To make the much-deliberated and decade-old plan for the Peripheral Ring Road (PRR) project a reality, the Bangalore Development Authority (BDA) has come up with a new funding idea.
The BDA has chalked out a hybrid annuity model (HAM) with a maintenance period of 12 years. It is now before the government for clearance. This has been proposed as there has been no headway whatsoever regarding the PRR project for more than 12 years.
The officials are now pressing for HAM after the meagre allocation for the project in the recently announced state budget. Chief Minister H D Kumaraswamy sanctioned only Rs 1,000 crore for the year 2019-20 for the PRR, while the total estimated cost is Rs 17,200 crore. BDA officials pointed out that last year the same amount was announced, but not sanctioned.
“Land acquisition cost is Rs 8,100 crore. While an initial amount of Rs 3,000 crore can be raised through the transferable development rights (TDR) scheme, for the remaining Rs 6,100 crore, we have proposed the hybrid annuity model,” a BDA official told DH.
The official explained that under this model (HAM), the initial 40% of the cost advanced will be paid back by the BDA to the lender within a stipulated time period, which is yet to be decided. And the remaining amount will be paid in deferred payments further on.
However, if HAM is adopted the PRR will become 20-30% costlier. BDA officials say it is better than shelving the project. The construction will be financed by the Japan International Cooperation Agency (JICA) as assured.
“This idea has been discussed in detail. We need to start the project at least now. Under this, the lender will pay for the land acquisition, as unless compensation is given to the land losers, nothing can transpire on the ground. The lender will be paid on a yearly basis for a duration of 12 years,” the official said.
According to the official, a final notification has been issued and the road length is defined. But compensation is yet to be sanctioned to the land losers. As to acquire the land, at least Rs 5,000 crore is needed. Tenders can be called only when at least 80% of the land is under BDA’s possession.
BDA has said the PRR will be 65 km long connecting the Hosur Road to the Tumkuru Road. It will complete the existing semi-circular road -- the Nandi Infrastructure Corridor Enterprise (Nice) road. BDA needs 1,810 acres of land to execute the project.