MSRTC Plans 98-Year Leases to Boost Bus Stand Revenues

24 Jun 2025 CW Team

The move comes as the transport body, which has served the state’s intra-city and rural transport needs for over seven decades, faces mounting financial stress. MSRTC’s accumulated losses have reached approximately Rs 103 billion over the years, primarily due to subsidised fares and operational inefficiencies.

To tackle this, the corporation had earlier introduced the PPP model two decades ago, leasing 45 bus stands for 30 years. Last October, the lease term was extended to 60 years for the redevelopment of 72 additional stations. Now, the state transport department is preparing a new tender that further extends the lease period to 98 years to attract more investment and improve viability.

Under the revised model, MSRTC will no longer charge an upfront premium for redevelopment rights. Instead, contracts will be awarded based on the share of commercial property the private developer offers to MSRTC post-redevelopment. For example, if a developer constructs 1,000 sq ft of space, at least 30 per cent of it would be allocated to MSRTC. The corporation would then lease out this share to generate monthly rental income for the full lease duration.

A senior transport department official explained, “This approach guarantees MSRTC a recurring revenue stream throughout the lease term, rather than relying on one-time payments. It also aligns with real estate market practices, where longer leases command better investment interest.”

Over the past 20 years, MSRTC earned Rs 320 million in direct premiums from private developers and received redeveloped bus stands worth Rs 230 million. However, the shift to a share-based model is expected to be more beneficial in the long term.

The first term of the new lease structure will run for 49 years, followed by an automatic extension for another 49 years, totalling 98 years.

Transport Minister Pratap Sarnaik supported the proposal, noting, “A 98-year lease will attract higher investment and bring in more revenue compared to the existing 60-year model. It is in line with current real estate practices and ensures longer-term financial security for MSRTC.”

MSRTC currently manages 598 bus stands and 251 depots across Maharashtra, many of which are in need of redevelopment. The proposed plan, once approved by the state revenue department, will unlock the commercial potential of these locations while ensuring modern transport infrastructure for passengers.

The Maharashtra State Road Transport Corporation (MSRTC) is set to overhaul its revenue model by extending the lease tenure of its bus stands from 60 years to 98 years under the public-private partnership (PPP) model. The new strategy is part of MSRTC’s efforts to revive its financial health and create a sustainable income stream through long-term leasing and commercial redevelopment.The move comes as the transport body, which has served the state’s intra-city and rural transport needs for over seven decades, faces mounting financial stress. MSRTC’s accumulated losses have reached approximately Rs 103 billion over the years, primarily due to subsidised fares and operational inefficiencies.To tackle this, the corporation had earlier introduced the PPP model two decades ago, leasing 45 bus stands for 30 years. Last October, the lease term was extended to 60 years for the redevelopment of 72 additional stations. Now, the state transport department is preparing a new tender that further extends the lease period to 98 years to attract more investment and improve viability.Under the revised model, MSRTC will no longer charge an upfront premium for redevelopment rights. Instead, contracts will be awarded based on the share of commercial property the private developer offers to MSRTC post-redevelopment. For example, if a developer constructs 1,000 sq ft of space, at least 30 per cent of it would be allocated to MSRTC. The corporation would then lease out this share to generate monthly rental income for the full lease duration.A senior transport department official explained, “This approach guarantees MSRTC a recurring revenue stream throughout the lease term, rather than relying on one-time payments. It also aligns with real estate market practices, where longer leases command better investment interest.”Over the past 20 years, MSRTC earned Rs 320 million in direct premiums from private developers and received redeveloped bus stands worth Rs 230 million. However, the shift to a share-based model is expected to be more beneficial in the long term.The first term of the new lease structure will run for 49 years, followed by an automatic extension for another 49 years, totalling 98 years.Transport Minister Pratap Sarnaik supported the proposal, noting, “A 98-year lease will attract higher investment and bring in more revenue compared to the existing 60-year model. It is in line with current real estate practices and ensures longer-term financial security for MSRTC.”MSRTC currently manages 598 bus stands and 251 depots across Maharashtra, many of which are in need of redevelopment. The proposed plan, once approved by the state revenue department, will unlock the commercial potential of these locations while ensuring modern transport infrastructure for passengers.

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