Friday, September 10, 2004

Metro Rail looks for corporate sponsorship

Metro Rail project may take corporate route
Times of India

Bangalore: Invest in Bangalore’s future — this is the new motto of the proposed Bangalore Metro Rail. With a whopping Rs 4,989 crore needed for the train transport that Bangalore desperately needs, the Bangalore Mass Rapid Transit Limited (BMRTL) has opted for the private investment route. The plan of action: “We are approaching every corporate house in the state, including all IT majors and asking them to invest in the project’s equity,’’ BMRTL managing director K.N. Shrivastava said.

The plan is not an initial public offering (IPO) or a scheme like the bond roads for Bangalore where the public invested. Instead, individual corporate houses will be offered equity shares in the project. BMRTL is confident of success, because Karnataka has developed a strong and successful history of private-public partnerships in the recent years.

The BATF, the Azim Premji Foundation’s learning guarantee programme to bring drop-out children back to school and the spanking Nirmala Bengaluru toilets of the Infosys Foundation among others are examples being emulated by other states. The targeted date to begin the first 7 km elevated phase of the Metro from Cubbon park to Byapannahalli is February, 2005. The financial closure date is November, 2004.

So BMRTL — which has been officially designated as the project implementation vehicle — is now scrambling to raise the funds needed. The Centre and state have to each pitch in Rs 899 crore as their equity share. Of the state’s share, Rs 494 crore has been collected in the BMRTL cess paid by Bangaloreans on petrol and diesel from 1995 for the project.

A financial model of how much is needed each year has been worked out for the rest of the money, which is expected to be cleared in the next state cabinet. The aim now is to raise between Rs 500 crore and Rs 1,000 crore from the corporate sector for the project. The intention: reduce debt component of Rs 2,338 crore for the project by increasing equity share. Result: cut down the repayment burden on the state.

But the appeal to the corporates is purely based on activism and sense of social responsibility. “We cannot promise the corporates any major fiscal returns for several years. The real returns are in terms of public health, savings on petrol and the time spent stuck in traffic, which every citizen is struggling with,’’ Shrivastava said.


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