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Metro's economy measures to save Rs 4,000 cr in Phase-2

DH News Service, Bengaluru, Sep 5 2017, 1:25 IST

Local resources instead of foreign agencies to cut costs

The utility has initiated a number of economy measures during the implementation of the 72-km-long Phase-2, which authorities hope will result in cutting costs by at least Rs 4,000 crore. DH file photo

The utility has initiated a number of economy measures during the implementation of the 72-km-long Phase-2, which authorities hope will result in cutting costs by at least Rs 4,000 crore. DH file photo

Having learnt lessons the hard way in the past, the Bangalore Metro Rail Corporation Ltd (BMRCL) has switched to economy mode for Phase-2 of the Namma Metro project.

The utility has initiated a number of economy measures during the implementation of the 72-km-long Phase-2, which authorities hope will result in cutting costs by at least Rs 4,000 crore.

The cost-cutting exercise is based on BMRCL’s experience of finishing Phase-1, the 42-km Metro rail network that was launched in June after having missed nine publicly-announced deadlines and incurring an increase in the project cost from Rs 8,158 crore to Rs 13,845 crore.

“We have done away with general consultants for Phase-2. They charged a lot of money for the first phase,” additional chief secretary (urban development) Mahendra Jain said. This measure alone will help BMRCL save Rs 1,584 crore. “After having finished Phase-1, BMRCL has enough in-house expertise to implement the Metro project,” Jain said.

Foreign talent was an integral part of planning and implementing the first phase of Namma Metro. However, the dependence on foreigners has been “substantially” reduced for Phase-2, authorities say. Also, the BMRCL wants to award 50% of systems contracts — supply of equipment — to local companies. This measure, authorities believe, will help avoid cost overruns due to fluctuation in foreign currency during import of equipment. Also, BMRCL has decided to standardise the designs of all stations in Phase-2 to achieve “fiscal prudence”.

According to Jain, such measures can also keep the total project cost, which currently stands at Rs 26,405 crore, from going up. Of the Rs 26,405 crore, the Centre and the State will grant Rs 5,281 crore and Rs 8,983 crore respectively. BMRCL has to raise Rs 12,140 crore in the form of debt.

So far, the European Investment Bank has granted a loan of Rs 3,650 crore and the Agence Francaise de Development (AFD) has lent Rs 1,500 crore.

Phase-2 will connect Byappanahalli to ITPB-Whitefield, Mysuru Road to Kengeri, Hesaraghatta to BIEC, Puttenahalli cross to Anjanapura, Gottigere-IIMB-Nagawara and RV Road to Bommasandra. The deadline for this is December 2020.

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