emerging opportunities in ppp projects for railway ... · pdf fileprojects for railway...

Emerging Opportunities in PPP

Projects for Railway Stations

Redevelopment

The Rail India Conference22nd Jan 2016

PM SHRI NARENDRA MODI ON RAILWAY STATIONS

Thursday, January 28, 2016 2

A WORLD CLASS STATION …


…will provide state of the art facilities to the passengers…

…by leveraging the real estate potential of the land and air space in and around the station.

…will incorporate architecture that shall reflect the culture and the character of the city.

…will integrate development for a comfortable and efficient passenger experience.

…will be self financing and would also generate revenue for railway.

MAIN FEATURES


Iconic Structure

Segregation: Arrival/ Departure

Planning for next 40 years

To act as a multi modal transit hub

Integrating both sides of the city

Energy efficient

Disabled friendly

Enhancing passengers’ delight

STAKEHOLDERS IN STATION DEVELOPMENT


Station

Development

Indian Railway

Tourism Dept

State Govt

City Corporations

Contiguous Landowners

Investors / Developers

Local communities

BENEFITS TO STAKEHOLDERS


Opportunity to create an iconic structure

High brand visibility with benefits for your other business

Enhanced credibility and goodwill

Create a gateway as part of a holistic tourist experience

Rise in property value around stations

Station redevelopment projects are TOD projects in which the central station complex becomes more multifunctional, and

the linkage system is more thematic to satisfy a diversity of needs. Station areas as places for exchange of ideas and

promotion of lifestyle, within a physical framework that incorporates innovations in building and space technology. The

railway stations are in effect becoming nerve centres for the so-called ‘Smart’ city, in which the transportation function

plays a supportive role and no longer a central role.

SWOT ANALYSIS


Ownership of land

Strategically placed

Studied well for implementation

Model under implementation

Real Estate Project – Complex formalities

Competition from upcoming/planned projects in the cities

Volatility in real estate valuations.

Huge potential, growing system

FDI – 100%

Strengths

Threats

Weaknesses

Opportunities

KEY CHALLENGES


Located in congested areas in city centres. Commercial development around these stations may add to the congestion and the capacity of approach road infrastructure may be a constraint.

Extensive discussions with local authorities/bodies: permissible FAR, multi-modal integration, approach infrastructure.

Station specific issues i.e. Heritage clearances etc.

Most stations are brown field ones where redevelopment works have to be executed under running train conditions.

Different financial models required for viability.

Financial viability depends on real estate market which is cyclical in nature.

GLOBAL EXAMPLES


The station’s conversion is part of an urban renewal project centring on the area north of the station. The locus of this project is the renovation of the central station, which now forms the focal point of this area. The new urban complex will comprise an international

congress centre, hotels, housing, offices, public space, etc.

Seoul, South Korea

GLOBAL EXAMPLES


View of Tokyo Station in 2000, before redevelopment Tokyo Station renovation - Marunouchi side, Nov 2009

Tokyo, Japan

GLOBAL EXAMPLES


Tokyo Station Yaesu Side, with the new Grand Tokyo South Tower completed in 2007

The front of Tokyo Station lit up at night, taken from the Marunouchi Oazo side

Tokyo, Japan

GLOBAL EXAMPLES


In St. Pancras, 9,000 square meters (97,000 square feet) of retail space are directly connected to passenger flows. The land between and behind the two stations (St. Pancras & Kings Cross) has been redeveloped with nearly 2,000 new homes, 5.3 million sqft of office

space and new roads as King's Cross Central. The St. Pancras Renaissance London Hotel was opened in 2011.

St. Pancras Station, London, UK

GLOBAL EXAMPLES


Kings Cross StationLondon, UK

Office 3.4 million sq ftRetail 500,000 sq ftHotel 91 rooms 30,000 sq ftResidential 2,000 unitsParking 865 spacesOpen space 26 acresTotal gross building area planned 6 million sq ftTotal site area 67 acres (27 ha)

GLOBAL EXAMPLES


The station redevelopment has been the catalyst for one of the largest regeneration schemes in Europe, attracting £2.2bn of

private investment. 67 acres of brown-field land is being developed into offices (3.4 million sq ft), Retail (500,000 sq ft)

and 2,000 homes.

The project was completed with the revealing of the original station facade and the opening of the 75,000 sq ft King's

Cross Square in front of the station.

Kings Cross StationLondon, UK

GLOBAL EXAMPLES


Kuala Lumpur Sentral (KL Sentral) is a transit-oriented development that houses the main railway station of Kuala Lumpur. KL Sentralreplaced the old Kuala Lumpur railway station as the city's main intercity railway station. KL Sentral refers to the entire 290,000 square metres of development built on the former KTM marshalling yard. The development includes the transport hub, hotels, office towers, condominiums and shopping malls.

Kuala Lumpur Central, Malaysia

OUR STRATEGY


8 stations by IRSDC.

