Cess on new layouts may fund Namma Metro phase II

Land transactions, buildings near corridors likely to be taxed

The Bangalore Metro Rail Corporation Limited (BMRCL) and other agencies involved in the implementation of the phase II of Namma Metro are toying with various ideas to generate funds. The project proposal is now with the Centre for clearance.

The State government has given an official in-principle approval for phase II of Namma Metro project, covering 72.095-km with 61 stations. The estimated completion cost of the project, the order said, is Rs 26,405.14 crore.

Among the proposed sources of funds, “levy and collection of cess from new layouts/new property developments” tops the list.

According to sources, “cess at five per cent of the market value of land or/and building in future property developments and new layouts is proposed to be levied under Section 18(A) of the Karnataka Town and Country Planning Act. The cess proceeds, to be credited to Metro Infrastructure Fund, will be shared by the BMRCL, BWSSB and BDA at 65 per cent, 20 per cent and 15 per cent, respectively, to finance the project directly by the BMRCL and to augment other civic infrastructure by other agencies.”

Delhi Chief Secretary P K Tripathi on Tuesday also favoured the Central government’s proposal to levy additional taxes on land transactions and buildings near Metro corridors.

Cess on Additional Area Ratio, including for properties along phase I, has also been proposed. “The Floor Area Ratio (FAR) up to 4.0 is proposed to be allowed for all properties lying within an influence area of 500 metre on either side of the alignment of both phase I and phase II.”

A part of the benefit accruing to property owners due to higher FAR will be collected through cess of 10 per cent for residential buildings and 20 per cent for commercial ones.
“The cess proceeds will be shared by the BMRCL, BBMP, BWSSB and BDA at 60 per cent, 20 per cent, 10 per cent and 10 per cent, respectively, for debt servicing of the senior term debt raised by BMRCL and for financing augmentation of civic infrastructure by other agencies.”

Phase II is proposed to be financed broadly through a similar financing plan as has been put together for phase I –– Karnataka will provide 30 per cent of the project cost as equity (15 per cent) and subordinate loan (15 per cent), the Centre will be requested to fund 25 per cent of the project cost as equity (15 per cent) and subordinate loan (10 per cent) and the remaining 45 per cent of the cost is proposed to be mobilised as senior term debt from external and domestic financial institutions.

It is also proposed that the State government provide financial support to BMRCL “for the cash shortfall, if any, during the operation period.”

Highlights

* Cost: Rs 26,405.14 crore
* Coverage: 72.095 km
* No. of stations: 61
* Completion: 2017-18
* Passenger capacity: 14.80 lakh per day