Stay updated with the latest - Click here to follow us on Instagram
Journalism of Courage
Premium
This is an archive article published on January 2, 2025
9 banks express interest in funding Bengaluru underground tunnel project
The BBMP also extended the submission deadline for the project’s funding bids to January 8, 2025.
The tunnel will be constructed as a toll road in a public-private partnership model with 40% viability-gap funding by the Karnataka government. (Express File/Representative Photo)
The Bruhat Bengaluru Mahanagara Palike’s (BBMP) underground vehicular tunnel project aimed at decongesting the city’s notorious traffic along the North-South corridor has received a shot in the arm, with nine banks expressing interest in funding the project.
The project, which involves constructing three-lane twin tunnels connecting Hebbal Esteem Mall Junction to Silk Board Junction, is set to be executed under the Build-Operate-Transfer (BOT) Toll model. The BBMP, in a corrigendum issued recently, also extended the submission deadline for the project’s funding bids to January 8, 2025, allowing additional time for interested parties to formalise their proposals.
B S Prahlad, engineer-in-chief, BBMP, speaking to Indian Express said: “Nine banks have shown interest in funding the tunnel road project, which is a promising development. However, the interest rate on the loans cannot be arbitrarily determined. To ensure the banks have adequate time to discuss and submit competitive bids, we have decided to extend the deadline. They had also asked for the same during the pre-bid meeting. Once the bids are submitted, the government will evaluate them and finalise the bank offering the most competitive rates.”
Another BBMP official said: “Some of the banks that have shown interest in the project are Indian Bank, Bank of India, State Bank of India, Canara Bank, Punjab National Bank, and REC Ltd, among others. No foreign financing institutions have participated.”
State government to act as guarantor for Rs 19,000-crore loan
During a cabinet meeting in August last year, it was decided that the tunnel would be constructed as a toll road in a public-private partnership (PPP) model with 40 per cent viability-gap funding (VAF) by the state government. The state government will stand as guarantor for a whopping Rs 19,000-crore loan the BBMP wants to borrow to build the tunnel road.
As part of the same, BBMP had called an Expression of Interest (EoI) from financing institutions on December 6, 2024. The last date for submitting sealed bids to the Special Commissioner (Finance), BBMP, was January 3, 2025, which has now been extended to January 8. The EoI was called for raising a loan amount of Rs 8,000 crore, which would cover land acquisition costs, among others.
The tunnel road – an ambitious project of Deputy Chief Minister D K Shivakumar – comes amid severe criticism from civic groups and many mobility activists. A recent IISc study by Prof Ashish Verma, “Scenario Evaluation for the Proposed Suburban Rail Network and Metro Rail Network for the Bangalore Metropolitan Region (BMR)”, shows that the introduction of tunnel roads and elevated corridors could significantly impact public transport system and encourage people to shift from public to private modes of transport.
Story continues below this ad
As per the feasibility report, the North-South Corridor starting from Hebbal Esteem Mall Junction to Silk Board KSRP Junction is going to be developed as an underground vehicular tunnel having three intermediate locations connected via ramps for entry and exit into the main tunnel at Mekhri Circle, Racecourse, and Lalbagh, therefore reducing travel time from about 90 minutes to 20 minutes. The report also proposes a toll fee of Rs 288 to travel just 18 km from Hebbal to Silk Board junction.
© The Indian Express Pvt Ltd
Advertisement
Loading Recommendations...
Advertisement
Live Blog