Namma Metro gets Rs.2000 Cr funding from HUDCO

hindlogo2Bangalore:  The Rs.2000 crore funding by the Housing and Urban Development Corporation (HUDCO) for the second phase of Bangalore Metro rail has come close to reality.

HUDCO Chairman V P Baligar, who met Chief Minister Siddaramaiah at Krishna (CM’s home office) on Saturday, told RailNews that the Centre would soon approve the proposal. “An amount of Rs.1200 crore has already been approved. The fresh proposal of Rs.2000 crore will be approved soon,” he said.

The Rs.27000 crore project will have 72-km Metro rail network. To mobilize funds, the state government proposes to part fund the second phase by levying a fresh cess on residents and business establishments in the vicinity of the upcoming rail network. As the project is expected to benefit a large number of property owners who will gain from appreciation of land and increase in rentals, it is proposed to introduce enactments to capture a share of the associated value creation and channel them into infrastructure finance.

A cess to be levied at 5% of the market value of land and building in future developments, new layouts to be credited to Metro Infrastructure Fund. This will be shared among BMRCL,BWSSB and BDA equitably. The expectation is that such a cess would yield about Rs.1250 crore over five years with Rs.250 crore coming from residential properties and the rest from commercial establishments.

Further, there is also a proposal to levy cess on additional floor area ratio (FAR) on all properties lying within a distance of 500 metres from the Metro alignment at a rate of 10% on residential properties and 20% on commercial buildings. This cess will be applicable not only for the upcoming second phase of Metro but also for the ongoing phase 1. This is expected to yield Rs.432 crore to the government over a period of five years.

Rent-to-own housing scheme

Besides the second phase of Metro rail, the CM evinced interest in HUDCO funding three lakh housing scheme for the police. Siddaramaiah was briefed about “rent-to-own” housing scheme started by the HUDCO. The scheme envisages to facilitating various public institutions by taking loan from HUDCO on behalf of its employees. “This scheme was proposed and is ideal for police constables. Here the police housing corporation can build or buy plots or houses in bulk and give them on rent-cum-ownership basis to the constables,” Baligar said.

The house rent allowance (HRA) along with certain additional amount, as consented by the employee, will be deducted from the salary that would be used by the agency to repay the equated monthly instalment (EMI) requirement to HUDCO. “The EMI could be telescopic which is agreed between the employee and the public agency. The ownership of the residential unit initially allotted on rent is transferred by the public agency to the employee after the entire loan is paid or at the time of retirement.