BMRTL to borrow Rs. 3,228 crores for metro rail

BMRTL to borrow Rs. 3,228 crores for metro rail

The Hindu

Borrowings to partly fund Rs. 6,296-crore project

# Rs. 1,600 crores to be borrowed from a consortium of domestic banks led by UTI Bank
# The banks have agreed to lend the money for a period of 17.5 years
# Japan Bank for International Cooperation is keen on providing Rs. 1,600 crores
# JBIC expected to decide on the loan proposal in October

BANGALORE: Bangalore Mass Rapid Transit Ltd. (BMRTL) will raise Rs. 3,228 crores from domestic and overseas sources to partly fund the Rs. 6,296-crore Bangalore Metro Rail Project, according to its Managing Director K.N. Shrivastava.

"Of the total debt component of the project, Rs. 1,600 crores will be borrowed from a consortium of domestic banks led by UTI Bank. All the prominent domestic banks have submitted sanction letters for financing the project, which is in excess of what we require," Mr. Shrivastava told The Hindu .

The domestic banks have agreed to lend the money for a period of 17.5 years and indicated an interest rate of 8.5 per cent. BMRTL hopes to bring down the rate to 7.5 to 8 per cent, he said.

Mr. Shrivastava also disclosed that Japan Bank for International Cooperation (JBIC) is keen on funding the Bangalore Metro Rail Project up to Rs. 1,600 crores. "BMRTL has proposed the project to the JBIC for funding. Negotiations are under way and the JBIC is expected to take a view on the loan proposal in October," he said.

Apart from the equity contribution of Rs. 1,000 crores each from the Centre and the State Government, the project funding will also comprise Rs. 360 crores as interest-free subordinated debt, Rs. 378 crores as interest subsidy during construction and Rs. 330 crores as debt service reserve (DSR) from the Centre and the State Government.

BMRTL will place its orders for rolling stock with the Bangalore-based public sector Bharat Earthmovers Ltd. (BEML), which has a technological tie-up with the South Korean firm ROTEM. "By the time the project is ready to procure coaches, BEML would have achieved a great deal of indigenisation on the manufacture of metro coaches from its technological tie-up," he said adding that the coaches will be assembled/manufactured here though 35 to 40 per cent of the components will be sourced from abroad.

The project, which has passed scrutiny of the Public Investment Board, will shortly be submitted to the Cabinet Committee on Economic Affairs for final approval. BMRTL is pushing for implementing the project on the standard gauge format.