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Railways to call bids again for Ashok Vihar plot
The Times of India  |  July 26, 2019

Sobia Khan Bengaluru

The Rail Land Development Authority has decided to call bids again for a 27-acre plot in New Delhi’s Ashok Vihar, after scrapping an earlier deal to sell the land to Godrej Properties for Rs 1,100 crore.


The authority, which is responsible for monetising the land held by the Indian Railways, had in March decided to sell the land to Godrej Properties after it won an auction. Under the deal, Godrej Properties was to construct flats, give half of those to the railways free of cost and sell the rest to economically weaker sections at market price. The payment for the plot was to spread over eight years, at an interest rate of 12%.


“The price offered by Godrej was very low, hence the rebidding is being done,” said a senior official from the authority. “The land has much higher potential. It will go for rebidding next month.”


Godrej Properties didn’t respond to an email seeking comment until press time Wednesday.


The other bidders in the March round included the Adani Group and real estate developer Eldeco.


The Rail Land Development Authority (RLDA) is a statutory authority under the Ministry of Railways, set up by an amendment to the Railways Act, 1989. Tasked with generating revenue from vacant land, the authority has lined up six more such plots in the metro cities. It expects to earn about Rs 10,000 crore through land monetisation over the coming years.


“We are in the process of bidding out some land. We are keen to bid as much as possible but the real estate market is unstable,” said its vice-chairman, Ved Prakash Dudeja. The plots include 16 hectares in posh Mumbai areas such as Bandra, Mahalaxmi and the near the Lokmanya Tilak Terminus in Kurla. It also owns land in Chennai and Hyderabad.


“We are awaiting some final notification from the Maharashtra government (on the Mumbai plots). The Chennai property has been bid for already,” said Dudeja. It plans to sell land worth Rs 1,600 crore this financial year. It has already monetising land worth Rs 820 crore, including for a Dharavi rehabilitations project.


In 2017-18, it had generated Rs 41.85 crore by selling small commercial sites. In the same year, it had also got Rs 2,580 crore from IRCON for a site in Mumbai’s Bandra East, entrusted to the railways’ engineering and construction arm for commercial development.


The Indian Railways has tried unlocking its land bank several times in the past few years, but failed to make much progress on the process because of the slump in the realty market. It has identified around 45 sites which have a revenue potential of more than Rs 42,000 crore, to be bid out in phases.


“The entire land is not yet entrusted to RLDA,” Dudeja said.