The Asian Development Bank (ADB) will extend up to $250 million for a metro rail system in Bangalore that will bring substantial economic and environmental benefits to the fast-growing city.
The Board of Directors of ADB on Friday approved the loan for the Bangalore Metro Rail Corporation Ltd (BMRCL), which will partly fund 42.3 kilometres of the track, rolling stock, stations and equipment for two corridors in the city.
The project is estimated to cost Rs 11,609 crore for Phase-I comprising 42.3 kms in two corridors. Of the 42.30 km, 8.822 km will be underground near the City Railway Station, Vidhana Soudha, Majestic and City Market and most of the rest will be elevated. The first phase is likely to be completed in 2013.
BMRCL, which is presently conducting the test runs, had announced the launch of the first reach of 7.5 kms on April 4. However, the launch date has been postponed indefinitely as the commissioner for railway safety is yet to give the clearance for its commercial launch. The BMRCL is also yet to complete work on the stations and put in place a proper ticketing system.
BMRCL is a special purpose vehicle, jointly owned by the Government of India and government of Karnataka. Both the Centre and state governments have taken a 15 per cent equity each in the project. The East-West corridor, connecting Byappanahalli to Mysore Road terminal covers a distance of 18.10 kms and the North-South corridor from Hessaraghatta to Puttenahalli covering 23.70 kms. The entire Phase-I is scheduled for completion by September 2012.
The Bangalore Metro is likely to decongest the city, relieving the pressure on the roads in Bangalore which has over 4 million vehicles, registered, and 1,300 new vehicles being added every day.
Once operational, the Bangalore Metro is expected to reduce the travel time to around 33-44 minutes on each of its corridors (end to end). Presently, the average time spent in a city bus on the Metro routes takes close to two hours during the peak time.
“The project - ADB’s first metro rail project in South Asia - will provide Bangaloreans multiple benefits including reduced road congestion and pollution, and a safer, faster, fuel-saving public transport system for the city. Its innovative financing model should lead to a faster development of urban transport in India by catalysing commercial debt and private finance,” said Anouj Mehta, Focal Point for Public-Private Partnerships (India) and Senior Infrastructure Finance Specialist in ADB’s South Asia Department.
Bangalore, the capital of Karnataka and renowned for its information technology and biotechnology industries, is one of the fastest-growing urban centres in the country with a population now in excess of 6 million. However, an overloaded public bus system and soaring use of cars and motorbikes are undermining growth opportunities and degrading the environment.
“The project is pioneering the use of non-sovereign public sector lending modality with excellent replication potential for India and Asia. This is amongst the first major metro rail systems in India to use a leveraged finance model combining government funds with commercial loans. It is a critical model therefore for infrastructure development in other cities in India given the accelerating demand for timely infrastructure provision,” said Hayato Hoshi, Investment Specialist in ADB’s Private Sector Operations Department.
The project is also funded by an official development assistance loan from the Japan International Cooperation Agency via on-lending from the government of India alongside senior loans from commercial sources. For 2011-12, the state government has announced a financial assistance of Rs 683 crore in the budget. So far, the government has released Rs 2,600 crore for the project.
