The Comptroller and Auditor General (CAG) has released a scathing audit report exposing significant shortcomings in the Rail Land Development Authority's (RLDA) performance, revealing massive revenue losses and complete failure in commercial land development despite being entrusted with prime railway properties.

The comprehensive audit examined RLDA's operations between 2017 and 2022, focusing on two key activities: commercial development of vacant railway land and construction of multi-functional complexes. The findings paint a troubling picture of an authority unable to effectively monetize valuable land assets.

Development Performance Falls Short

As of March 2023, the Railway Board had entrusted RLDA with development of nearly 998 hectares of vacant railway land. However, despite awarding contracts for 35 commercial sites, not a single site had been developed by the end of the audit period. The performance in multi-functional complexes showed marginal improvement, with only 14 projects completed out of 53 contracted sites, representing a completion rate of just 26%.

Financial Performance Significantly Below Projections

The financial performance data reveals the extent of RLDA's underachievement. Between 2017 and 2022, the authority projected earnings of ₹3,281.32 crore but managed to earn only ₹332.79 crore, achieving merely 10.14% of expected earnings.

Valuation Irregularities and Revenue Losses

The audit identified significant irregularities in reserve price assessments, with errors in applying rates, area calculations, and floor area ratios leading to substantial undervaluation. In three out of 19 commercial sites examined, undervaluation amounted to ₹287.76 crore. The Ashok Vihar site in Delhi alone was undervalued by ₹204.22 crore, while the Bandra East site saw undervaluation of ₹1.84 crore.

Additionally, RLDA allowed discounts totaling ₹135.76 crore across 14 of 21 sites by not following prescribed evaluation methods. The authority failed to explore more remunerative development models with private developers, despite regulatory provisions allowing such arrangements.

Operational Challenges and Systemic Issues

Execution delays further impacted revenue generation, with agreements delayed by an average of 118 days across sampled projects. These delays reduced effective lease periods and resulted in non-monetization of ₹3.49 crore from 14 multi-functional complex projects alone.

The audit also highlighted poor consultant management, with eight out of 10 empaneled consultants participating in less than one-third of requests for proposals. Despite this poor participation rate, RLDA failed to take corrective action against underperforming consultants.

Recovery and Compliance Failures

RLDA's recovery mechanisms proved inadequate, with multiple instances of non-collection:

• Failed to recover expired performance guarantees worth ₹1.42 crore
• Did not collect security deposits amounting to ₹6.29 crore
• Left dues of over ₹33 crore outstanding as of March 2023 without initiating penal action

Systemic land-related issues compounded these problems, with neither the Ministry of Railways nor RLDA ensuring sites were litigation-free or that proper land records were obtained. In 58% of sampled cases, unresolved issues such as land title disputes and encroachments led to non-monetization.

Overall Track Record Since Inception

Since its establishment in 2006, RLDA's overall performance remains disappointing. The authority has been entrusted with 126 sites but awarded only 35 sites to private developers, representing just 27.78% of total sites. None of these commercial projects had been completed by March 2023, while only 14 multi-functional complexes, or 11.38% of 123 sites, have been successfully developed.

The CAG report underscores fundamental governance, planning, and accountability issues in railway land monetization, highlighting the urgent need for comprehensive reforms in RLDA's operational framework and execution capabilities.