Lead Story

Rail Ratna project to remain under IRCTC

Developers complain of heavy losses, lack of information flow

Sanjeev Bhar - New Delhi

The Rs 20,000-crore dream project of the Indian Railway Catering & Tourism Corporation (IRCTC) - the Rail Ratna budget hotels - will now remain under the authority of IRCTC. The Ministry of Railways had earlier issued a mandate to the Railway Land Development Authority (RLDA) - a statutory authority set up by an amendment to the Railways Act, 1989 - to develop vacant railway land for commercial use.

This has had a domino effect on developers who had successfully bid for establishing hotels. Zoom Developers is one such company that bid for 12 hotels in Chandigarh, Udaipur, Jodhpur, Bikaner, Agra, Darjeeling, New Jalpaiguri, Bhopal, Nagpur, Pune, Tirupati and Bhubaneshwar. Rumneek Bawa, its president and CEO, is visibly miffed. He says, "We should ideally see a sanction to go ahead with the project but that entirely depends on how the higher authority at IRCTC react to the existing situation." According to an IRCTC source, at any given point of time the organisation should get the clearance from the Finance Commission and Chairman Railway Board in writing to see the stalled project moving.

Rumours are that the entire project has been called off but no official news has come from the ministry so far. The Railway Ministry has however confirmed that projects at some sites like Bihar have been completely shelved. Officials at the Railway Board did not entertain queries and asked the reporter to speak to IRCTC officials for more details. However, they were unavailable for comment.

The developers, on the other hand, are clueless about the future of the projects with no intimation from IRCTC. Bawa remarks, "We have been trying to meet the IRCTC officials but have failed to get any response from them. We have made the necessary payments, submitted all fees and suffering capital losses worth crores. They are answerable and should update us on the state of affairs."

According to Bawa, the stalling of the project has cost companies that have won bids, including his own, dearly. Many have taken loans. "We are in a very poor state. We have invested in a team to manage the project, raised bank loans and entered into contracts for materials," claims Bawa.