HSRL cost escalates

HSRL cost escalates
By P M Raghunandan,DH News Service, Bangalore:
The cost of the proposed High Speed Rail Link (HSRL) to Bangalore International Airport has shot up, and it is expected to rise further.



The project, which was initially estimated to cost Rs 3,800 crore, has now risen to Rs 4,332 crore, a jump of Rs 532 crore. It will further escalate by the time the State government and the project promoter (HSRL is to be implemented on BOT basis) ink the project development agreement, which in all probability will take another five to six months, official sources told Deccan Herald.

The State Cabinet, which met in Belgaum recently, had approved the revised cost of the project. The Delhi Metro Rail Corporation (DMRC), which prepared a detailed project report (DPR) for the HSRL in June 2007, had estimated the cost at Rs 3,800 crore.

The then Executive Committee of the Governor (during the President’s rule in 2007) had approved the project at the original cost. In fact, Governor Rameshwar Thakur had also written to both DMRC (the HSRL project consultant) and the State-run KSIIDC to expedite the project to prevent cost escalation. But the project progressed at a snail’s pace, leading to nearly 15 per cent increase in the cost.

Time wasted

Much time was wasted on the question of the starting point of HSRL. There was debate on whether it should be started at the Police Parade Grounds near M G Road, or from Byappanahalli. Later, the BJP government started to reconsider whether a HSRL or another mode of mass transportation was viable to BIAL.

As per the revised cost worked out by KSIIDC, the cost of land acquisition (48 hectares) will be Rs 532 crore. This has to be borne by the State government. The DMRC had initially estimated it to be around Rs 155 crore. This is over and above the Rs 135 crore equity participation by the government in the project.

VGF

According to official sources, the Cabinet has not taken five per cent escalation allowed in DPR into consideration, while approving the revised cost. But it has been decided in the cabinet to approach the Centre for the Viability Gap Funding (VGF) in case the promoter finds the project financially not viable, sources said.

As per the BOT model worked out by DMRC, the promoter will have to bear around Rs 3,500 of the total project cost. The remaining amount will come in the form of equity participation by the State and Central government (Rs 135 crore each), by BIAL (Rs 30 crore), and the land acquisition cost by State (Rs 532 crore), sources explained.

STATE NOD

The State Cabinet has approved integration of HSRL to BIAL, with Namma Metro at Minsk Square, the proposed mono rail at Hebbal, and phase II of metro rail at Yelahanka. The government is yet to conduct a survey for the proposed mono rail and phase II of Metro for Bangalore.