The Hindu : Bangalore Metro Rail Project on track

Online edition of India's National Newspaper
Sunday, May 04, 2003

Southern States

Southern States - Karnataka

Bangalore Metro Rail Project on track

By Our Staff Reporter

BANGALORE May 3. After seven years, the much talked-about Bangalore Metro Rail Project is showing signs of getting on track with the Centre and the State Government stating that a memorandum of understanding (MoU) will be signed soon.

The Union Urban Development Minister, H.N. Ananth Kumar, and the Chief Minister, S.M. Krishna, announced here today that the Centre and the State were keen to sign an MoU to take up the project. They were speaking after a Detailed Project Report presentation to the State Government by the Delhi Metro Rail Corporation Managing Director, E. Sreedharan. Mr. Kumar said Mr. Krishna and he would apprise the Prime Minister, A.B. Vajpayee, the Deputy Prime Minister, L.K. Advani, and the Defence Minister, George Fernandes, about the project, besides the Union Finance Minister, Jaswant Singh. Mr. Vajpayee and the Union ministers will be here on Sunday.

Mr. Kumar said a draft MoU was ready with the Centre. Now, the Union and State Cabinets needed to approve the project, he said. The State Cabinet would address the issue at its meeting on May 8, Mr. Krishna said.

The proposal, as per Mr. Sreedharan's presentation, is to take up work on the east-west and north-south corridors — passing through the central business district — covering 33 km, with 32 stations at a cost of Rs. 3,970 crores, which is projected to go up to Rs. 4,989 crores with escalation and interest costs on completion.

Mr. Sreedharan, making a strong case for the project, said it would have a combination of underground, elevated, and surface portions. The metro rail, he said, was the fastest mode of urban transport. It was comfortable, reliable, pollution-free, and energy efficient.

According to the DPR statistics, 8.2 lakh passengers a day are projected to travel on the Bangalore Metro Rail by 2007, 10.2 lakh a day by 2011, and over 16 lakh a day by 2021. If the project was taken up by July this year, it could be completed by December 2007. Besides, Mr. Sreedharan said, the metro rail could bring down the pollution level in Bangalore by as much as 50 per cent.

On the financial model, Mr. Sreedharan said 40 per cent of the project cost would be shared equally by the Centre and the State Government. The State's share would work out to Rs. 875 crores, to be paid over five years.

Land and rehabilitation costs as interest-free subordinate debt would have to be shared by the Centre and the State at Rs. 180 crores each. The remaining Rs. 2,880 crores would have to be raised from the market, he said. Mr. Sreedharan suggested that funds could be raised internally at an interest rate of 10.5 per cent annually with a moratorium during the completion stage, or externally from JBIC at two per cent interest annually or from the World Bank/Asian Development Bank at 2.5 per cent interest.

The key person behind the prestigious Konkan Railway project and the Delhi Metro, Mr. Sreedharan strongly recommended taking the internal route for raising funds. It would give more flexibility in implementing the project.

He said if the option of raising funds from external sources was taken, the project was bound to by delayed and costs would overshoot by 15 to 20 per cent as concurrence would have to be taken from the agencies at every stage.

The Hudco Chairman and Managing Director, P.K. Pradhan, said Hudco had agreed to become lead financiers of the project in raising the required funds for the project.

Mr. Sreedharan said a Special Purpose Vehicle would have to be formed, on the lines of Delhi Metro, for the project.

Mr. Krishna expressed the State Government's keenness to implement the project on schedule, stating that the State was in a financially comfortable position to take up the project. The State had already earmarked Rs. 72 crores in the 2003-04 Budget and was ready to pump in an additional Rs. 400 crores, he added.

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