The government has significantly increased the budgetary allocation for the redevelopment of railway stations, raising it from Rs 21.59 billion in FY2023 to Rs 155.11 billion in the FY2025 Budget Estimates of Indian Railways. The report states that this allocation is expected to remain at healthy levels in the medium term.

Initially, the Government of India had planned to undertake most of the station redevelopment projects under the Public-Private-Partnership (PPP) mode, which accounted for around 12 per cent of the National Monetisation Pipeline (NMP) target. However, due to limited participation in the PPP mode—caused by restrictions on pricing, market risk related to real estate development, and the limited track record of PPP projects in railways—the government reallocated station redevelopment work to the EPC mode in December 2022. This change led to the increase in the budgetary allocation.

Vinay Kumar G., ICRA's sector head for Corporate Ratings, mentioned that while competition in traditional segments like roads and buildings remains high, the redevelopment of railway stations offers significant business opportunities for construction companies, with an estimated Rs 300 billion to grow and diversify their businesses. He further explained that the station redevelopment projects had seen moderate competition in the past two years, with maximum discounts of up to 18 per cent and a median discount of up to 4 per cent. This pattern has been similar to other railway EPC projects, where the median discount is up to 5 per cent. Since Indian Railways is considered a strong counterparty, he noted that the receivable cycle is expected to remain low and comparable to that of the NHAI.

Among the stations being redeveloped under the ABSS, Uttar Pradesh has the highest number, with 149 stations, followed by Maharashtra with 126, West Bengal with 94, Gujarat with 87, Bihar with 86, Rajasthan with 82, and Madhya Pradesh with 80. Foundation stones have been laid for 553 stations, and more than Rs 200 billion in station redevelopment projects have been awarded so far.

The key stations awarded under the EPC mode include Mumbai (Chhatrapati Shivaji Maharaj Terminal/CSMT), Ahmedabad, Surat, Prayagraj, Bangalore Cantt, Chennai Egmore, and Secunderabad, among others. Additionally, awards for 765 stations are still pending, with major stations like New Delhi, Pune, Borivali, Mumbai Central, Thane, and Amritsar yet to be awarded.