail Land Development Authority (RLDA) in 2007. At present, the organisation has been able to bid out only two plots, one in Bengaluru and the other in Gwalior, Madhya Pradesh.

Of late, RLDA has once again decided to bid out the 15.5-hectare (ha) plot at Sarai Rohilla in New Delhi. For this, it organised a pre-bid meeting on January 23, 2010 to understand the current market mood.

“Of the total 36 developers who registered for the interactive meeting, 30 reputed realty firms such as DLF, Sunil Mantri Realty Limited, Parsvnath Developers and Ackruti City attended the event. The response received from these players was extremely positive,” says P D Sharma, member of planning infrastructure development (PID), RLDA. Mr Sharma further added that it plans to upload the request for qualification (RFQ) document by February 3 and tentative date for submission of the same will be March 10. The final bidding is likely to be opened by mid-April this year.

The 15.5-ha plot was initially awarded to the New Delhi-based ABW Infrastructure Pvt. Ltd, which failed to fulfill the commitments, thereby compelling RLDA to cancel the bid.

Observations

In view of the current capital crunch due to the economic meltdown, RLDA plans to keep the valuations attractive for the realtors this time, says Jones Lang LaSalle Meghraj, a global property consultant and one of the advisors empanelled by RLDA. In the last auction, the winning bid stood at around Rs 1,026 crore.

CB Richard Ellis, another global real estate consultancy firm, is of the view that RLDA has taken the right decision to bid out the Sarai Rohilla project now as the market is improving leading to positive sentiments as against last year.

“We are looking forward to the plot because being a railway property it will help us secure a clear title for such a big chunk of land in a prime location like Sarai Rohilla in New Delhi,” says Ranjit Rane, general manager for land acquisition, Sunil Mantri Realty Limited, a leading realty firm in Mumbai. Mr Rane further added that if we win the bid then it will considerably help us in maximising our profitability.

Considering the suggestions from the bidders, RLDA has increased the floor area ratio (FAR) from 1.67 to 2. Besides, it also intends to bring about some change in the bidding criteria this time, especially in case of upfront payments.

Jeeta Bandopadhyay