The railway station redevelopment work presents a business opportunity worth Rs 30,000 crore for EPC players over the next two years, said rating agency ICRA.
1,318 railway stations by the Indian Railways are being considered for redevelopment under the Amrit Bharat Station Scheme (ABSS).
Vinay Kumar G, Sector Head, Corporate Ratings, ICRA said, “The competition, in traditional segments like roads and buildings, remains elevated and hence the railway station redevelopment provides business opportunities estimated at Rs 30,000 crore for construction companies to grow and derisk their businesses through diversification. The station redevelopment project awards witnessed moderate competition in the past two years, reflecting maximum discounts of up to 18% and a median discount of up to 4%, and have been similar to other railway EPC projects where the median discount is up to 5%. Indian Railways, being a strong counterparty, the receivable cycle is also expected to remain low and comparable to that of the NHAI.”
Earlier, the Government of India had envisaged majority of the station redevelopment projects under the Public-Private-Partnership (PPP) mode. However, with limited participation in the PPP mode owing to restrictions on pricing, market risk related to real estate development and limited track record of PPP projects in railways, the Government reallocated station redevelopment work on the EPC mode in December 2022.
Uttar Pradesh (149) has the maximum number of stations being taken up for redevelopment under the ABSS, followed by Maharashtra 126, West Bengal 94, Gujarat 87, Bihar 86, Rajasthan 82 and Madhya Pradesh 80. Foundation stones have been laid for 553 stations and a total of more than Rs 20,000 crore of station redevelopment projects has been awarded till date, the report added.
Currently, the key awarded stations under the EPC mode include – Mumbai (Chhatrapati Shivaji Maharaj Terminal/CSMT), Ahmedabad, Surat, Prayagraj, Bangalore Cantt, Chennai Egmore and Secunderabad etc. Furthermore, the awards for 765 stations are pending and some of the key stations like New Delhi, Pune, Borivali, Mumbai Central, Thane, Amritsar etc. are yet to be awarded.
