The state government will foot the land acquisition cost for the Peripheral Ring Road (PRR) in the form of a loan to the Bangalore Development Authority (BDA). The loan amount? A whopping Rs 10,000 crore.
The Cabinet has decided that the government will bear the full cost of land acquisition for the 65-km road project touted as a major solution to decongest Bengaluru. A total of 1,810 acres of land spread across 67 villages or settlements have been marked for acquisition. The cost of the project is pegged at about Rs 17,000 crore.
According to the plan drawn up by the Urban Development Department, the government will provide a loan of Rs 1,000 crore this year, Rs 2,000 crore next year, Rs 3,500 crore for 2020-21 and 2021-22 each. “This loan is for land acquisition,” Additional Chief Secretary (Urban Development) Mahendra Jain said.
The decade-old project will connect four highways - Tumakuru Road, Ballari Road, Old Madras Road and Hosur Road - to create seamless connectivity with Kanakapura Road and Mysuru Road, two other major highways connecting Tamil Nadu and Kerala.
Authorities will still try to push for alternatives such as the Transfer of Development Rights (TDR) and land-to-land compensation. “The corridor is too important for our city. We can’t keep waiting forever before we start the work. We will raise sizeable resources through other means, but the government stands by to pitch in for the rest,” Jain said.
A special purpose vehicle of the BDA, which will execute the project, will get the government loan.
The surplus revenue generated from the PRR project - change of land use, premium floor-area ratio, betterment tax etc - will be added to an infrastructure fund the government will create to sustain the project.
After taking loan from the government till 2021-22, the project will be funded from this infrastructure fund till the year 2032, according to the UDD plan. “This is the projected cash flow to justify the loan, that the project is financially viable and will be able to sustain the loan,” Jain pointed out.
Urban evangelist V Ravichandar is not convinced. “This is a short-sighted approach and doesn’t help improve the adjoining area. Consequently, the side roads and the neighbourhood stays underdeveloped with poor inter-road networks,” he said.
The government could have explored a mix of town planning and land pooling where landowners gained with overall area development and the state gained with significantly lower cost of land acquisition, he said.