Second bid to modernise New Delhi rly station fails

Second bid to modernise New Delhi rly station fails
The Hindu Business Line, November 10, 2009, Page 15

Mamuni Das

New Delhi, Nov. 9 The second attempt to start work on modernising the New Delhi railway station on a public private basis has failed. The bidding process for the Rs 12,000 crore project is all set for a quiet burial — the bank guarantee of Rs 25 lakh submitted by each of the seven bidders in March this year for the qualifying bids were valid till October 10 only. The Railway Ministry is unlikely to extend the date.

The consortia and some of their members who had submitted bids for the New Delhi station modernisation are Tata Realty and Infrastructure and Grandi Stazioni SPA (Italy); Larsen and Toubro Transco; DB Realty and Deutsche Bahn (German Railways); Nishok Realty, Spanish Railway, Posmar Inversions, Yoman Infrastructure, Parnesh Real Estate; Morgan Stanley Infrastructure and VNR Rail Infrastructure; KMC Construction, China Railway 18th Bureau Group; GVK Developmental Projects, Leighton.

Confusions in the process

The Indian Railways had an option to extend the bank guarantee period through mutual discussions and keep the bidding process alive. But, officials have decided against it. “We have decided to wind up the request for qualification process. As it is, many DDA approvals were required for the project…It is better for us to get these approvals before we move ahead to the bidding process for this project,” said a Ministry official.

The New Delhi railway station redevelopment project appears to be jinxed as the first request for qualification process was cancelled because there was confusion over the interpretation of the “cross-ownership” clause in the document. In the first half of 2008, the Railways had received 13 bids for the project.

Those bidders who had submitted qualifying bids in the first round of qualifying bids but opted in the second round include DS Construction; Maytas Infrastructure; Emaar-MGF and Gammon; Reliance Infrastructure; Sadbhav Engineering and SREI.

Costs involved

The Railway Ministry had decided to undertake re-development and modernisation of the New Delhi Railway station, including the surrounding railway land, comprising about 86 hectares through public-private partnership on design, build, finance, operate and transfer basis.

The cost of the project, at Rs 9,000 crore, included mandatory capital expenditure, the real estate development for commercial purposes and interest during construction. The successful bidder was supposed to enter into a long-term concession agreement (of about 45 years) with the Indian Railways, according to the RFQ document.

For the technical consulting services (that include architectural inputs) of the station, Hong Kong-based Terry Farrell had been appointed around July 2007 for advising Railways at a cost of about Rs 7 crore.

Later, around April 2008, the Railways had selected London-based legal firm CMS Cameron McKenna for providing legal consulting services, while Grant Thornton was selected to provide advisory services on the financial issues.