Railway board shows inability to fund Bengaluru Suburban Rail project

Bengaluru, India (Urban Transport News): The hurdles for the Rs 18,611 crore Bengaluru suburban rail project do not seem to end as the Railway Board now has shown its inability to fund the project. The Railway Board was expected to provide its 20% share i.e. Rs 3,772 crore towards the 148-km suburban rail project but extended support to the Railway authorities in Karnataka to monetize 600-acres of land.

The board has now instructed the Karnataka Railway Infrastructure Development Corporation (K-RIDE) to raise its share of funds by monetizing the railway land. According to the original plan, the Karnataka government and the Railway Board had agreed to provide 20% each of the total project costs which are currently estimated to Rs 18,611 crore. The Karnataka Railway Infrastructure Development Corporation (K-RIDE) was given the responsibility to raise the remaining 60% through different means including long-term loans from the financial institutions.

The Railway Board is saying that the estimated cost of land offered for the project is about Rs 5,000 crore, which is enough for implementing the much-delayed suburban rail project. Sources from Railway said that they are now requesting the Board to provide at least 10% of Rs 3,722 crore (i.e. Rs 372 crore) to kick-start the project as the process of monetising the land will take some time. The process of commercially exploiting the assets is time-consuming hence Board has been requested to provide viability gap funding.

The Bengaluru suburban rail project consists of four railway corridors with a total of 57 suburban stations. In November 2019, the Railway Board had given its nods for suburban rail project and now the project is awaiting approval from the Cabinet Committee on Economic Affairs (CCEA). Due to the unexpected delays in the approval process, the project implementing agency K-RIDE is also going slow with setting up a team of experts to carry out the project.