Union government likely to bear half of land acquisition cost of peripheral ring road

BENGALURU: The ambitious peripheral ring road (PRR) project on the northern side of Bengaluru not only stays but may also get a big chunk of funding from the Centre. The De partment of Industrial Policy & Promotion (DIPP) has “in principle“ agreed to fund half the land acquisition cost.

The 65-km project will connect Tumakuru Road with Hosur Road through Ballari Road and Old Madras Road. It will also be linked to the NICE expressway.

Chief Secretary Kaushik Mukherjee told ET that he has discussed the project with DIPP Secretary Amitabh Kant and has received a favourable response. “I have conveyed that this is a very special project as it falls in the Bengaluru-Chennai industrial corridor (BMIC) area, and is also very close to the proposed national investment & manufacturing zone (NIMZ).The land acquisition costs are a big component of the project. So the Centre has in principle agreed to bear half of that,“ he said.

Chief Minister Siddaramaiah stayed away from mentioning the project in his Budget speech on March 13 provoking fears that the government may have dropped the project in view of the steep land acquisition costs which have more than doubled in the past eight months. The Chief Secretary's clarification, however, sets at rest all those doubts.

The state government has been making a strong pitch for the Centre's assistance because Japan International Cooperation Agency (JICA), which is likely to fund the project, does not lend for land acquisition. The JICA limits itself to financing the project minus land costs.

The project cost is estimated at Rs 3,850 crore, while the compensation for land owners will be about Rs 8,100 crore, said PN Nayak, Engineer Member at Bangalore Development Authority (BDA), which is implementing the project. If the Centre does bear half the land costs, the state government will have to bear a sizeable chunk of the Rs 4,000 crore in land costs. The BDA will chip in a small portion.

The BDA has notified 1,989 acres of land for the project, and land costs have risen because the BDA will be paying the compensation to landowners as laid down under the new land acquisition law.