BMRTL to prepare revised ELRTS feasibility report

By Our Staff Reporter

BANGALORE, MAY 28. The Bangalore Mass Rapid Transit Ltd. (BMRTL) will prepare a revised detailed feasibility study report while expediting the completion of the ridership study and estimation of costs and fund requirements soon for the City's Rs.3000-crore Phase I Elevated Light Rail Transport System (ELRTS).

The Managing Director of BMRTL, Mr. N.Viswanathan, at a recent meeting with financial institutions, assured them that the report would be ready by August. The report would be prepared by the UB led-consortium and the BMRTL, partners in the project.

Incidentally, this is the first BOOT joint venture project in the country.

BMRTL was asked to prepare a revised feasibility report as the State Government found that the cost of the project, Rs.3000 crores, was on high as per the report submitted a few months ago by the consortium. The State wanted a fresh report bringing down the cost of the project.

Mr. Viswanathan while making a presentation to the benefit of financial institutions, pointed out that financing to this project would be on a "very special basis" and that even for the financial institutions and banks it would be unique. The funding institutions should consider this project as not only an extremely important and an immediate necessity for the City but also as one in which they should become partners by making equity contributions in addition to sanctioning long-term loans.

He said the project was estimated to cost about Rs.80-Rs.100 crores per km. The first phase of the project would be for a distance of 30-35 km and it was likely to be in the region of Rs.3000 crores. To make the project commercially viable, he suggested that the financial institutions make large equity contributions so that the interest liability on loans was kept at the minimum. Accordingly, he proposed a debt equity ratio of 1:1.

In this regard, he referred to the commitment of the State Government in not interfering with the tariff fixation mechanism till the project became commercially viable providing a 16-per cent rate of return on the net worth of the company. This should enable the company to fix tariff which were both affordable to travellers and at the same time make capital contributions attractive.

Hudco had taken the lead role of coordinating with other financial institutions and banks for mobilisation of resources for the project.

The financial institutions and banks while expressing their appreciation of the immediate need of the mass rapid transit system for the City and the steps taken by the State Government, evinced keen interest in financing such a big project, he said.

While the domestic financial institutions were keen on funding the project, it was exploring the possibility of tapping foreign financial institutions. However, it was felt necessary funds could be mobilised within the country from financial institutions and banks and even from the public. Such measures would be more economical and faster, it was felt.

Mr. Viswanathan urged the funding agencies to work in tandem to avoid delays in funding mega projects. Those who attended the meeting included officials from HUDCO, IDFC, SBI Caps and seven commercial banks.

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