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Karnataka Seeks Urgent Financial Reforms for Bengaluru Metro Rail

Bengaluru (Karnataka) [India], November 13 (ANI): Karnataka Chief Minister DK Shivakumar on Friday submitted a memorandum to Prime Minister Narendra Modi seeking urgent policy and funding reforms for Metro rail projects, stating that the actual financial burden on states exceeds 80 per cent despite the stipulated 50:50 Special Purpose Vehicle (SPV) partnership between the Centre and the State.

In the memorandum (No. ACSCM/T/3403/2026) issued from Vidhana Soudha today, November 13, Shivakumar termed Bengaluru Metro a crucial lifeline and noted that with the inauguration of the 7.5-km stretch of the Pink Line, Namma Metro will cross 103 km, becoming the second-largest metro network in the country.

Describing Bengaluru as the fastest-growing metropolis, the Chief Minister said the city requires a metro network of at least 500 km and that the state government has set a goal of achieving 500 km over the next 10 years. Highlighting that Metro projects are implemented through a 50:50 Centre-State SPV, Shivakumar said the financial load borne by states is significantly higher in practice.

He pointed out that because the state bears the entire cost of land acquisition and shifting of utilities, 50 per cent of Central taxes, 100 per cent of State taxes, repayment of the entire foreign loan, and most cost escalations, the overall burden of building and running the metro goes beyond 80 per cent.

Outlining the reasons for rising project costs and the reforms sought, the Chief Minister said, "Significant delays in Central approvals drive up expenses, as clearances are granted on Detailed Project Reports (DPRs) costed at old prices without allowing cost escalations beyond the DPR submission date or factoring in updated estimates while freezing the Centre's share. He urged that approvals be made time-bound through regular PRAGATI reviews and the Prime Minister's direct attention."

Shivakumar also flagged the Centre's use of national average benchmarked rates to mark down project estimates, stating that this leads to cost overruns during implementation that the state must absorb entirely. He called for independent, city-specific costing reflecting realistic local conditions rather than national averages.

"Seeking parity with Delhi Metro, the Chief Minister urged the Centre to share foreign-exchange risks on external loans and take a share of Metro operational losses under the 50:50 equity structure. Citing rising interest rates and rupee depreciation that make multilateral foreign loans expensive, he requested the Centre to facilitate alternative, affordable long-term domestic financing routes in Indian rupees through national financial institutions," he said.

Pointing to delays in inspections and safety certifications caused by agencies across other ministries such as Railways, Shivakumar proposed that the Ministry of Urban Development establish a National Technical Institution for Metros so projects can choose from an empanelled list based on technical committee recommendations, speeding up approvals while supporting Indian technology and ensuring passenger safety.

Raising the issue of double-decker infrastructure, the Chief Minister noted that Bengaluru has a deficient road network covering only 8 to 9 per cent of the city's area against a requirement of 18 to 20 per cent, prompting plans for road flyovers beneath elevated Metro lines to save scarce and expensive land. Citing similar structures in Nagpur and Pune, he said Karnataka's proposal for double-decker corridors along the 42-km Phase 3 stretch had been significantly curtailed, and sought permission to build double-decker infrastructure wherever technically feasible, safe, and economically justified, affirming that the state is ready to bear the additional road expenditure.

Shivakumar also sought urgent approval for the proposed Red Line (Phase 3A) connecting Sarjapur to Hebbal, stating that the proposal was submitted in January 2025 and revised with reduced costs at the Centre's request. He said the corridor connects major residential and employment hubs, improves airport connectivity, and requires immediate clearance to start work and avoid further cost escalation.

Beyond urban transit, the memorandum raised three other pressing state issues, beginning with severe drought triggered by the second-lowest rainfall in 70 years. With 226 of 240 taluks declared drought-affected, nearly 58 lakh hectares of crops damaged, and estimated losses of Rs 62,482 crore alongside drinking water and fodder shortages, Shivakumar sought early approval and release of Rs 22,400.58 crore under the National Disaster Response Fund (NDRF), noting that Inter-Ministerial Study teams have already submitted their reports.

Drawing attention to sugarcane farmers demanding Rs 5,500 per tonne against the Fair and Remunerative Price (FRP) of Rs 3,650 for 2026-27, the Chief Minister noted that the Minimum Support Price (MSP) of sugar has remained at Rs 31 per kg since 2019 despite much higher open-market prices. He called for an urgent revision of sugar MSP considering production costs, realistic FRP fixation, and policy decisions that account for returns from by-products such as ethanol and power to ensure fair prices for growers.

On the Union Ministry of Environment and Forests' draft notification based on the Kasturirangan Report identifying 20,668 sq km across 1,449 villages in 10 Karnataka districts as Ecologically Sensitive Areas, Shivakumar said that while the state supports forest and wildlife protection, declaring the entire belt eco-sensitive would severely affect the lives and livelihoods of generations of farmers and families in nearly 1,500 villages. Citing the state's year-long request for a ground-level survey and a unanimous resolution passed by the Karnataka State Legislature, he urged the Centre to reconsider the notification in consultation with Karnataka.

The memorandum concludes "On behalf of the People of Karnataka" with the signature of D.K. Shivakumar, Chief Minister.

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