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WELCOME

WELCOME. EARNINGS FROM NON-CONVENTIONAL SOURCES - RAILWAY LAND Presentation by V.Natarajan, ADEN(HQ)BCT. SOURCES OF EARNINGS FROM RAILWAY LAND. Licensing of Railway land for grow more food Sale of grass rights, fruits rights & Fishing rights Sale of dry & mature trees

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WELCOME

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  1. WELCOME

  2. EARNINGS FROM NON-CONVENTIONAL SOURCES- RAILWAY LANDPresentation byV.Natarajan,ADEN(HQ)BCT

  3. SOURCES OF EARNINGS FROM RAILWAY LAND • Licensing of Railway land for grow more food • Sale of grass rights, fruits rights & Fishing rights • Sale of dry & mature trees • Licensing of Railway land. - For Teh Bazari and shopping purpose - To oil companies - For private sidings - Commercial plots for stacking & storing - For other purposes

  4. SOURCES OF EARNINGS FROM RAILWAY LAND • Commercial exploitation through property development by long time leasing • Long time leasing of Railway land to state Govts • Way leave facilities & easement rights • Leasing of infrastructure facilities in microwave stations • Afforestation of Railway land by Railway state forest department

  5. SOURCES OF EARNINGS FROM RAILWAY LAND • PlantationAfforestation on Railway land on commercial lines • Commercial publicity along track & LCs • Leasing of Railway assets to Railway PSUs like IRCTC, RAILTEL, IRCON, CCI etc..

  6. EARNINGS OF BCT DIVISION FROM LAND IN LAST FIVE YEARS IN CRORES OF RUPEES

  7. GROW MORE FOOD

  8. GROW MORE FOOD • Surplus Railway land is licensed to Gr.C & D staff of Railway with preference to SC/ST and weaker sections of society in urban areas to prevent encroachment as well as to grow more food. • Generally size of plot should be 1 to 3 acres. However size up to 5 acres can be permitted. • Employees with balance of less than 5 years service should not be considered. • Initial license period should be 2 years and to be finalised by division and subsequent extensions can be done by ADENs subject to maximum license period of five years.

  9. GROW MORE FOOD • License fees to be fixed based on revenue generating potential and should be between 1/4th to 1/3rd of revenue expected and to be decided by DRM in consultation with Sr.DFM (Present rate is Rs.1100 per acre per annum) • License fees & security deposit to be recovered in advance and to be revised every year. • Agreement to be signed with employees. Around 60 employees have been allotted plots on suburban section yielding a revenue of Rs.1.00 lacs per year. • Register to be maintained in IOW/ADEN’s office of details of plots, to whom licensed, extensions granted, license fees recovered etc.. and ADENs to ensure that registers are up to date.

  10. SALE OF GRASS RIGHTS, FRUITS RIGHTS, FISHING RIGHTS ETC..

  11. SALE OF GRASS, FRUITS, FISHING RIGHTS ETC. • As per powers delegated under para 31(a) of SOP Part`E’, JA grade Officers have full powers for sale of usufructary rights for grass cutting, grazing, fruit gathering, Pisiculture, agriculture etc.. through sealed tenders or auction. • There are around 75 coconut trees in suburban section for which earnings of around Rs.25,000- per annum are realised from fruit rights in section of Horticulture Superintendent -BCT • Two tenders are usually awarded for grass rights – one under ADEN-DRD and other under ADEN-BL’s section. • Further scope for sale of such rights can be identified by other ADENs also.

  12. SALE OF DRY ANDMATURED TREES

  13. SALE OF DRY AND MATURED TREES • Matured tree is the stage at which the tree gives maximum yield of timber. • Harvesting of dry and matured trees on Railway land can be done by invitation of open tenders for which powers are delegated in para 31(b) of SOP Part`E’ is as under:- AGM - Up to Rs.5.00 Crores PCE - Up to Rs.3.00 Crores THODs - Up to Rs.1.00 Crores SAG officer other than DRM/ADRM - Up to Rs.0.75 Crores DRMs - Up to Rs.0.75 Crores ADRMs - Up to Rs.0.40 Crores JA grade officers - Up to Rs.0.20 Crores Sr.Scale officer - Up to Rs.0.05 Crores (However the invitation of first ten tenders require CE’s approval)

  14. SALE OF DRY AND MATURED TREES • Harvesting of matured trees requires the permission of state governments. In protected forest area, approval of forest department is mandatory. • Some times contractor’s find it difficult to get permission from state government/ forest department for cutting & carting the trees. These trees can also be disposed through state government agencies like forest development corporations at approved rates. • To ensure ecological balance, three saplings should be planted for every matured tree disposed

  15. LICENSING OF RAILWAY LAND

  16. LICENCING OF RLY LAND • GM is the competent authority for licensing of railway land & structures which are connected with Railway working. However licensing of existing facilities can continue as long as land is not required for Railway. • For facilities not connected with Railway working, Railway Board is the competent authority for licensing. • No land can be handed over without signing agreement (with agreement plan) with the party.

