CAG audit flags Bengaluru Metro's cost overruns, low ridership, land delays

The Comptroller and Auditor General of India (CAG) has highlighted significant shortcomings in the planning, execution, and operations of Bengaluru Metro's Phase 1 and 2, citing issues such as cost overruns, low ridership, and land acquisition delays. The performance audit, tabled in Parliament on August 10, examined the Bangalore Metro Rail Corporation Limited's (BMRCL) work from inception to March 2021, with contract progress reviewed up to March 2023.

The audit found that Phase 1, spanning 42.3 km, achieved peak-hour ridership between 6,429 and 8,852 passengers in 2021, far below the projected levels of over 15,000. According to the report, BMRCL did not conduct studies to understand the reasons for low ridership or to explore ways to improve it, despite the significant investment in a heavy metro system. The audit also questioned the ridership assumptions used for calculating financial and economic returns for both phases.

Feeder services were identified as poorly organised, failing to connect metro stations with interior residential areas. The report noted that BMTC bus ridership declined from 51.3 lakh passengers per day in 2014-15 to 27.49 lakh in 2022-23. Even combined BMTC and metro ridership remained lower than BMTC's earlier figures alone, suggesting the metro did not successfully attract private vehicle users to boost overall public transport use in Bengaluru.

Land acquisition emerged as another major concern. The CAG stated that land requirements were not properly assessed in Detailed Project Reports. For Phase 1, BMRCL acquired 62.67 hectares against a projected need of 45.24 hectares, while for Phase 2 it acquired 145.16 hectares against a projection of 165.09 hectares. Improper assessment and delays increased land acquisition costs by ₹6,603.39 crore as of March 2023, the audit estimated.

Excess compensation payments were also flagged. Adoption of inappropriate land rates led to excess compensation of ₹294.72 crore, while delays in issuing final acquisition notifications resulted in an additional ₹186.86 crore in interest. Another ₹31.35 crore was paid in excess compensation in Phase 2 due to higher percentages for certain property attributes.

BMRCL lacked a procurement manual and uniform guidelines for cost estimates, project duration, package sizes, tender document periods, and contractor advances. Taxes included in estimates for nine civil contracts increased project costs by ₹1,222.4 crore. Delays in land handover across 13 contracts ranged from 12 to 1,305 days, exceeding the permissible 90 days.

The audit also highlighted BMRCL's financial dependence on the Karnataka government. The corporation recorded continuous cash losses from 2013-14 to 2021-22, raising concerns about its long-term viability and ability to sustain operations without state support.

Phase 2, which began operations in stages between January 2021 and March 2023 over 27.36 km, is planned for full completion by December 2026. The CAG noted that Phase 2 was planned without a Comprehensive Mobility Plan, Transit Oriented Development, or Land Use Policy, which are considered essential for integrated urban transport planning. Phase 2A and 2B were excluded from the audit.