Fall of Rupee pushes up cost of Bangalore Metro

It may not be much when the total cost of the Bangalore Metro rail project is taken into account.

Published: 12th September 2013 08:09 AM  |   Last Updated: 12th September 2013 08:09 AM   |  A+A-

It may not be much when the total cost of the Bangalore Metro rail project is taken into account. But the fall in the value of the rupee has resulted in the Bangalore Metro Rail Corporation Limited (BMRCL) spending an additional `90 to 100 crore of public money to procure hardware for Phase 1 of the Metro project.

BMRCL managing director Pradeep Singh Kharola said the increase in costs is “marginal.”

Close to 75 per cent of the work on Phase 1 and 99 per cent of the procurement towards this have already been completed.

“Most of our contracts are rupee contracts. However, there are some items that have to be paid part in foreign currency- about 25 per cent of some signalling devices, head hardened rails and so on. Since a majority of the procurement is complete, the increase in costs is less than `100 crore,” he explained.

According to U A Vasanth Rao, general manager (finance), BMRCL procures hardware from over 26 countries including Spain, Austria and France.  These include signalling devices, hardware for tracks as well as parts of the train itself, which are brought here and then assembled. He said 70 per cent of the expenditure of `11,690 crore is in Indian currency and 30 per cent in foreign currency.  “If there is any procurement left, it is only for the underground station designing and most of these items are local,” he said.

The increase in costs will be balanced in the loans that BMRCL is getting from foreign banks like Asian Development Bank and JICA, Rao said.

When asked if Phase 2 costs are also likely to go up in the current situation, both Kharola and Rao said the project should take off before comments can be made.

The Phase 2 work is pending final clearance from the Union government while Phase 1 of the project is likely to be commissioned in 2015. The BMRCL had recently started internal trials along Reach 3 of Phase 1, from Sampige Road to Peenya Industrial Area. Kharola said that the line is likely to be commissioned in November.

The BMRCL has also written to the Railways’ Research Design and Standards Organisation to inspect and certify the work. This will be followed by certification by the Commissioner for Railway safety.

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