  17. LICENCING OF RLY LAND • License fees is worked out as a percentage of market value of land which is to be evaluated from sources which are defined by the Board. • The rate of license fees (percentage) varies as per use of land. • Usage of land should be limited to the purpose licensed which will be mentioned in agreement.

  18. IMPORTANT CIRCULARS OF LAND LICENCING 1. BOARD’S LETTER No.83/W2/LM/18/87 Dt.17.9.85 2. BOARD’S LETTER No.83/W2/LM/18/87 Dt.29.8.95 3. BOARD’S LETTER No.83/W2/LM/18/87 Dt.23.9.02 (specially for private sidings & bulk oil facilities) 4. BOARD’S LETTER No.83/W2/LM/18/87 Dt.24.3.04

  19. POLICY OF LICENCING OF LAND AS PER BOARD’S LETTER No.83/W2/LM/18/87 Dt.17.9.85)

  20. 1. CLASSIFICATION OF PLOTS BASED ON LAND COST RANGES (TABLE `A’) GROUP LAND COST RANGE Spl Above Rs.30 lacs/acre (Rs.747/Sqm) `A’ Rs.25-30 lacs/acre (Rs.618/sqm-747/Sqm) `B’ Rs.20-25 lacs/acre (Rs.494/Sqm-618Sqm) `C’ Rs.15-20 lacs/acre (Rs.371/Sqm-449/Sqm) `D’ Rs.10-15 lacs/acre (Rs.247/Sqm-371/Sqm) `E’ Rs. 5-10 lacs/acre (Rs.124/Sqm-247/Sqm) `F’ Rs. 2- 5 lacs/acre (Rs. 50/Sqm - 124/Sqm) `G’ Rs. 1- 2 lacs/acre (Rs. 25/Sqm - 50/Sqm) `H’ Rs.0.5-1.0 lacs/acre (Rs.13/Sqm - 25/Sqm) `I’ Rs.0.1-0.5 lacs/acre (Rs. 3/Sqm - 13/Sqm) `J’ Below Rs.0.1 lacs/acre (Rs.3Sqm)

  21. 2. APPROVED SOURCES FOR VALUATION (a) Valuation of revenue authority (b) Valuation of town planning department (c) Actuals as per PWD/CPWD Transactions (d) Actual transaction as per documents filed in sub-registrars office. (e) Value of land as assessed by professional evaluators of the state & Central governments.

  22. 3. AUTHORITY FOR FIXING LAND COST • For facilities in `A’ & `B’ class cities, the market rates of land is to be recommended by a PHOD committee consisting of PCE, FA&CAO & CCM and approved by GM. • For facilities in other than class `A’ & `B’ cities, the market rates of land is to be approved by PCE.

  23. 4. RATES FOR LICENCING (TABLE`B’) Type of plots %age of market value (a) Commercial plots including city booking & out agencies 10% (b) Steel yards, coal dumps, bulk oil, Private sidings, covered area on 15% commercial plots (c) Retail oil depots/ outlets etc 20%

  24. 5. LICENCE FEES License fees per annum = A x R x P where A = Area in Sqm R = Rate of land as per average of cost range in the group which the plot falls in Rs per Sqm shown in table.A above P = Prescribed %age as per usage of land shown in table.B above

  25. 6. APPLICATION OF REVISED GUIDELINES & PERIODICITY OF REVISION (a) The revised guidelines are applicable from 1.4.86 (to give 6 months notice period) (b) The periodicity of revision of market rates will be as under:- (i) Once in 3 Years for `A’ & `B’ class cities ie.1.1.89, 1.1.92, 1.1.95 etc.. (ii) Once in 5 years for other cities ie.1.1.91, 1.1.96 etc.. (c) Recovery of license fees as well as validity of agreements should be as per calendar year.

