Bangalore metro rail project Phase-I cost is likely to rise by Rs 2,000 crore due to the rising price of raw materials.

Currently, the Bangalore Metro Rail Corporation Ltd (BMRCL) has undertaken a mid-term appraisal of the project, as most of the tenders have been finalised. The exact escalation in the cost will be calculated only after the mid-term appraisal, which is to be submitted to the Karnataka Government by November 2009.

The overall cost is expected to cross Rs 10,000 crore, which is higher than the current estimate of Rs 8,158 crore. The costs of cement and steel have more than doubled, compared to 2005, when the project was estimated and finalised.

The cost escalation is expected to have an effect on the funding pattern of the project. For the initial sanction of Rs 6,395 crore, the funding pattern comprised equity of 15 per cent each from the state and the Union Government, subordinate debt of 10 per cent from the Union Government and 15 per cent from the state, 28 per cent as loan from Japan Bank of International Cooperation (JBIC) and 17 per cent through local financial institutions.

Also See:

Bangalore Metro withdraws NEC's 25 per cent of Namma Metro contract (18-Feb-09)