BENGALURU: After several botched efforts to mobilise funds to meet the land acquisition costs of the 65.5-km Peripheral Ring Road (PRR), Chief Minister H D Kumaraswamy’s Cabinet on Monday decided to earmark Rs 4,500 crore for it from the state’s treasury.
Briefing the media on cabinet decisions, Law and Parliamentary Affairs Minister Krishna Byre Gowda said, “We will continue from where NICE (Nandi Infrastructure Corridor Enterprises) Road has been left off. The biggest hurdle in the project was land acquisition since no company was coming forward to compensate. Even the union government’s ‘Nagaram Mala’ scheme has been of no use. Hence, a tough decision was taken by the cabinet to fund the land acquisition cost by ourselves,” he said.
A decision on whether the construction of the eight-lane road will be done through public private partnership will be taken up later, he added.
The project was estimated to cost Rs 5,800 crore when it was first proposed in 2007. The cost later shot up to Rs 11,950 crore in 2014. It is now estimated to cost Rs 17,000 crore.
Nearly 1,810 acres of land spread across 67 villages are required for the PRR and the land acquisition cost alone touches Rs 8,100 crore, mainly due to the new Land Acquisition Act 2013 which has doubled costs.
The main funding body for the city’s infrastructure projects, Japan International Cooperation Agency, had expressed its willingness only to fund the construction cost and not the land acquisition aspects.
“The present increase projected in cost is due to the construction costs soaring as we have decided to make staggered payments to the contractor over a period of 15 years in the model we have billed as Hybrid Annuity Model. The interest cost too adds up,” said a top BDA official.