Bengaluru: Peripheral Ring Road (PRR), the 65-km-long eight-lane road that will seamlessly connect Tumakuru Road with Hosur Road and ease pressure off the Outer Ring Road (ORR), seems to be finally getting on track.
At a meeting on Monday, two Japanese firms showed readiness to help the Bangalore Development Authority (BDA) acquire a whopping 1,810 acres of land for the road. The meeting was attended by Bengaluru Development Minister K J George, representatives of Japan International Cooperation Agency (JICA), East Nippon Expressway Company Limited (Nexco), Additional Chief Secretary (Urban Development Department) Mahendra Jain, BDA Commissioner Rakesh Singh and other officials.
The BDA estimates the project to cost Rs 11,950 crore, of which Rs 9,000 crore will be spent on land acquisition alone.
JICA usually does not fund land acquisition and limits itself to financing the construction. Nexco is a major infrastructure company in Japan and is one of the main operators of expressways and tolls in that country.
“Finally, the Japanese firms have come around to seeing the BDA’s point of view on land acquisition. It’s a big-ticket project and we were not able to mobilise resources to acquire land. This was causing all the delay in signing an agreement with JICA for building the road. The Japanese firms have agreed to fund the land acquisition but only after conducting a feasibility study,” a BDA source said.
The BDA has already prepared the detailed project report. The state Cabinet has okayed creating a special purpose vehicle (SPV) for the PRR. Nexco and JICA will study the revenue aspects, income, expenses and profit. They will also ascertain the cost escalation by factoring in possible delays. “Since it was the first meeting, no concrete assurances were promised by the state government, but the Japanese firms have promised to submit their feasibility report in 30-45 days. The SPV will be formed and registered soon. Japanese engineers will be part of the SPV,” the BDA official said.
It was decided that based on the feasibility report and the Cabinet approval, the state, Central and Japanese governments will sign agreements on funding land acquisition and construction.
The meeting also discussed the funding pattern. “Nexco will hold 10% equity while the state government will have an equal share. The remaining 80% can be borrowed from JICA or any other agency depending upon the amount and the rate of interest,” the official said. But the conditions on which the land acquisition will be funded were not disclosed.
In September 2016, the BDA had released a new innovative method to mobilise resources. It also held a meeting with farmers, explaining the proposal of creating commercial zones around the PRR to raise money for the project. The BDA had proposed to create a 100-metre commercial zone along the PRR with service roads of 30 metres.