In a phased manner, Indian Railways plan to utilise the vast extent of land, including prime properties in cities and towns, for establishing a chain of "luxury budget hotels." Although one hundred locations have been identified across the country, the Indian Railway Catering and Tourism Corporation (IRCTC), a subsidiary of the Railways, has issued letters of intent in respect of 20 of them. The hotels, which will have 80 to 100 rooms each, are to be set up on Public-Private Partnership (PPP) basis. On the face of it, this plan needs to be welcomed, especially by railway passengers, who should get a priority in the booking of the rooms. The retiring rooms now available in many railway stations are few and their condition is far from satisfactory. When the private sector also gets involved, the facilities and maintenance are expected to get proper attention. The project will operate on a revenue-sharing basis, with the private partner entering into a "develop, operate and maintain" contract for a 30-year-period through an open, competitive bidding process.

Considering that some of the country's prime properties and locations figure in this PPP venture, the IRCTC must ensure complete transparency in the bidding process. There has to be a cap on the number of hotel projects a consortium or a group of companies can operate, with the additional stipulation that they go for a mix of locations metropolitan city plus second- or third-tier towns. In the first phase, hotel projects may come up in centres such as Mumbai, Secunderabad, Pune, Madurai, Chandigarh, and Darjeeling to name a few. In the larger canvas, this seems to be just the beginning of commercial exploitation of the vast tracts of land available with the Railways. The Railway Ministry and the Board must take these steps cautiously to make sure that the prime locations do not get into the wrong hands, especially those in the real estate market. There is also a great potential for setting up marketing centres and a cold chain along the main railway corridors and it needs to be explored. The hotel project does look promising. But the IRCTC will do well to study its working in the first phase and, in the light of experience, make necessary refinements before taking up the other phases.