Bengaluru: The Bengaluru Development Authority’s (BDA) recent assertion that it can mobilize Rs 2,215 crore from internal resources for the three-tier underpass of the Bengaluru Business Corridor project has sparked intense debate over the financial prudence of the city’s flagship infrastructure plan. Critics have questioned the credibility of the BDA’s claims, citing its own communications last year which highlighted a severe lack of funds.
On August 16, 2024, BDA officials had formally written to the Additional Chief Secretary of the Urban Development Department, stating that the authority did not possess the financial resources to provide even 25 per cent of the total estimated Rs 7,000 crore required for the project. Despite this, BDA’s recent statements present the authority as financially self-sufficient, raising serious questions about transparency and accountability.
Sources within the BDA have reportedly expressed concerns that the argument of internal resource mobilization is unsound, given the authority’s precarious fiscal position. An earlier review by the Finance Department on September 3, 2024, also underscored the authority’s lack of funds for this ambitious project.
The apparent contradiction between the BDA’s previous and current financial positions has led to allegations that the government is attempting to project an image of fiscal capability that does not exist. Observers note that the authority’s claim of financial readiness for the three-tier underpass within a year appears implausible and suggests either mismanagement or deliberate misrepresentation.
The BDA, vested with statutory powers to execute comprehensive urban development projects in Bengaluru, has indeed undertaken several initiatives such as the Peripheral Ring Road developments and multi-lane expansions at Hebbal Junction. The authority has also been responsible for infrastructure and housing development in PRR-1 and PRR-2 zones. While BDA claims to have the necessary revenue to execute such projects, it has consistently failed to provide detailed financial strategies for land acquisition, construction, and maintenance costs related to the peripheral ring road and the Business Corridor plan.
For the Bengaluru Business Corridor project, approximately 2,560 acres of land need to be acquired at an estimated cost of ₹21,000 crore, with road construction requiring an additional ₹6,000 crore, totaling around Rs 27,000 crore. The BDA proposed two options to finance this massive undertaking.
The first option involves the state government providing the necessary funding as a grant, while BDA manages the construction and maintenance costs. The second option suggests sourcing funds as loans from central and state financial institutions or government banks, which typically offer only 75 per cent of the required project cost. The remaining 25 per cent, roughly Rs 7,000 crore, would have to come from BDA’s internal resources—a figure the authority itself previously acknowledged it could not mobilize without government support.
Furthermore, the BDA recommended that any land acquired for the project should be mortgaged to lending institutions, with exemptions on stamp duty for the collateral. Officials also highlighted the need for government guarantees to secure loans and cover interest payments, again pointing to a dependency on state intervention rather than autonomous financial strength.
Comments