Railways failed to monetise vacant land: CAG

New Delhi: Flagging Indian Railways' failure to monetise vacant land, the Comptroller and Auditor General of India (CAG) has observed that out of a land holding of about 4.88 lakh hectares, the Railway could identify only 13% as vacant land by March 2023, and managed to award a negligible 0.14% of it to developers.

The CAG report, tabled in the Lok Sabha on Thursday said that none of the awarded commercial sites were developed as of March 2023.

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

The CAG said despite the Railway establishing the Rail Land Development Authority (RLDA) in 2006 to develop and monetise surplus land in a professional manner, the authority failed to achieve the desired result.

"Approximately 997.83 hectares (1.59% of the entire vacant land) was entrusted to the RLDA by the Ministry of Railways since its inception in 2006 over different phases for commercial development and monetisation," noted the report, adding that despite the availability of such quantum land, the RLDA, as of March 2023, could award only 8.8% (87.76 hectares) of land entrusted to it.

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

Pointing out that the Railway's revenues traditionally came primarily from two passenger and freight traffic, the audit report said passenger fares could not be stretched beyond a point as it affected affordability and inclusiveness, while depending entirely on freight earnings was neither prudent nor sustainable.

The country’s top auditor said it had been emphasising 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 was particularly significant, said the report.

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

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