BMRTL chief flies to Delhi to speed up PIB approval

BMRTL chief flies to Delhi to speed up PIB approval

Vijay Times

Bangalore: With the Bangalore Mass Rapid Transit Ltd submitting its clarifications to the Public Investment Board (PIB) last week giving reasons for seeking a tax exemption of Rs 510 crore, the stage is now set for the Rs 6,296-crore project to take off pending PIB's approval later this week.

To speed up the process, K N Shrivastava, BMRTL managing director, left for New Delhi on Sunday for a meeting on Monday with the officials of Ministry of Urban Development who will advise the PIB over the tax exemption from the Centre.

BMRTL officials said that with the state government already offering an exemption of Rs 177 crore for the Metro rail project, it was now up to the Centre to offer exemption.

Sandeep Dash, Executive Director (Finance), BMRTL, told Vijay Times that tax exemption was sought only till the Metro became operational as the gestation period was too long. As far as the gauge issue was concerned, the project costs would increase by Rs 571 crore if broad-gauge was implemented.

The BMRTL stand is the Metro is a dedicated standard gauge transport system. These issues have been resolved by PIB 'in principle'. The tax exemption and standard gauge issues will later come up before the Cabinet Committee on Economic Affairs (CCEA) in New Delhi, which is expected to give the go-ahead.

BMRTL's recommendations also include increasing the present equity participation of Rs 1,000 crore each by the Centre and State governments to Rs 1,100 crore and a moratorium on the repayment of principle as there are no internal revenues for the Metro as it would start making profits only from the seventh year of its operation. The tax exemption could be absorbed through the increase in equity participation, he said. Tenders for the project, expected to start in July-August, have been called and the Karnataka Industrial Area Development Board (KIADB) has already given its green signal for land acquisition.

Officials told this paper that agencies such as IDBI and UTI had also come forward to fund the project over a 17-year term, while the balance has been sought through the floating of a 27-year bond for the next two phases of the project.
BMRTL officials say the sooner the project commences, the better as even a day's delay is costing them a whopping
Rs 80 lakh.