Delay-hit Bengaluru metro seeks Rs 500 cr as overdraft

With losses piling due to the lockdown and delays in implementing Phase 2 of the metro projects, BMRCL is asking for Rs 500 crore as an overdraft from the banks. The corporation needs the money as it expects delays in the release of funds by the government.

In its mandatory disclosure to the National Stock Exchange, the Bangalore Metro Rail Corporation Limited (BMRCL) has said it suffered a Rs 74-crore loss in fare and non-fare revenue due to the shutdown of Namma Metro in April and May.

Even before the lockdown, the BMRCL’s safety measures had limited the number of riders. In March, officials had expected the revenue to hit Rs 40 crore, but the collection at the end of the month remained at Rs 24.35 crore. For 2019-20, the impact was marginal as the revenue touched Rs 430 crore against the target of Rs 445 crore.

This financial year, the corporation will bear the brunt of the losses due to the COVID-triggered shutdown because recovery of the operating costs is likely to be difficult soon.

With its labour force exiting Bengaluru, the corporation expects a three- to six-month delay in the execution of its Phase 2 projects. But it reiterated that some sections of the projects — most likely the extension lines to Anjanapura and Kengeri— would be operational in the second half of 2020.

Stating that there may be delays in the release of funds by the government from “out of budgetary allocation”, the corporation states: “In anticipation of such delays, the BMRCL has approached some of the banks for sanction of overdraft (bridge financing) of Rs 500 crore to meet contract-related payment obligations in a timely manner.”

‘No cash crunch’

BMRCL managing director Ajay Seth clarified that the corporation is not facing a cash crunch. “We have project funds and can use a small portion of that for a few months to fund fixed cost like salaries, and essential maintenance, among others. However, the project funds would have to be restored in due course,” he said, explaining the need for bridge financing.

The disclosure points out that strict social distancing would make revenue generation difficult even after full resumption of operations. The BMRCL has urged financial assistance from the government to meet its operations soon. To a question, Seth said the corporation was losing about Rs 25 crore per month when metro services were stopped. “The government provides support for cash losses based on audited accounts. We have got funds to cover losses up to 2018-19 and will get funds for 2019-20 (about Rs 40 crore for the whole year) during the current year.”