The Comptroller and Auditor General has flagged serious weaknesses in planning, land acquisition, execution and financial sustainability of the Bangalore Metro rail project, identifying a Rs 66,033.9 million (mn) overrun in land acquisition costs. The audit covered Phase one and Phase two of the project and scrutinised 117 contracts, concluding that the Bangalore Metro Rail Corporation Limited planned, valued and financed the works poorly. The auditor said this left commuters underserved and the public exchequer exposed.

The audit found that land requirements for corridors were not properly assessed and that improper estimation and acquisition delays drove the Rs 66,033.9 million increase. It noted Rs 2,947 mn in excess compensation after 46 landowners converted farmland to non?agricultural use around the time detailed project reports were filed. The report identified avoidable payments running into hundreds of crores and gaps in contract management and execution.

The business case rested on numbers that did not hold, with actual peak?hour peak?direction traffic for Phase one in 2021 ranging between 6,429 and 8,852, well below the 15,000 threshold that typically justifies a Heavy Metro. The auditor said there was no study to show how ridership could be improved to justify investment in Heavy Metro and urged realistic estimation linked to the city's mobility and transit?oriented development plans. It recorded that BMRCL continuously incurred cash losses during the period from 2013?14 to 2021?22 and was completely dependent on the Karnataka government to service debt as of 31 March 2023.

The report observed that despite an investment of about Rs 400,000 million in Phases one and two, the authorities and the corporation had not deployed value capture financing to mobilise resources. The auditor recommended using value created by metro investments to generate funds for future projects and ensuring that land earmarked for property development becomes available in time. It also urged that the corporation adopt a systematic approach to project timeframes to achieve an optimal time?cost trade?off.