Cabinet clears proposal to raise loans for Bengaluru Business Corridor Project (PRR) 

State cabinet approves loans for Bengaluru Business Corridor project, with compensation for affected farmers and unclear repayment options.

The State cabinet on Thursday, September 5, cleared a proposal to raise long-term loans for the implementation of the Bengaluru Business Corridor, formerly known as the Peripheral Ring Road. This decision comes in the light of two global tenders for the project failing to attract bidders and the State government deciding to implement the project by itself. 

The loan component will be 75% of the overall project cost, said Law and Parliamentary Affairs Minister H.K. Patil, briefing media persons after the cabinet meeting. However, the Cabinet decision doesn’t quantify either the estimated project cost or the quantum of loan intended to be raised. 

The Cabinet decision said that the State government would give a guarantee to the loans raised from finance institutions. However, the Cabinet decision leaves the option open on the mode of repayment of interest on these loans. It says the interest will be repaid either through Budgetary allocation from the State Budget or by the Bangalore Development Authority (BDA). 

The Cabinet on Thursday cleared a proposal to raise loans from institutions like REC Ltd., an Infrastructure Financing Company, Power Finance Corporation, and Housing and Urban Development Corporation (HUDCO). The Cabinet decision also said State government-owned enterprises with additional resources would also make capital investment in the project. 

The decision said the farmers who will lose lands will be given a compensation comparable to what they would otherwise be eligible under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This would essentially mean the compensation package would not be under the 2013 Act, which is the prime demand of landowners. The Cabinet also cleared a proposal to provide compensation in the form of Transferrable Development Rights (TDR) for those who voluntarily opt for it. BDA has notified 1950 acres for the project and the estimated cost to acquire these lands may breach the ₹20,000 crore-mark, it is estimated. 

Meanwhile, the Cabinet also decided that the Bengaluru Development Minister would not be the Chairman of the Special Purpose Vehicle (SPV) Bengaluru Business Corridor Ltd. as it was decided earlier. However, it doesn’t specify who would be its Chairman.