Karnataka Laws Raise Questions Over Bengaluru Tunnel Road
Bengaluru Smart Infrastructure Ltd opened bids under a special purpose vehicle set up by the state government, with the Adani Group emerging as the lowest bidder at Rs 222.67 billion (bn) against government estimates of Rs 176.98 billion (bn). For the first package the Adani Group bid Rs 108.67 bn against the government's estimate of Rs 87.7 bn, while in the second package the bid was Rs 114 bn against the estimate of Rs 89.28 bn. The bid for the first package was about 24 per cent higher and for the second about 28 per cent higher than estimates.
The project is structured under a build-operate-transfer model that envisages 40 per cent government funding with the remaining investment from private concessionaires. The bids were invited when D K Shivakumar was deputy chief minister with responsibility for Bengaluru's development between May 2023 and May 2026, and he had said the project would ease traffic in central areas. On the gap between bids and estimates he had argued that the government would not pay money to the bidder and that the bidder would invest while the state provided only 40 per cent of its estimate.
The passage of two related bills a day after Gautam Adani met the minister has added to controversy, and the chief minister's office described the encounter as a courtesy visit. The home minister said the meeting related to the Adani Group's role as a government contractor and was not inappropriate, and he noted that the group already operates projects in the state including an ACC cement facility at Chittapur and the Mangalore Airport. The timing of the legislation and the meeting has fuelled scrutiny of the procurement and governance arrangements.