CAG Flags Planning And Land Cost Issues In Bangalore Metro
RAILWAYS & METRO RAIL

CAG Flags Planning And Land Cost Issues In Bangalore Metro

The Comptroller and Auditor General of India (CAG) has identified multiple deficiencies in planning, land acquisition, execution, financial management and operations of the Bangalore Metro Rail Project implemented by Bangalore Metro Rail Corporation Limited (BMRCL). The CAG presented Performance Audit Report No. seven of 2026 in Parliament and noted shortcomings that it said undermined project returns and operational performance. BMRCL is a 50:50 joint venture of the Centre and the Karnataka government and the audit covered phases one and two up to March 2021, with selected contract progress reviewed to March 2023.

Commercial operations of Phase one began in a phased manner from October 2011 and were fully operational by June 2017 over 42.30 kilometres, while Phase two services commenced partly between January 2021 and March 2023 over 27.36 kilometres with the balance planned for completion by December 2026. The audit stated that Phase two detailed project reports were prepared without a comprehensive mobility plan, transit oriented development strategy or coordinated land use policy, which the CAG said limited the case for heavy metro investment.

The audit found that projected peak hour peak direction traffic figures were significantly higher than actual levels in 2021, with PHPDT ranging from 6,429 to 8,852, and that ridership assumptions used to calculate financial and economic returns appeared to have been overestimated. Improper land estimation and delays in acquisition were reported to have increased land acquisition cost by Rs 66.03 bn. The report identified excess land compensation of Rs 2.95 bn, additional interest paid of Rs 1.87 bn at 12 per cent for delayed notifications, and taxes in estimates of nine civil contracts that raised costs by Rs 12.22 bn.

The CAG further observed that BMRCL remained dependent on the Karnataka government to service project debt owing to insufficient revenue and cash losses, with actual farebox revenue of Rs 17.58 bn against projected revenue of Rs 77.37 bn during 2016-17 to 2022-23. The audit attributed low ridership to factors including lack of integration with city bus services, inadequate last-mile connectivity and insufficient parking. It also noted that 0.223 mn of 0.246 mn sq ft of built-up area at stations remained vacant, causing an estimated loss of Rs 385.30 mn in lease-rent revenue during 2019-22.

The Comptroller and Auditor General of India (CAG) has identified multiple deficiencies in planning, land acquisition, execution, financial management and operations of the Bangalore Metro Rail Project implemented by Bangalore Metro Rail Corporation Limited (BMRCL). The CAG presented Performance Audit Report No. seven of 2026 in Parliament and noted shortcomings that it said undermined project returns and operational performance. BMRCL is a 50:50 joint venture of the Centre and the Karnataka government and the audit covered phases one and two up to March 2021, with selected contract progress reviewed to March 2023. Commercial operations of Phase one began in a phased manner from October 2011 and were fully operational by June 2017 over 42.30 kilometres, while Phase two services commenced partly between January 2021 and March 2023 over 27.36 kilometres with the balance planned for completion by December 2026. The audit stated that Phase two detailed project reports were prepared without a comprehensive mobility plan, transit oriented development strategy or coordinated land use policy, which the CAG said limited the case for heavy metro investment. The audit found that projected peak hour peak direction traffic figures were significantly higher than actual levels in 2021, with PHPDT ranging from 6,429 to 8,852, and that ridership assumptions used to calculate financial and economic returns appeared to have been overestimated. Improper land estimation and delays in acquisition were reported to have increased land acquisition cost by Rs 66.03 bn. The report identified excess land compensation of Rs 2.95 bn, additional interest paid of Rs 1.87 bn at 12 per cent for delayed notifications, and taxes in estimates of nine civil contracts that raised costs by Rs 12.22 bn. The CAG further observed that BMRCL remained dependent on the Karnataka government to service project debt owing to insufficient revenue and cash losses, with actual farebox revenue of Rs 17.58 bn against projected revenue of Rs 77.37 bn during 2016-17 to 2022-23. The audit attributed low ridership to factors including lack of integration with city bus services, inadequate last-mile connectivity and insufficient parking. It also noted that 0.223 mn of 0.246 mn sq ft of built-up area at stations remained vacant, causing an estimated loss of Rs 385.30 mn in lease-rent revenue during 2019-22.

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