BENGALURU: The Karnataka Cabinet on Thursday gave administrative approval for borrowing `7,438 crore (60% of the total estimated project cost) for the much awaited Bengaluru Suburban Rail project, from donor and lending agencies.While the initial cost was estimated at `18,621 crore, it has since been reduced to `15,767 crore by opting for a PPP (public-private partnership) model for procurement, operation and maintenance of rolling stock to bring down capital cost. Of the total, the Union and Karnataka governments are to fund 20 per cent each. Apart from the equity amount, Karnataka will also fund the cost of land, State GST, interest during construction and front-end fee.
“As per suggestions of the Union Finance Ministry and Railway Ministry, `7,438 crore can be borrowed via a Special Purpose Vehicle. The project will cover four corridors, with a total route length of 148.17 km and 62 stations,” said Law and Parliamentary Affairs Minister J C Madhuswamy.
Sources hinted that the state is looking to raise loans at an interest rate of 1.4% for a period of 30 years with repayment starting in 2029. The loan guarantees for the 60 per cent borrowing is proposed to be shared equally between State and Union governments.
Land belonging to Railways and the State Government is proposed to be leased at a nominal lease of Re 1 per acre while the cost of private land to be acquired will be borne by the state. The project is projected to be completed in six years. The revenue per year from the completed suburban rail project is estimated at `1,378 crore.