The wait for the 19.457 km Outer Ring Road metro from Silk Board to K.R. Puram (under Phase II - A) has gotten longer with the Bangalore Metro Rail Corporation Ltd. (BMRCL) cancelling the tender citing multiple reasons.
It may take several months for the BMRCL to float fresh tender for the project, which is expected to benefit a large number of working professionals.
Ajay Seth, MD, BMRCL said that the lowest bidder for the tender, IL&FS, is not in a position to take up the project owing to its ongoing financial crisis.
ADVERTISEMENT
“There are multiple reasons for cancelling the tender. One of them is the problem of IL&FS. They (IL&FS) are unable to carry on their current activity. We cannot simply go ahead and award them another contract,” he said.
He said tenders were floated for the project without tie-up for the finances. “There was the possibility of raising funds only from domestic agencies. Domestic debt is much costlier and given for a shorter duration. That would have affected the finances of the company badly. To raise funds from multilateral companies like JICA, tender documents and others should be vetted before they are floated,” he said.
The other issues are land ownership and non-shifting of utilities. “It is better to pause and move forward later,” he said, adding that in the coming months, the BMRCL will focus on land acquisition and shifting of utilities. "The BMRCL will seek the central government's approval for the project and approach multilateral agencies for financing. We will float the tender after a few months," said Mr. Seth.
ADVERTISEMENT
BMRCL will make sure that companies with suspect or weak financial position do not end up getting qualified.
The project, which includes 13 metro stations, is estimated to cost ₹4,202 crore. The State government had earlier asked the BMRCL to raise ₹1,100 crore through innovative financing to implement the project.