Karnataka Deputy Chief Minister DK Shivakumar’s ambitious underground vehicular tunnel project, aimed at easing traffic congestion along Bengaluru’s North-South corridor, has garnered interest from nine banks willing to finance the Rs 19,000-crore venture.
The project proposes three-lane twin tunnels connecting Hebbal Esteem Mall Junction to Silk Board Junction under the Build-Operate-Transfer (BOT) Toll model. In a recent corrigendum, the Bruhat Bengaluru Mahanagara Palike (BBMP) extended the deadline for funding bids to January 8, 2025, to allow banks more time to finalise proposals.
According to reports, nine banks have shown interest in funding the tunnel road project, which is a promising development. To ensure competitive bids, we have extended the submission deadline following requests made during the pre-bid meeting. Once the bids are in, the government will evaluate and finalise the bank offering the most competitive rates.
Prominent Indian banks, including Indian Bank, Bank of India, State Bank of India, Canara Bank, and Punjab National Bank, have expressed interest, Indian Express reported.
The state government will act as the guarantor for the Rs 19,000-crore loan required for the project. During an August cabinet meeting, it was decided that the tunnel would be developed as a toll road under a public-private partnership (PPP) model, with the state providing 40% viability-gap funding (VGF).
BBMP had called for an Expression of Interest (EoI) on December 6, 2024, for a loan of Rs 8,000 crore, covering land acquisition and other costs. Initially, the deadline for bids was January 3, 2025, but the BBMP extended it by five days.
The North-South Corridor, spanning 18 km, is planned as an underground vehicular tunnel with intermediate ramps at Mekhri Circle, Racecourse, and Lalbagh. According to the feasibility report, travel time will reduce from 90 minutes to 20 minutes. However, the toll fee of Rs 288 for the route has sparked concerns over affordability.
Experts argue that the construction of the tunnels could lead to a range of problems, from environmental degradation to major traffic congestion.