In push for pvt investment, lease for MSRTC land extended to 98 years from 60

The MSRTC — which operates a fleet of around 14,000 buses, serves approximately 55 lakh passengers daily and employs nearly 90,000 personnel — has in recent years faced multiple challenges including mounting financial losses, an ageing fleet, employee agitations and declining ridership.

The revised lease framework, applicable to surplus MSRTC land — primarily located at bus depots in cities across the state — is aimed at making public-private partnership (PPP) projects more financially viable and attractive to private developers.

Under the new model, the lease will be granted for 49 years and can be renewed for another 49 years, subject to compliance with government norms and policies prevailing at the time of renewal.

Officials said the move is expected to facilitate the commercial development of bus terminals and depots across Maharashtra, improve passenger amenities and increase the corporation’s non-fare revenue.

This decision builds on a Cabinet resolution passed on September 23, 2024, which had allowed MSRTC to lease 39 land parcels across the state on a Build, Operate and Transfer (BOT) basis for a 60-year period, up from the earlier 30-year term. That policy allowed developers to utilise available floor space index (FSI) for commercial and residential purposes, reserving 0.5 FSI for MSRTC’s own infrastructure. The state had also offered a 50 per cent exemption in revenue sharing and authorised MSRTC to manage the tendering and selection process independently.

Despite the relaxed terms, officials admitted that private sector interest remained tepid. In the last two decades, only 45 BOT-based projects were successfully implemented. A 2006 attempt to launch similar projects at 13 depots received a response only for Panvel and Chhatrapati Sambhajinagar (Aurangabad), primarily due to limitations imposed by the lease period.

“One of the major hurdles was the 30-year lease model, which made these projects financially unviable. Even the 60-year term introduced in 2024 failed to attract the scale of investment we had anticipated,” a senior Transport Department official said.

The new 98-year lease model is based on recommendations from an expert committee, which found that most public bodies offer 99-year lease terms — more compatible with infrastructure financing models. The committee also noted that longer tenures could help MSRTC earn 1.5 to 2 times more as upfront premiums.

Acting on these findings, the MSRTC board proposed the new 49+49 year lease model, with renewal contingent on adherence to policy conditions. The Cabinet has now formally approved the proposal.

In a separate decision, the Cabinet also approved a new policy to allot narrow, irregular-shaped or landlocked government plots — such as unused strips behind homes, access lanes, or unreachable government lands — to adjacent property owners.

The allotment will be governed by Section 37A of the Maharashtra Land Revenue (Disposal of Government Lands) Rules, 1971, and will be subject to conditions such as FSI status, accessibility, usage, and size limits.

The policy is aimed at regularising informal land use, curbing encroachments, and bringing these plots into the formal urban development system, especially within municipal corporations and councils.