Centre defers Metro clearance

Bangalore's proposed metro rail project hits tariff wall

The Economic Times

The Centre has deferred its approval for the ambitious metro rail project for Bangalore, and has instead asked the state government for further information on the proposed tariff plan and equity sharing formula for the project.

Former prime minister Deve Gowda, had raised objections to the 33-km project, meant to provide an alternative means of public transport for the IT city. Among other things, he had said the tariff plans should be worked out in such a way that the common man could use the facility.

The public investment board (PIB) considered the proposal on Wednesday, but has decided to ask the Karnataka government to furnish additional details for the project by next week. Proposals approved by the PIB travel to the Cabinet for final approval by the government. Sources said the deferral should not significantly change the time horizon for the completion of the third metro rail project in the country, after Kolkata and Delhi.

The additional details asked for by the PIB include queries on the commercial viability of the project, including its proposed equity structure, expected to cost over Rs 5,600 crore, over a five-year period from ‘05-06. The Bangalore metro project would be partially financed by the Japan Bank for International Cooperation for about Rs 1,500 crore. The PIB has asked for details of how the rest of the funds would be made available, including the quantum of domestic debt.