CAG says BMRCL lost Rs 103.77 crore on Nagasandra lease

The Comptroller and Auditor General of India (CAG) has said Bengaluru Metro Rail Corporation Limited (BMRCL) lost potential revenue of Rs 103.77 crore by fixing a lower development premium while leasing 14 acres near Nagasandra station. The CAG's performance audit of Namma Metro's Phase 1 and Phase 2 found that a consultant initially assessed the premium at Rs 320 crore in March 2015, but it was revised down to Rs 240 crore. The land was leased for Rs 251.01 crore, while the CAG calculated a potential value of Rs 354.78 crore.

The audit flagged broader revenue losses across the metro network. BMRCL developed 2.46 lakh sq ft of commercial space at stations, but 2.23 lakh sq ft remained vacant, leading to an estimated Rs 38.53 crore loss in lease revenue from 2019 to 2022. The CAG noted the corporation had no asset management policy and had not deployed value-capture financing to generate income from land value increases created by metro infrastructure.

The report said BMRCL has been incurring cash losses continuously from 2013-14 to 2021-22 and depended on the Karnataka government to service project debt as of March 2023. The CAG recommended that BMRCL ensure timely land acquisition for property development and adopt transparent financing mechanisms. The corporation has floated tenders for retail space at 220 locations across 56 stations, expecting Rs 25 crore in revenue, and has finalised an asset management policy for approval.