Bengaluru tunnel road: Govt to stand as guarantor for Rs 19k-crore loan

Bengaluru: The state government will stand as guarantor for a whopping Rs 19,000-cr loan the BBMP wants to borrow to build the ambitious 16.6-km tunnel road between Central Silk Board and Hebbal.

And if the Bruhat Bengaluru Mahanagara Palike (BBMP) succeeds in implementing the project using private investment, a portion of the sanctioned loan would be used to fund a separate underground road between KR Puram and Nayandahalli, officials said.

The development comes after the BBMP completed the detailed project report (DPR) in a mere three months for the Silk Board-Hebbal section, which has been criticised by some activists who have raised concerns about the environmental and hydrological implications for the city. The consultant hired to prepare the DPR has also raised eyebrows.

On Dec 3, the finance department agreed to provide government guarantee to a loan of Rs 19,000 crore after examining the BBMP’s proposal to build one of the longest tunnel roads in urban limits. This is significant as the government appears to be showing clear intent on going ahead with the project despite skepticism over its long-term viability.

Armed with the nod from the finance department, the BBMP on Saturday invited expression of interest (EOI) from financial institutions and banks for raising loans for the project that is being referred to as ‘Bengaluru Twin Tube Project’.

The BBMP proposes to borrow the entire amount of Rs 19,000 crore in the next three years. It wants to withdraw the first instalment by April 2025 and the entire loan amount by December 2027.

Two projects

According to BBMP officials, there will be two stretches of underground roads: the North-South corridor, being planned between Esteem Mall junction in Hebbal and KSRP premises in Silk Board, will be taken up in the first phase.

The project is estimated to cost Rs 16,500 crore, excluding land acquisition. Of this, the BBMP hopes to provide Rs 6,500 crore as viability gap funding (VGF) while it expects private players to provide the rest.

In return, the civic body will offer toll collection rights, transferable development rights among others. Officials estimate the cost of land acquisition to be another Rs 2,500 crore. 

In the second phase, the BBMP has proposed to take up a 28-km underground road between KR Puram and Nayandahalli. The project is tentatively estimated to cost Rs 25,000 crore as the civic body is yet to start the work of preparing a DPR.

A senior BBMP official said the loan of Rs 19,000 crore would be either used to entirely fund the North-South tunnel corridor or may cover both the projects depending on the response from the bidders.

BBMP’s engineer-in-chief BS Prahlad said many metropolitan cities are proposing tunnel roads as a solution to address the burgeoning population and vehicle registrations.

“Chennai has already brought a tunnel boring machine to build an underground road. We expect Bengaluru's population to cross 2.5 crore in the next three years. The tunnel roads will be connected to four different exits, which is Bengaluru’s plus point,” he said.

However, experts are skeptical about the project. Apart from environmental and hydrological implications, some have also pointed out that Rodic Consultant Pvt Ltd, the agency tasked with preparing the DPR, was the authority engineer for the under-construction tunnel project in Silkyara, Uttarakhand, which collapsed in November last year.

It is also learnt that the consultant, which was expected to monitor the Rs 1,100-crore project for 48 months at a contract of Rs 42 crore, was blacklisted temporarily in some places such as New Delhi and Jammu and Kashmir.