Cabinet Okays Amendment To Railway Land Policy, Lowers Land Licence Fee To 1.5%; Know Details

In a much-awaited decision amending the Railway Land Policy, the Union Cabinet on Wednesday lowered the railway land licence fee (LLF) from 6 per cent to 1.5 per cent. It also raised the lease period from 5 years to 35 years.

While addressing a Cabinet briefing on Wednesday, Union Minister Anurag Thakur announced that the amendment to the Railway Land Policy has been cleared. He also said that in the next five years, over 300 PM Gati Shakti cargo terminals will be developed.

He said that with employment generation potential of about 1.2 lakh jobs, the policy will also bring more revenue to Railways. He also said raising the tenure of land lease will help develop more cargo terminals and attract more investors.

On the financial implications, an official statement said, “No additional expenditure will be incurred. Liberalizing the land leasing policy would open avenues for all stakeholders / service providers / operators to establish more cargo related facilities and render their participation assisting in generation of additional cargo traffic and freight revenues to Railways.”

The move will also make the privatisation of Container Corporation of India (CONCOR) more attractive. Interested investors in CONCOR had earlier conveyed to the government that the land licensing fee was very high. They also urged the government to increase the lease tenure.

The latest move will help strategic buyers pay much lesser amounts as land rentals to Indian Railways for a longer period. This was one of the key suggestions by the investment advisors of CONCOR.

The official statement released on Wednesday said the revised Railways Land Policy will enable integrated development of infrastructure and more cargo terminals. It also provides for long-term leasing of railway land for cargo-related activities for a period up-to 35 years at the rate of 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 transparent and competitive bidding process. Over 300 PM Gati Shakti cargo terminals would be developed over next five years and about 1.2 lakh employment would be generated. This will increase modal share of rail in freight transportation and reduce overall logistics cost in the country,” it said.

It also said the policy also simplifies 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 at 1.5 per cent of market value of land per annum.

“For Optical Fibre Cables (OFC) 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 Sangthan) on railway land at a nominal annual fee of Re 1 per sqm per annum,” it said.

The Cabinet in November 2019 had approved the disinvestment of the government’s 30.8 per cent shareholding in CONCOR, along with transfer of management control. DIPAM aims to get Rs 8,000 crore from the 30.8 per cent strategic sale of CONCOR.

Shares on Container Corporation of India on Wednesday surged 8.58 per cent, or Rs 57.45, to close at Rs 726.65 apiece on the BSE.

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