The Bruhat Bengaluru Mahanagara Palike (BBMP) has received positive support for its underground vehicular tunnel project, aimed at easing the severe traffic congestion along the North-South corridor of Bengaluru. Nine banks have expressed interest in funding the ambitious project, which is set to connect Hebbal Esteem Mall Junction to Silk Board Junction through three-lane twin tunnels.
The project will be executed under the Build-Operate-Transfer (BOT) Toll model, which allows private investors to build and operate the tunnel before transferring it to the government. To provide more time for interested banks to submit their funding proposals, BBMP recently extended the deadline for bids to January 8, 2025.
BBMP’s Engineer-in-Chief, B S Prahlad, spoke to the Indian Express, saying, “Nine banks have shown interest in funding the tunnel road project, which is a promising development. However, the interest rates on the loans cannot be set arbitrarily. To allow the banks sufficient time to discuss and submit competitive bids, we decided to extend the deadline. This extension was also requested during the pre-bid meeting.” Once the bids are submitted, the government will evaluate them and choose the bank offering the most competitive rates.
Among the banks showing interest in the project are Indian Bank, Bank of India, State Bank of India, Canara Bank, Punjab National Bank, and REC Ltd. No foreign financing institutions have participated so far.
In August 2024, the state cabinet decided that the tunnel would be constructed as a toll road under a public-private partnership (PPP) model. The state government will provide 40% of the funding through viability-gap funding (VAF), and it will act as a guarantor for a loan of Rs 19,000 crore that BBMP plans to borrow for the project.
BBMP had issued an Expression of Interest (EoI) on December 6, 2024, seeking financing institutions to raise Rs 8,000 crore for the project, which includes costs for land acquisition. The initial deadline for submitting sealed bids was January 3, 2025, but it has now been extended to January 8, 2025.
The tunnel road project, an initiative of Deputy Chief Minister D K Shivakumar, has sparked criticism from civic groups and mobility activists. A recent study by Prof Ashish Verma from IISc raised concerns that tunnel roads and elevated corridors could negatively impact the public transport system by encouraging more people to switch from public to private modes of transport.
According to the feasibility report, the North-South Corridor will feature a 18 km underground tunnel, with three intermediate entry and exit points at Mekhri Circle, Racecourse, and Lalbagh. The project aims to reduce travel time from 90 minutes to just 20 minutes. The proposed toll fee for the tunnel is Rs 288 for the 18 km journey from Hebbal to Silk Board Junction.
