Metro Rail on sound financial track

Metro Rail on sound financial track
Work On First 7-km Stretch May Start Next March
Times of India

Bangalore: The verdict is out: Despite a delay of 10 years and several transformations, the high-cost Bangalore Metro rail project has been stamped “financially and technically sound’’ by a top private bank.

The finding, by financial appraiser UTI Bank, has come as a shot in the arm for the Rs 4,989 crore project, which, till now has not gone beyond the drawing board. With the fiscal appraisal complete, the project — pegged as the solution to Bangalore’s traffic problems — has now been given a positive tag just prior to going before the state cabinet for clearance.

“As per the UTI appraisal, Bangalore Metro will be in the black — making profits — within eight years,’’ Bangalore mass rapid transit limited (BMRTL) managing director K.N. Shrivastava said.

For Bangaloreans who find life a daily struggle with traffic jams, the news is sweet. They have been paying for a dream metro rail to solve their problems since 1995 through the infrastructure cess on petrol and diesel.

As per the Bangalore Metro fiscal model — a variation on the Delhi Metro — the state government will have to annually give a sum of Rs 220 crore for five years. This is to be met from the identified fund source — infrastructure cess — which amounts to Rs 260 crore per year. The Centre will also have to come up with its share, another Rs 230 crore annually, for five years. But officials are confident that both Planning Commission and Union finance ministry approvals will be forthcoming for the same, as Bangalore Metro is on a priority list.

“A meeting is scheduled with the Union urban development ministry, where we expect their approval. We have done all the networking needed and have been assured support from central ministers from Karnataka to fast-track the project,’’ Shrivastava said.

BMRTL — which will be the special purpose vehicle to execute the Bangalore Metro project — is now working towards the tight deadline of November 30 to achieve financial closure. The UTI appraisal and project details are to be sent to banks and financial institutions (FI) in the next few days, though several FIs have already expressed interest in servicing the debt component of Rs 2,700 crore (58 per cent of project cost).

Once funding is tied up, work on the first 7 km from Cubbon Park (near the KSCA stadium) to Byappanahalli will begin by March 2005. And the first air-conditioned train is slated to roll out by 2009.