Inclusive Approach to Land Based Financing of Infrastructure Development: a Case of Railway Land Redevelopment at Bijwasan, Delhi

Abstract

India is rapidly urbanizing with projected population close to 600 million urban population by 2030, more than double of 2001. Consequently, there is a pressing need for high-quality public infrastructure to support this urban growth. However, traditional financing methods such as Pay-as-you-go are insufficient to address the backlog, current, and future infrastructure needs arising from this urbanization. Thus, there is a need to adopt innovative mechanisms of development financing, and this is being widely adopted in recent times. The Indian Railways (IR) has 4,30,000 hectares of unused vacant land, which have been intermittently targeted for development initiatives. Typically, these projects have been profit-driven endeavors, primarily benefiting private entities such as real estate developers, often neglecting considerations of sustainable and equitable urban planning. This prevailing approach risks skewing the objectives of urban planning by prioritizing developer benefits over the needs of residents and businesses. Consequently, there is an imperative to reassess the processes and real estate product mix associated with such projects. This study endeavors to examine international and national case studies to discern prevailing trends, best practices, and inherent shortcomings that can be applied to the redevelopment of the project site. Emphasis is placed on scrutinizing the financial models, real estate product mix, profit margins, as well as delineating subsidy and premium components evident in these case studies. For the purposes of this research, the Bijwasan railway station in Delhi has been selected, proposed for transformation into a world-class station under the Indian Railway Station Development Corporation (IRSDC). Furthermore, it is envisioned to serve as a directional multimodal hub as per the Master Development Plan 2021 (MDP21) for Delhi. This study extensively examines the real estate development facet of the project, while technical feasibility aspects pertaining to railway station demand and costing are drawn directly from publicly available reports published by IRSDC. Methodologically, this research employs GIS-based supply mapping to calculate the existing market supply of commercial real estate, supplemented by ground-truthing exercise. Primary surveys targeting catchment area residents are conducted to gauge their needs and perceptions, alongside pan-city commuters surveys aimed at elucidating their demands and perceptions. Additionally, surveys of commercial establishments are undertaken to discern market supply and demand dynamics, while secondary market surveys provide insights into general trends within the Dwarka (the catchment area) micro-market and the broader Delhi NCR region across various real estate development categories. Utilizing this comprehensive dataset, the demand for diverse real estate product mixes is inferred. The inferences from case studies and primary survey serve as the foundation for determining the most viable and equitable real estate product mix for the project. Considerations of end-user demand and the equitable inclusion of all socio-economic classes are paramount, with a concerted effort aimed at mitigating project risks. Ultimately, the overarching goal of this project is to catalyze a paradigm shift in the approach to developing transport infrastructure projects such as railway stations and multimodal hubs. Through quantitative and qualitative assessment, the study aims to ascertain the feasibility and potential for equitable outcomes inherent in such ventures.