Surat: Memorandum of Understanding (MoU) was signed in Gujarat’s second largest city Surat for construction of multi model transportation hub (MMTH) at Surat railway station. The MoU was signed among IRSDC an arm of Railways, Gujarat State Road Transport Corporation(GSRTC) and Surat Municipal Corporation(SMC) in presence of Railway Minister Suresh Prabhu and Deputy Chief Minister of Gujarat Nitin Patel. The railway station will be constructed at a cost of over Rs 600 crore. It will have 61 storey building.

Full report: The Railways, Gujarat government and Surat Municipal Corporation have signed an agreement to develop Surat station under the Public Private Partnership model.

This tri-party agreement was signed here today in the presence of Union Railway Minister Suresh Prabhu, Gujarat Deputy Chief Minister Nitin Patel and Surat mayor Asmita Siroya.

Prabhu told reporters that private investment is the best way to expedite the upgradration of railway stations in the country.

“This station will be India’s first and distinctive railway station upon it’s completion. It will also have a multilayer park having a slew of facilities, which are usually found in airports. I am sure that it will turn out to be a tourist destination,” the Minister said.

“This project will be carried out under PPP model, as the government alone can not bear all the expenditure. If we do so, we have to raise taxes to collect the required capital.

Thus, the best way is to involve private players. For this project, 36 business entities have already shown their interest,” said Prabhu.

The Minister further talked on increasing non-railway income to boost development in the railway sector.

“We have only two income options at present- freight and passenger fares. In Japan, one third of railway income comes from non-railway operations. We need to understand and incorporate such business model to raise funds.

“After Surat, we are planning to develop Gandhinagar station and many other (stations) across India,” Prabhu added.PTI

Additional details:

The project will involve total cost of Rs 3,765 crore. It will come up over 2,57,306 square meter.

Land rights will continue to be with the owners but all development rights will need to be given to joint venture company.

In initial phase, equity share in proposed joint venture company will be according to percentage of land, as per which IRSDC will have 63% equity, GSRTC 34% and SMC 3%. When Special Purpose Vehicle(SPV) is formed this percentage may change.

Partner/developer selected for the project will get 90-year development/repair rights.

In the first phase, railway station will be revamped. The other commercial development works will be taken up only after railway station work is completed.

Phase one will involve Rs 645 crore expenditure. Rest of the expenditure will be on developer’s part. Tender will be finalized by March 2017 after which station upgradation works will kick off.

Timeline decided as of now suggests that Request for Quotation(RFQ) will be obtained on 30th September. Request for Proposal will be obtained by 18th December. After finalization of RFP the works will start on 30th March 2017 with Lease of Agreement.

According to railway minister, common utility services will need Rs 169 crore expenditure.

MMTH project will be given a special project status which will cover the project under socialized development control rules so that the project become not just viable but also revenue surplus. In interest of public good, Surat Municipal Corporation as per Gujarat government orders will be able to give exemptions in building rules, development permissions and regulations.

Gujarat government and Surat Municipal Corporation(SMC) will need to exempt the project from collecting charges pertaining to change of purpose of using land.

In order to provide common utility services, SMC will collect user charges. It will also collect property tax/professional tax for all commercial development under the project.

DeshGujarat