Bidders’ demand defers Chennai Central tender

In its invitation document released in February last, SR had fixed May 22 as the closing date to bid for appointment of station facilitation managers (read as contractors) who would develop, redevelop and commercially develop Chennai Central station. Chennai Central is the second most expensive project (Rs 350 crore) after Howrah (Rs 400 crore) of the 23 station privatisation projects to be executed under the PPP (public private partnership) model across the country. 

A quick glance at the invitation document suggests that developers would be permitted to commercially develop the station space and leverage the real estate potential of reserved railway land adjacent to or in the vicinity of the station after paying a lease premium to the railway department for a period of 45 years. Commercial development would include sub-leasing parking facilities or stalls like eateries and book shops in the concourse area of Central station and even construction of a mall, if adequate railway land is available for the contractor. 

Travellers could expect professionally trained male and female hospitality and conservancy staff to indulge in the upkeep of the stations. However, it has a catch. The right of pricing would rest with the private contractor. The contractor, who invests Rs 350 crore for 45 years, would be at a liberty to increase the licence fee, which would reflect in the price travellers pay for amenities and services. “Tea is sold at Rs 7 per cup now because vendors pay licence fee to railways, but a contractor would demand more from the licensee, who will impose it on the buyers. Railways will lose its control over pricing services. Everything would be commercialiased and corporatised,” said R Elangovan, leader of CPI(M) backed DREU, arguing that only corporates would run the services as smaller players would not be able to bid for a Rs 350 crore project. 

SR sources conceded that contractors have objected to railways insisting on provision of free water and toilet facilities at stations besides demanding that platform ticketing be handed over to them. The proposal would also defeat the purpose of appointing a station director, a senior divisional commercial manager level officer of Chennai Central, which SR recently did.