In a first for the metro transport sector in the country, the Bangalore Metro Rail corporation Limited (BMRCL) is set to issue tax-free ‘Metro’ bonds to raise money for its expansion.
“The Bangalore Metro is the pioneer among the metros to have proposed Metro bonds to raise funds from the markets and that proposal our ministry has supported,” Urban Development Secretary Sudhir Krishna said here on Friday. Krishna said the proposal had already reached the Finance Ministry and expressed the hope that it would be cleared soon. “We are hopeful of getting clearance from the Finance Ministry soon and it will be a landmark,” Krishna said and added the Union Urban Development Ministry was also encouraging the other metros to float bonds.
“We have been recommending to other metros to raise the funds from domestic market,” Krishna said. In reply to a question as to how much money the Bangalore Metro expected to raise through the bond, N Sivasailam, the Managing Director of the BMRCL, said “for Phase I anything upto Rs 2,000 crore would be sufficient.” The Urban Development Secretary also said Karnataka government had established an infrastructure tax by imposing cess on certain items, which could help funding projects like the Metro.
Krishna said his ministry had been recommending establishment of infrastructure tax for other state governments as well.
The Bangalore Metro began its commercial operations on a 6.75 kilometre stretch from Baiyappanahalli in Bangalore city to M G road station. The first phase of Bangalore Metro, for which work is on, is expected to create a Metro line running up to 42.3 kilometres. The total project outlay for the Bangalore Metro is Rs 11, 609 crore.