HUDCO Sanctions ₹9,303 Crore Loan to B-SMILE for Tunnel Road Project

Quick Summary

• HUDCO Loan Approval: Housing and Urban Development Corporation (HUDCO) sanctioned a ₹9,303.66 crore loan for the Twin Tunnel Road’s North-South corridor (16.8 km), managed by B-SMILE SPV.
• Loan Details:

– Interest rate: 8.95% (first year).
– Tenure: 24 years and 2 months, including a draw period of over four years and repayment phase of twenty years.

• Project Financing shift: Unlike earlier BOOT model financing, B-SMILE will bear 47.67% project cost (~₹8,476.47 crore) instead of the concessionaire assuming majority duty.
• Cost Breakdown: Total estimated cost is ₹17,780.13 crore.
• Accountability Measures:

– Allocation from premium FAR proceeds and advertisement revenues via escrow account under HUDCO’s first charge.
– GBA commits to compensating any revenue shortfall against loan liabilities using option sources.

• Operational Rules:

– Loan funds cannot be diverted elsewhere; quarterly progress reports required; site inspections precede fund release installments.

Indian Opinion Analysis

The approval of HUDCO’s significant loan allows bengaluru’s much-awaited North-South Twin Tunnel Corridor progress to advance on more solid financial footing with safeguards for repayment via innovative funding streams such as FAR premiums and advertising revenues channeled thru an escrow mechanism. Transitioning away from an originally planned BOOT financial structure to one now evenly divided between SPV responsibility and government guarantees introduces potential oversight challenges but alleviates risks for private investors.

with strong accountability measures-including quarterly reporting requirements and tightened fiscal safeguards-this development seems poised to ensure smoother execution despite its complex framework involving state commitments, municipal bylaws-driven revenues, and multi-stakeholder cooperation across public-private partnerships amidst international interest among bidding firms .Linking indirect benefits