Infrastructure developer Lanco Infratech Ltd has inked agreements with
four global firms that specialize in operating railway stations so
that it can bid for projects to modernize railway terminals in India.

The Indian Railways has announced plans to upgrade 22 railway stations
in the country in partnership with the private sector.
“We have entered into memoranda of understanding with four global
railway operators from the UK, China, Malaysia and Singapore,” said
Sanjay Divakar Joshi, director of infrastructure at Lanco Infratech,
which reported revenues of Rs3,337 crore in the fiscal year to March.

Joshi declined to name the firms “due to competition.” He, however,
said the company plans to involve different partners for different
projects based upon the criteria that the railways would prescribe.

Although the company was keen to work on the modernization of the New
Delhi railway station, estimated to involve investment over Rs6,000
crore, it could not submit bids because of frequent changes in
qualification norms by the railways, Joshi said.
The railways has invited bids to modernize the New Delhi railway
station ahead of the Commonwealth Games the Capital will be hosting in
2010, on the lines of China’s Beijing railway station and US’ New York
central railway station.

As many as 35 companies including Reliance Infrastructure Ltd, earlier
known as Reliance Energy Ltd, Videocon Industries Ltd, GMR
Infrastructure Ltd, GVK Power and Infrastructure Ltd and DLF Ltd have
expressed interest in modernizing the New Delhi station. While GMR is
upgrading the Delhi airport, GVK is modernizing the Mumbai airport and
Reliance Infrastructure has taken up the Mumbai metro rail project.

“Initially we had tied up with a UK-based operator but had to go in
search of another partner with the railways changing certain
qualification criteria, which was changed again, Joshi said. “We could
not tie up with another partner that met the qualification criteria
within the stipulated time for submitting the bids for New Delhi
railway station project.”

Lanco is now preparing to bid for the other key railway passenger
terminal projects. “We are waiting for the qualification criteria to
be announced by the railways for these projects so that we can go
ahead with one of the partners that we have arrangements with that
meets the criteria,” Joshi said.

The company is keen on Secunderabad, Chennai, Bangalore, Jaipur and
Patna projects in the first phase and Pune and Ahmedabad in the
subsequent phases. “Depending upon the qualification criteria, we may
either go ahead with one partner for all the railway terminal projects
or different partners for different projects,” the executive said.

While the railways is yet to invite bids for 21 terminal projects and
to indicate the capital cost for each of these, Joshi said the company
assumes the cost of the other projects in first phase to be in the
range of Rs2,500 crore to Rs4,000 crore per station.
Railway minister Lalu Prasad has said his ministry plans to award
projects for the New Delhi, Mumbai, Patna and Secunderabad railway
stations through global competitive bidding during this fiscal and
expects to attract an investment of nearly Rs15,000 crore for these
stations.

“Never before in its history had Indian Railways come out with such
large infrastructure development projects inviting private
partnership. This offers a major opportunity to Indian infrastructure
companies after national highway projects in the surface
transportation sector,” said Shailesh Kanani, analyst with Mumbai-
based brokerage Angel Broking Ltd. “The scope is so large that each
and every company can have its piece of the cake.”
Lanco Infratech scrip gained 1.46% to close at Rs332.55 on the Bombay
Stock Exchange on Thursday, a day that saw the exchange’s benchmark
Sensex index gaining 0.29% at 15,117.25 points. The stock traded at a
year’s highest price of Rs887.95 and lowest of Rs225.

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