Bangalore Metro to raise Rs2,000 crore via tax-free bonds

In a move said to be the first of its kind, the Bangalore Metro Corporation Ltd (BMRC) is set to issue a tax-free 'metro bond' to raise Rs2,000 crore, to finance the first phase of the project.

The issue is awaiting clearance from the union finance ministry and is expected to hit the market in a few days, union urban development secretary Sudhir Krishna said on Friday.

"The Bangalore Metro is the pioneer among the metros to have proposed bonds to raise funds from the market. Our ministry has supported the proposal," Krishna said.

He commended efforts of the Karnataka government for trying different methods to raise funds for the Bangalore Metro Corp. He said the Karnataka government has raised infrastructure fund from cesses on sales tax, stamp duty and other means. Other states should learn form this, he said.

''Keeping in view the escalating cost, the centre is seriously considering PPP (public private partnership) and other alternative models to mobilise resources for metro projects,'' Krishna said, adding that the urban development ministry was suggesting alternative modes of transport to urban development authorities as the metro rail is a costly option.

He said factors like population of a city and viability are important for a metro project.