Gati Shakti: Long Term Leasing Of Rail Land Given The Green Signal

The Union cabinet has approved the Railway Ministry’s proposal to revise the railways' land policy to implement PM Gati Shakti framework which includes cargo related activities, public utilities and the railways' exclusive use.

This is aimed at bringing more cargo and also increasing the railways' share in loadings.

Besides attracting more freight, this move will help reduce logistics cost of the industry and is expected to bring more revenue to the railways.

According to the railways, this will simplify approvals for utilities as envisaged in PM Gati Shakti Programme.

The amended policy will help in development of public utilities like electricity, gas, water supply, telecom cable, sewage disposal, drains, optical fibre cables (OFC), pipelines, roads, flyovers, terminals, regional rail transport, urban transport etc, in an integrated manner.

It will enable generation of about 1.2 lakh jobs.

Financial Implications

No additional expenditure will be incurred. Liberalising the land leasing policy would open avenues for all stakeholders/service providers/operators.

This will help in establishing more cargo related facilities and render stakeholder participation in generation of additional cargo traffic and freight revenues to the railways.

Benefits

This policy amendment will enable employment generation potential of about 1.2 lakh employment.

Details

The revised railways’ land policy will enable integrated development of infrastructure and more cargo terminals.

It provides for long term leasing of railway land for cargo related activities for a period up to 35 years at 1.5 per cent of market value of land per annum.

The existing entities using railway land for cargo terminals will have the option to switch to the new policy regime after a transparent and competitive bidding process.

Three hundred PM Gati Shakti cargo terminals would be developed over next five years and about 1.2 lakh jobs would be generated.

This will increase modal share of rail in freight transportation and reduce overall logistics cost in the country.

The policy also simplifies the railways’ land use and right of way (ROW) for integrated development of public service utilities like electricity, gas, water supply, sewage disposal, urban transport etc by providing railway land @ 1.5 per cent of market value of land per annum.

For optical fibre cables and other smaller diameter underground utilities, a one-time fee of Rs 1,000 will be charged for crossing railway track.

The policy provides for use of railway land at nominal cost for setting up of solar plants on railway land.

The policy also encourages development of social infrastructure (such as hospitals through PPP and schools through Kendriya Vidyalaya Sangathan) on railway land at a nominal annual fee of Re 1 per square metre per annum.

Implementation Strategy And Target

Comprehensive policy document will be framed and implemented within 90 days of cabinet approval.

The approvals for setting up utilities envisaged under PM Gati Shakti Programme will be simplified.

About 300 PM Gati Shakti cargo terminals would be developed over the next five years.

Background

The railways’ organisation and network spans the entire country. However, the railways with its existing land policies could not integrate well with other modes of infrastructure.

Thus, a need was felt to streamline and simplify railway’s land lease policy to enable faster integrated planning and development of infrastructure across the country under the PM Gati Shakti framework.

Extant policy permits licensing of railway land for a short period up to five years for any railway related activity. Such a short-term licence period does not attract any serious investors for creating multimodal cargo hubs.

Long term leasing of railway land up to 35 years is allowed for leasing government land mainly to public sector undertakings (PSUs), thereby limiting the scope of investments in cargo terminals.

Since rail is an efficient mode of transport it is essential to have more freight by rail so as to reduce the logistics cost of the industry.

To enhance the modal share of rail in freight transportation, a need has been felt to modify the land leasing policy to encourage development of more cargo terminals.