Karnataka cabinet greenlights loan proposal for Bengaluru Business Corridor: Report

The Karnataka State Cabinet has approved a proposal to secure long-term loans to fund the Bengaluru Business Corridor project.

The Karnataka State Cabinet on Thursday approved a significant move to secure long-term loans for the Bengaluru Business Corridor project, previously known as the Peripheral Ring Road (PRR). This decision follows the failure of two international tenders to attract bidders, prompting the state to proceed with the project independently.

The BDA has earmarked 1,950 acres for the project, with land acquisition costs potentially exceeding ₹20,000 crore. (X)

State Law and Parliamentary Affairs Minister H K Patil, addressed the media after the most recent cabinet meeting and revealed that the loans will cover 75 per cent of the total project cost, The Hindu reported. However, specific figures for the project's overall cost and the exact loan amount have not been disclosed.

Under the new plan, the state government will guarantee the loans obtained from financial institutions, the report noted. The method for repaying the loan interest remains flexible, with options including allocation from the state budget or payments by the Bengaluru Development Authority (BDA).

The cabinet has selected several financial institutions, including REC Ltd., Power Finance Corporation, and Housing and Urban Development Corporation (HUDCO), to provide the necessary funding, the publication stated. Additionally, state-owned enterprises with surplus resources will also contribute capital to the project.

For landowners impacted by the project, compensation will align with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013. However, the compensation package will be distinct from the provisions of the 2013 Act, which had been a key demand from landowners, the report added. The cabinet has also approved compensation in the form of Transferable Development Rights (TDR) for those who opt for it voluntarily.

The BDA has earmarked 1,950 acres for the project, with land acquisition costs potentially exceeding ₹20,000 crore. Additionally, the cabinet has decided that the Bengaluru Development Minister will not serve as the Chairman of the newly formed Special Purpose Vehicle (SPV), Bengaluru Business Corridor Ltd., though a replacement for this role has not yet been named.