  26. POLICY OF LICENCING OF LAND AS PER BOARD’S LETTER No.83/W2/LM/18/87 Dt.29.8.95)

  27. SALIENT FEATURES OF CIRCULAR Dt.29.8.95 • This policy completely supercedes Board’s earlier letter Dt.17.9.85. • These instructions are applicable w.e.f 1.4.86 (ie with retrospective effect) • Land rate has to be evaluated as on 1.1.85 and these rates have to be enhanced by 12.5% to arrive at base rate as on 1.4.86. • The land rates thereafter has to be enhanced by 10% every year over the notional value of the previous year.

  28. SALIENT FEATURES OF CIRCULAR Dt.29.8.95 • For approved sources for evaluation, valuation of revenue authorities has been excluded. • Minimum license fees will be Rs.1000/- per annum • Termination/ renewal of agreements will be as per financial year instead of calendar year.

  29. RATE OF LICENSE FEES (LETTER Dt.29.8.95) Type of plots %age of market value (a) Commercial plots including city booking & out agencies & 6% commercial plots without structures (b) Commercial plots with temporary structures for stacking/storing 7.5% (c) Steel yard, coal dumps,bulk oil 10% (d) Private sidings 6% (e) Shops. Retail oil depots 20%

  30. OTHER FEATURES (LETTER Dt.29.8.95) • Valuation of market rate is only a one time exercise. ie. as on 1.1.85. • The classification in Board’s earlier circular Dt.17.9.85 was with an upper limit of Rs.30 lacs/ acre under group special ie Rs.747/Sqm whereas land rates in Mumbai as on 1.4.86 were up to Rs.9300/ Sqm. Hence license fees with market rate of Rs.747/Sqm and Rs.9300/Sqm were the same as per policy in Board’s letter Dt.17.9.85. Therefore there is a steep increase in license fees as per Board’s letter Dt.29.8.95 which is based on actual market rates

  31. POLICY OF LICENCING OF LAND AS PER BOARD’S LETTER No.83/W2/LM/18/58 Dt.23.9.02 FOR SIDINGS & BULK OIL INSTALLATIONS

  32. BOARD’S LETTER Dt.23.9.02 In partial modification of Board’s circular Dt.29.8.95, revision of license fees for sidings & bulk oil installations has to be done by revision of market rate of land once in three years w.e.f 1.4.92

  33. POLICY OF LICENCING OF LAND AS PER BOARD’S LETTER No.83/W2/LM/18/58 Dt.24.3.04

  34. SALIENT FEATURES OF CIRCULAR Dt.24.3.04 • Retrospective orders of Board’s letter Dt.29.8.95 has been withdrawn which means policy from 1.4.86 to 31.3.95 will be governed by Board’s letter Dt.17.9.85 and Board’s circular Dt.29.8.95 will be applicable from 1.4.95 only • Further the yearly increase in market rates of land over the previous year from 1.4.2004 will be 7% instead of 10%.

  35. SALIENT FEATURES OF CIRCULAR Dt.24.3.04 • In case current market value of land is adopted instead of updated land cost from 1.4.86 as the basis, an increase of 7% will be applicable thereafter. • Any recovery already effected need not be refunded but adjusted against future payments

  36. RATE OF LICENSE FEES (LETTER Dt.24.3.04) Type of plots %age of market value (a) Railway related activities such as city booking & out agencies & 6% commercial plots w/o structures (b) Commercial plots with temporary structures for stacking/storing 7.5% (c) Steel yard, coal dumps,bulk oil 7.5% (d) Private sidings 6% (e) Shops. Retail oil depots 10%

  37. MINIMUM LICENSE FEES (Letter Dt.19.5.04) The minimum license fee of Rs.1000/- per annum prescribed by Board is for plot area up to 100 Sqm For plot area of more than 100 Sqm, minimum license fee will be Rs.1000/- per annum every 100 Sqm rounding off area to farthest 100. For example for plot area of 250 Sqm, minimum license fee will be Rs.3000/- per annum

  38. EARNING THROUGH PROPERTY DEVELOPMENT AND LONG TERM LEASINGF

  39. PROPERTY DEVELOPMENT ON LONG TERM LEASING Category-I Involving rebuilding remodeling of stations Case 1 :- Developer constructs entire structure including station building. Case 2 :- Developer waits for construction of station building by Railway at Railway’ s cost Category-2 Involving construction on upper floors of Railway structure

  40. PROPERTY DEVELOPMENT ON LONG TERM LEASING Category-III Built up area readily available and property can be readily marketed. Category-IV Development of station cum commercial complex Category-V Property development in vacant plots

  41. PROPERTY DEVELOPMENT ON LONG TERM LEASING METHODOLOGY Two packet system of tendering by Railway or by Railway PSUs like IRCON, RITES,MRVC.. However owner ship will rest with Railway. GM is empowered to engage Railway PSUs as consultant up to limit of Rs.50.00 lacs per case Technical bid to be finalized by Railway & financial bid by Railway Board. Powers for approval for invitation & finalization rests with Board with limited powers to GM as shown below.

