New Delhi, Aug. 27: The state-run Rail Yatri Niwas in the capital will now be run by a five star hotel chain — the Taj group.

The Rail Yatri Niwas will be run under the group’s budget hotel brand, Ginger. Taj Hotels has been given this project on a 15-year lease. During this period, the hotel major will spend Rs 8 crore to refurbish the Rail Yatri Niwas.

“The final agreement has been signed between the Taj group and the Indian Railway Catering and Tourism Corporation (IRCTC) earlier this month. It will be a Ginger brand of hotel,” Nalin Singhal, interim managing director of IRCTC, told The Telegraph.

The makeover of the Rail Yatri Niwas will be done on a redesign-operate-manage-transfer basis. Sources said the Taj group would renovate and add food courts within the complex.

The contract with the group is part of IRCTC’s attempt to upgrade all four Yatri Niwas hotels in Delhi, Howrah, Ranchi and Puri.

The Hotel Meghalaya group has bagged the contract to renovate and run the Yatri Niwas at Howrah. IRCTC has awarded contracts to renovate, upgrade and run its Yatri Niwas in Ranchi and Puri to the BNR group.

The railways had earlier decided to use its surplus land commercially. About 100 budget hotels are to be constructed across the country on railway land.

The railways has already identified sites where the budget hotels will come up. The hotels will be constructed through public-private participation.

It is estimated that the railways will earn about Rs 300-350 crore from collaborations with hospitality majors. The revenue-sharing agreements, however, have not yet been finalised.

In the first stage, the railways finalised 20 sites mostly near railway stations for construction of budget hotels. The sites are in Agra, Pune, Mumbai, Darjeeling, New Jalpaiguri and Jaipur.

The railways has 4.23 lakh hectares of surplus land, of which 42,846 hectares are vacant and located along rail tracks.

Officials said the negotiations were in the final stage. After the final agreement is signed, land will be given for the construction of 20 hotels in the first phase.