The Comptroller and Auditor General of India (CAG) has flagged serious weaknesses in the planning, land acquisition, execution and financial sustainability of the Bangalore Metro Rail Project, pointing to a ₹6,603.39 crore overrun in land acquisition costs, avoidable payments running into hundreds of crores, and a network that “has been continuously incurring cash losses” and remains “completely dependent” on the Karnataka government to service its debt.
The report, tabled in Parliament on Monday, covering Phase 1 and Phase 2 of the rail project by Bangalore Metro Rail Corporation Limited (BMRCL), scrutinised 117 contracts and concluded that the corporation planned, valued and financed the project poorly, leaving commuters underserved and the exchequer exposed.
“Land requirement for metro corridors was not properly assessed,” the auditor said, adding that improper estimation and acquisition delays drove the ₹6,603.39 crore increase. On top of that, BMRCL paid ₹294.7 crore in excess compensation after 46 landowners converted farmland to non-agricultural use around the time detailed project reports were filed.
The business case, the CAG says, rested on numbers that did not hold. Actual peak-hour peak-direction traffic for Phase 1 in 2021 ranged between just 6,429 and 8,852 — far below the 15,000 threshold that justifies a Heavy Metro. “There was no study to show how ridership could be improved to justify investment in Heavy Metro,” the report said.
“In view of insufficient revenue to meet External Debt Repayment obligations due to continuously incurring cash losses during the period from 2013-14 to 2021-22, BMRCL is completely dependent on GoK to service the debt raised for the project as of 31 March 2023,” the auditor noted.
Despite investment of about ₹40,000 crore in Phases 1 and 2, the report said the governments and BMRCL had also not been able to deploy Value Capture Financing principles. The CAG has recommended using value created by Metro investments to generate resources for future projects and ensuring land earmarked for property development becomes available in time.
Among its recommendations, the auditor urged that ridership be estimated realistically using the city’s mobility and transit-oriented development plans.
It also said that BMRCL should adopt a systematic approach while determining the project timeframe to ensure a time-cost trade-off to derive the most optimum time at which the cost is the lowest.