Project development by IRSDC prior to bidding.

400 (A1 & A category) stations on Swiss Challenge method.

Bidding on “as is where is basis”.

IRSDC PROJECTS: METHODOLOGY


Invitation of proposal for ATC

Appointment of Arch & Tech consultant

Appointment of Financial & Bid

advisory consultant

Preparation of Master Plan &

Feasibility report

Approval of Master plan by Zonal Railway

Approval of Master plan by

Local bodies

Invitation of RFQ

Finalisation of RFQ

Invitation of RTP

Finalisation of RTP incl.

Normalization

Invitation of RFP

( Financial Bid)

Finalisation of RFP Issue of LOA

IMPLEMENTATION STRATEGY


Developer

Real Estate Railway Station

Development in 3 yrsO&M for 5 years

Transfer

IRSDC/ Railway

Premium

Lease, Development Rights and Right of Way

IRSDC

The developer will fund the development of station and operation & maintenance for 5 years, using the revenues from real estate.

Developer will transfer station assets to railways and operate the station for 5 years through a O&M contract.

Before completion of station development, developer will not be permitted to earn revenues from real estate.

Develop in 8 yrs maxLease 45 yrs

STATUS OF STATIONS ENTRUSTED TO IRSDC


Station Current Status

HabibganjRFQ and RTP finalisedRFP (Financial Bid) invited on 14.12.2015Award of Development contract by 28.02.2016

Anand Vihar

In-principle approval of Master Plan received from Unified Traffic and Transportation Infrastructure. (Planning & Engineering) Centre (UTTIPEC);Pre application conference held 26.11.15. Ten developers participated.RFQ invited, to be opened on 15.02.2016.

Bijwasan

In-principle approval of Master Plan received from UTTIPECIncrease in height of building from 10.39 m to 21.57 m obtained from Airport Authority of India. Pre application conference – 23.12.15RFQ invited, to be opened on 15.02.2016

ChandigarhIn principle approval of Master Plan received from UT Administration, Chandigarh. Revision of drawings in process.RFQ invitation – Planned in Feb 2016.

STATUS OF STATIONS ENTRUSTED TO IRSDC


Station Current Status

ShivajinagarApplication for approval of Master Plan by local authorities submitted.Heritage clearance obtained.Master plan approval being pursued at Chief Secretary, Govt. of Maharashtralevel.

Surat An Integrated Multi-Modal Hub to be developed duly encompassing Rly’s master plan. SMC and Gujarat State Road Transport Corporation (GSRTC) have appointed their Consultants and their plans are yet to be finalized. Last meeting held at Surat on 08.12.2015 to finalise multimodal plan.

Gandhinagar(RLDA)

Feasibility Report and Master Plan prepared.Planned to construct 300 room hotel over the stationVGF is required

8

REAL ESTATE DEVELOPMENT


Vacant land and air rights

Model Development Agreement (www.irsdc.com)

SPV to be formed for Station Development

Maximum lease period in years

3 years within which station development is to be accomplished

years within which commercial development is envisaged

45

FINANCING MODEL


Self-Financing Mechanism: capital andoperating cost of the project is financed throughthe project revenues and “station facility”revenues.

Project Revenues: revenue from commercial development on vacant land & air rights.

400 STATIONS REDEVELOPMENT - PRESENT STATUS


400 stations on as is where is basis.

General Guidelines issued to Zonal Railways and Standing Groups constituted to facilitate interaction with prospective bidders. (www.indianrailways.gov.in)

List of stations proposed, general data and indicative list of facilities uploaded on Zonal railways website.

Rail Land Development Authority (RLDA) has appointed a consultant for preparation of Model tender document. Uploaded for stakeholders’ consultations in December 2015.

IRSDC entrusted to appoint a consultant for providing Strategic / transaction Advisory Services for this project; Bids to be opened in Feb 2016.

http://www.indianrailways.gov.in/

“SWISS CHALLENGE” METHODOLOGY


Seeking initial proposal

Submission of Proposal

Examination by STC

Examination by SFC

Examination by ICEE

Approval from GM

Submission of detailed proposal

Normalization & Inviting open

bids

Submission of proposals

Bid evaluation

Time for matching

highest bid

Award

REAL ESTATE DEVELOPMENT


Land cannot be mortgaged: ownership always with Railways

Commissioning of Commercial Development: after commissioning of station

development

Advance Marketing: permitted through Escrow mechanism

No residential development permitted

Welcome to partner in

world’s largest TOD and

PPP programme

For more informationContact

A.K. Sachan – 9958293657, 011- 23383254, [email protected] Agrawal – 9958293475, [email protected] – 9560595050, email- [email protected] & [email protected]

Habibganj (Bhopal)


Anand vihar


Bijwasan


Chandigarh


Shivaji Nagar (Pune)


Surat


Gandhinagar


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