Bangalore Metro to issue tax-free bonds ::Business Line

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In a first for Metro transport sector in the country, the Bangalore Metro Rail Corporation Ltd (BMRCL) is set to issue tax-free ‘Metro' bonds to raise money for its expansion.

“The Bangalore Metro is the pioneer to have proposed Metro bonds to raise funds from the markets and that proposal our ministry has supported,” the Urban Development Secretary, Mr Sudhir Krishna, said here today.

With Finance Ministry

Mr Krishna said the proposal had already reached the Finance Ministry and expressed the hope that it would be cleared soon.

“We are hopeful of getting clearance from the Finance Ministry soon and it will be a landmark,” Mr Krishna said and added the Union Urban Development Ministry was also encouraging the other Metros to float bonds.

Infrastructure tax

“We have been recommending to other Metros to raise the funds from domestic market,” Mr Krishna said.

In reply to a question as to how much money the Bangalore Metro expected to raise through the bond, Mr N. Sivasailam, Managing Director of BMRCL, said “for Phase I, anything up to Rs 2000 crore would be sufficient.”

The Secretary also said the Karnataka Government had established an infrastructure tax by imposing cess on certain items, which could help funding projects such as the Metro.

Mr Krishna said his ministry had been recommending establishment of infrastructure tax for other state governments as well.

Commercial run

The Bangalore Metro began its commercial operations on a 6.75 km stretch from Baiyappanahalli in Bangalore city to M G Road station.

The first phase of Bangalore Metro, for which work is on, is expected to create a Metro line running up to 42. 3 km.

The total project outlay for the Bangalore Metro is Rs 11, 609 crore.