An Indian Civilizational Perspective

Railways land for Budget Hotels by Taj and other chains!

Indian railways is on a tear! After the near global celebrity status for business acumen that Laloo enjoys now, here is something that other departments should learn from. Indian Railways has large amount of properties lying around. They will let the large hotel chains build budget hotels there on a BOT (build, operate,transfer) format and utilize that land. Cool huh! The issues will come once the properties are T’ed back … as in transferred back to Railways bureaucrats 🙂

Of the eight locations, four have Rail Yatri Nivas hotels, which would be refurbished by the hotel groups and operated for 15 years before being handed back to Railways.

The Rail Yatri Nivas in New Delhi would be developed by the Taj Group with a capital investment of about Rs. 8 crore. The Taj Group would pay back Rs. 8 crore to IRCTC spread over 15 years.

The Rail Yatri Nivas at Ranchi and Puri have been awarded to the Patna-based Chanakya Hotel Group while the one at Howrah will be with Visakhapatnam-based Meghalaya Hotel.

“Spread over 15 years, we would get about Rs. 15 crore from the hotel at Ranchi; Rs. 7-8 crore from Puri, and around Rs 2. crore from Howrah,” said Dr P.K. Goel, MD, IRCTC, reports business line.

The amounts vary based on the location, investment required to refurbish and the size of the hotels. The Howrah hotel has 37 rooms as compared to the Delhi hotel with about 100 rooms. These four hotels would be commissioned over the next year.

IRCTC has also handed over Railway land at Bikaner, Darjeeling, New Jalpaiguri and Sealdah for construction of hotels on BOT basis for 30 years. Zoom Developers, along with Royal Orchid, would build hotels at Bikaner, Darjeeling and New Jalpaiguri, while the hotel at Sealdah would be built and operated by Essel Group Company PAN India Paryatan Ltd.

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