BMCRL to approach JICA for funds, again

BENGALURU: The Bengaluru Metro Rail Corporation (BMRCL), which is executing projects amounting to over ?36,000 crore, is planning to seek financial assistance from Japan International Cooperation Agency (JICA). The international lender had funded a fourth of metro’s phase-I project.
BMRCL’s new managing director, Ajay Seth, said he would hold a meeting with JICA representatives in New Delhi in the next couple of days. “We are implementing phase II, which is a huge project. And then, we have to raise funds for phase II (A) and phase II (B). We are exploring the possibility of raising a loan from JICA,” Seth told ET.

There are two advantages, he said, of borrowing from JICA. “It’s a longtenure loan and the interest rate is fairly reasonable. We will first write to the state government and later approach the Union government for approval,” Seth added.

When asked for a response, JICA said: “JICA has supported phase-I of Bangalore Metro Project. No formal proposal has been sent to JICA for the funding of phase II of the project.”

BMRCL, while implementing the 42-km phase I, had borrowed two official development assistance loans from JICA — one in March 2006 and the other in June 2011, totalling ?3,500 crore. Two other lenders that funded phase I are Agence Française de Development (?873 crore) and Housing and Urban Development Corporation (?504 crore).

While Japan’s development lender offered the loan at an interest rate of 1.3% per annum, with a repayment period of 30 years, the French Development Agency charged 1.5% per annum with a repayment period of 20 years, according to BMRCL’s 2016-17 annual report.

JICA was unhappy with the inordinate delay in the completion of phase I, but stood by BMRCL to ensure that the project was completed. The lender, after studying the reason for slow progress, blamed the contractors in its report and hoped BMRCL would perform better in future projects.

BMRCL SHORT OF FUNDS
BMRCL is yet to raise enough funds required for the completion of the Rs 26,405-crore phase II. While BMRCL has managed to borrow from European Investment Bank (?3,600 crore) and Asian Infrastructure Investment Bank (?2,340 crore), the utility is still short of raising around ?5,000 crore.

The state and Union governments are providing ?14,000 crore. BMRCL is yet to approach external agencies for funds required for phase II (A) and phase II (B).