PROPERTIES ON LEASE
A. PROPERTY DEVELOPMENT IN DMRC
The Delhi Metro Rail Corporation Limited (DMRC) was formed in 1995 to construct and operate a world class Rail based Mass Rapid Transport System (MRTS) with equal equity participation of Government of India and the Government of the National Capital Territory of Delhi (GNCTD)
DMRC has been a big success story in the country having expanded its network to more than 389 Km with 285 stations (including NOIDA-Greater NOIDA Corridor and Rapid Metro of Gurugram) in less than 25 years of its existence. Some of the main reasons behind the success of DMRC have been equal participation of the State Government, multiple sources of financing by way of equity participation by Central and State Governments, Debt financing against Government guarantees, Income generation through non-conventional resources like Property Development etc. DMRC today stands out as a shining example of how a mammoth technically complex infrastructure project can be completed before time and within budgeted cost by a Government agency.
Commercial/property development at Metro stations and on adjacent urban land has been used as a key instrument for maximizing revenues in metro rail systems in cities around the world. Notable examples are Hong Kong and Tokyo metro rail. In line with the global practice, DMRC is striving to maximize its earnings from Property Development which can be used to part finance its infrastructure development as also to offset its revenue expenditure. Detailed instructions in this direction were issued by Ministry of Urban Development, now MoHUA, in 2009. DMRC had started its strides to generate finance through Property Development right from the time sections under its Phase-I commenced operations, i.e. in around 2004-05.
Taking clues from the DMRC example and in line with International practices, Metro Rail Policy 2017 adopted by the Central Government states that, “Metro Rail systems need to be seen not merely as a transportation project, but as urban transformation projects that help a city move from sprawled development to greater compactness leading to sustainable cities.”The Policy further lays emphasis that the State Government and Local Authorities responsible for a city’s development and growth shall give a commitment of transfer of the financial benefits accruing in the influence zone of the metro alignment on account of the TOD policies and VCF framework directly to the Agency implementing the metro rail project.