Railways fails to monetise vacant land; awards negligible 0.14 pc to developers: CAG

New Delhi, Dec 18 (PTI) Out of a land holding of about 4.88 lakh hectares, the Indian Railways could identify by March 2023 only 13 per cent as vacant land and managed to award a negligible 0.14 per cent of it to developers, according to a report of the Comptroller and Auditor General of India (CAG) tabled in the Lok Sabha on Thursday.

"Alarmingly, none of the awarded commercial sites were developed as of March 2023," the report added, emphasising how the Indian Railways failed in its financial strategy to use its vast land holdings for non-fare revenue generation.

According to the report, the Indian Railways' revenues traditionally come primarily from two sources -- passenger as well as freight traffic. Passenger fares cannot be stretched beyond a point as it affects affordability and inclusiveness while depending entirely on freight earnings is neither prudent nor sustainable.

"In this context, audit has consistently emphasised the importance of non-fare revenue as a critical component of Indian Railways' financial strategy. Among non-fare revenue sources, the monetisation of land assets is particularly significant," the report said.

"Out of a total land holding of about 4.88 lakh hectares with Indian Railways as of March 2023, only 62,740 hectares (13 per cent) was identified as vacant by Indian Railways. Railways managed to award a negligible 87.76 hectares (0.14 per cent of vacant land) to developers," the report said.

The CAG said the Railway Ministry established the Rail Land Development Authority (RLDA) in 2006 to develop and monetise surplus railway land in a professional manner. However, the RLDA failed to achieve the desired outcome, it said.

"Approximately 997.83 hectares (1.59 per cent of entire vacant land) was entrusted to RLDA by MoR (Ministry of Railways) since its inception in 2006 over different phases for commercial development and monetisation," the report said.

"Despite availability of such quantum land, RLDA, as of March 2023, could award only 8.8 per cent (87.76 hectares) of land entrusted to it for development," it added.

It was further noticed that several sites were entrusted to RLDA despite unresolved land title issues, encroachments and other encumbrances, resulting in non-monetisation of such sites.

It identified several systemic and operational deficiencies "which adversely affected timely monetisation of railway land and realisation of non-fare revenue".

The audit observed that out of 188 proposals for commercial sites received by the MoR, only 59 sites were approved and entrusted to RLDA.

"The remaining 129 sites (69 per cent) proposals were still pending for entrustment (as of March 2023) mainly due to non-receipt of mandatory certificates..." the CAG said.

"Importantly, MoR at the time of processing the proposals for entrustment of land should have ensured that the land is free from encroachments and encumbrances," the report added, noticing weak inter-agency coordination within Indian Railways contributing significantly to delays.

Observing failures at multiple levels -- Zonal Railways, RLDA and MoR -- the report said, "In certain cases, audit observed that the land-related issues were identified for the first time by the selected developer after award of the project, reflecting serious lapses in due diligence." The audit further noticed that certain sites were subsequently de-entrusted from RLDA, primarily citing encroachment and encumbrance issues.

"Even in the 87.76 hectares (0.14 per cent of vacant land) awarded to developers, various deficiencies were noticed during course of audit of 26 out of 126 commercial sites and 29 out of 163 MFC (Multi-Functional Complex) sites," the CAG said highlighting several irregularities. PTI JP JP KSS KSS