Bengaluru Business Corridor Gets Green Light For Long-Term Loans After Failed Tenders

The Karnataka State Cabinet recently approved a major step to secure long-term loans for the Bengaluru Business Corridor project, formerly known as the 73-Km Peripheral Ring Road (PRR). This move comes after two international tenders failed to attract bidders, prompting the state to proceed with the project independently.

State Law and Parliamentary Affairs Minister H K Patil announced after the recent cabinet meeting that the loans will cover 75% of the total project cost, according to The Hindu. However, the exact cost of the project and the loan amount have not been disclosed.

The state government will guarantee the loans obtained from financial institutions, with repayment options including allocations from the state budget or payments by the Bengaluru Development Authority (BDA).

Several financial institutions, including REC Ltd., Power Finance Corporation, and Housing and Urban Development Corporation (HUDCO), have been selected to fund the project, as per the report. Additionally, state-owned enterprises with surplus resources will also contribute capital.

Landowners affected by the project will be compensated in line with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act of 2013, though the package will differ from the Act's provisions, addressing a key demand from landowners. The cabinet has also approved the option of compensation through Transferable Development Rights (TDR) for those who choose it.

The BDA has set aside 1,950 acres for the project, with land acquisition costs expected to exceed ₹20,000 crore. The cabinet also decided that the Bengaluru Development Minister will not serve as Chairman of the newly formed Special Purpose Vehicle (SPV), Bengaluru Business Corridor Ltd., and a new chairman is yet to be named.