  42. PROPERTY DEVELOPMENT ON LONG TERM LEASING POWERS OF GM GM has powers for calling bids in open manner for area up to 1000 Sqm (Roof area and not sum of all floors) in other than metro cities The powers for finalization of these Tenders will be the same as per works contract with GM’s power for acceptance up to Rs.8.00 crores Identification & recommendations of sites for area less than 1000 Sqm will be by committee of Sr.DEN(HQ),Sr.DFM & Sr.DCM

  43. LONG TIME LEASING OF RAILWAY LAND TO STATE GOVERNMENTS

  44. LONG TIME LEASING TO STATE GOVTS(Board’s letter No.W.2001LML1353 Dt.4.10.01) • Long time leasing of Railway land to state governments can be done for period of 35 years. • The rate of license fees was 6% of market value of land earlier. But now since difficulties were experienced in recovery of lease charges, lump sum payment of the lease charges equal to 99% of market value of land shall be recovered in addition to nominal license fee of Rs.1000- per annum • The lease agreement shall be further renewable for a period of 35 years at a nominal license fees per annum to be decided at that time.

  45. . WAY LEAVE FACILITIES

  46. WAY LEAVE FACILITIES - These are rights given for passing of water & drainage lines, gas & oil pipes, power & communication cables, passage for public, road etc.. to private as well as govt agencies where there is no means for access/crossing or when there is no feasibility of providing them from any other direction. (Para.1033E) - DRMs are delegated powers to grant way leave facilities (which are different from licensing as procession of land is always with Railway)

  47. WAY LEAVE FACILITY CHARGES No Facility 1a. Passage/pathway up to one metre width, cattle X-ings (Rs.6400- as one time charges for 35 years) 1b. Water lines to individual farmers (Rs.12800/- as one time charges for 35 years) 1c. Electric crossings for individuals (Rs.12800/- as one time charges for 35 years) 1d. Water & sewage lines to individuals upto 300mm dia (Rs.12800/- as one time charges for 35 years) 1e Electrical crossings of electricity boards & central agencies (Rs.12800/- as one time charges for 35 years) 1f ROB/RUBS on deposit terms (Rs.5000- PA for two track crossing & two lane road and Rs.10,000- PA for more than 2 road lanes or 2 track crossing)

  48. WAY LEAVE FACILITY CHARGES NoFacilityRate pa 2a Passage/road up to 3 metres width 6% of market value of land for housing societies/ private (subject to min of Rs.5000) 2b Public roads for govt/welfare org 6% of market value of land (subject to min of Rs.10000) 2c Under ground water/sewerage lines 6% of market value of land (subject to min of Rs.10000) 2d Under groundoverhead electric 6% of market value of land crossings for other than those (subject to min of Rs.10000) under 1c above 2e For MTNL/VSNL/OFC facilities 6% of market value of land (subject to min of Rs.10000)

  49. WAY LEAVE FACILITY CHARGES NoFacilityRate pa 3a Open drains, over ground water/ 10% of market value of land sewerage/ oil/ gas/ effluent pipe lines (subject to min of Rs.20000) for private as well as PSUs 3b Under ground oil/gas/pipe lines 10% of market value of land (subject to min of Rs.20000) NOTE :- For facilities from 1a to 1e, length of land should not normally exceed 50 metres. Agreement for these facilities will be for 35 years extendable by 35 years Width of passage/road for more than 3 metres should be considered under licensing of Railway land. No openings into railway land/space shall be permitted. This includes drops/ sprouts from building, supports for building, wires, poles and other needs which are of permanent nature.

  50. WAY LEAVE FACILITIES • For the purpose of assessment of way leave charges width of land is to be taken as 1 metres. However in electrical crossings, width of land should be decided in consultation with Sr.DEE/DEE concerned. • The way leave facility charges are recoverable for 10 years in advance by discounted cash flow as per prevailing interest rates announced by RBI for government securities. No discount is applicable for first year. The discount applicable for subsequent years are 6.98%, 13.47%, 19.51%, 25.13%, 30.96%, 35.22%, 39.74%, 43.95% & 47.87% respectively.

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