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Nandi infrastructure corridor (The BMIC project)

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If you are a resident of Bangalore, there are some keywords that you keep hearing often:

1. Devanhalli International airport

2. Bangalore-Mysore infrastructure corridor (BMIC) or the Nandi infrastructure corridor

Both of above massive projects have been plagued by deep rooted bureaucracy in the past so many years that it has taken 2 steps forward and 3 steps backward!

It appears the Devanhalli International airport is half-way close to completion before it is readied for International flights from sometime in 2008.

The Nandi corridor is yet to see the light at the end of the tunnel and work on it goes at a snail’s pace.

We took a drive in my Honda City yesterday on both directions off Kanakapura road on this beautiful BMIC stretch in the night and it was an exhilerating experience. The roads are 4-lane (convertible to 6-lane) highways and there are loops to cut off the main highway. There were toll booths being setup though the toll has not been enforced as yet since the road itself is still under construction – land acquisition has always been a major hurdle with everyone wanting to have a piece of the cake as is common in India!

I had undertaken a sample project finance appraisal case study on this very BMIC project and following were the details I had gathered way back in 2006 for my Project Appraisal and Finance topic in my MIB course at IIFT.

Figures could’ve changed as costs go up due to all the delays in execution of the project so ensure you consult the latest updates/appropriate authorities. I have put the analysis here to indicate a broad-based description of how Financing was achieved for this project.

Bangalore-Mysore expressway 
 
Estimated cost of the project Rs 2200 crore

Financing by ICICI and 10 other leading banks Rs. 1900 crores or whereabouts
NICE (Nandi Infrastructure Corridor Enterprises) Rs. 300 crores
NICE is a new company promoted by Bharat Forge/ Kalyani Group of Pune  
to implement the corridor project on a 30-year BOOT basis. ) 
Debt-equity ratio of 1:1.6 (one of the lowest for an infrastructure project) 
Estimated year of completion 2005/2006
 
The BMIC project is said to be the most scrutinised one in Karnataka, and perhaps even in India. This is the only infrastructure project involving a gestation period of nearly 10 years to get all required orders and has seen: 
* 7 Prime Ministers 
* 4 Chief Ministers 
* 15 Ministers of PWD
* 8 Chief Secretaries
* 8 Secretaries for Public Works Department
* 6 Secretaries for Urban Development Department
* 10 Secretaries of Infrastructure Department 
* Over 350 IAS officers, over 100 cabinet meetings and nearly 10,500 signatures from government officials at various levels

CNN-IBN’s press report on the BMIC just prior to the BMIC inauguration

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Written by Naveen Athresh

February 4, 2007 at 11:17 am

One Response

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  1. Der Sir,

    1 We in India are do not support good infrastructure projects. Bangalore is badly in need of good quality well planned roads. Govt is neither equipped nor funded to provide such facillity. However govt should facillitate private players for execution of such projects.
    2 However in this case Mr Deve Gowda has purchased land in close viccinity of BMIC project after project was planned. As per terms and conditions of project land around project can be developed by BMIC only and it is logical. The claim of politicians that farmers have been cheated is false and smells of vested interest. The cost of land in market got elevated after planning of BMIC and not otherwise.
    3 It is in the interest of bangaloreans that the project is completed at the earliest and local people should support it.
    4 Thanks and I would like to contribute TOWARDS THE CAUSE REGULARLY

    yadav from delhi

    March 6, 2009 at 1:36 pm


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