BDA to borrow ₹27,000 crore loan from HUDCO for the Peripheral Ring Road project

The Bangalore Development Authority (BDA) has decided to take a loan of ₹27,000 crore from Housing and Urban Development Corporation Limited (HUDCO), a union government PSU for the Peripheral Ring Road project. 

BDA had floated global tenders twice to get private investment into the project. However, both failed to attract any bidders. Following this, the state cabinet decided to fund and implement the project itself.

This was decided on Thursday at a meeting chaired by the Deputy Chief Minister and Bengaluru Development Minister D. K. Shivakumar. The loan will be taken at an interest of 9%. However, the meeting also discussed negotiating the interest rate with the HUDCO. “The BDA will negotiate with the HUDCO to reduce the interest rate a little,” said an official. 

The estimated cost of the 73 km PRR project is ₹27,000 crore. This means the HUDCO will be fully funding the ambitious pending project. Earlier there was a plan to borrow loans from multiple agencies including HUDCO.  Japan International Cooperation Agency (JICA) had earlier approved a loan of over ₹3000 Crore for the road works. However, that did not take off as land acquisition costs ballooned and the state government did not have the money to fund the same.

The official said the BDA will be acquiring land and compensation will be given based on near market value. But the compensation price will be decided under the BDA Act, 1976 and not The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, as is being demanded by farmers. The BDA will directly negotiate with farmers in this connection, the official said.

Published - November 20, 2024 10:51 pm IST