Why does Bengaluru need a new Special Purpose Vehicle for its suburban rail project?

In 2014, the state government registered the BSRCL as a Special Purpose Vehicle (SPV) for the Suburban Railways project. Now the CM has announced another SPV, to be set up within a month to help speed up the project. What's really happening?

It has been a week of contrasts for transit in Bengaluru last week. Even as the debate about the proposed elevator corridor heated up, Chief Minister H D Kumaraswamy announced that a Special Purpose Vehicle (SPV) for the Suburban Rail project would be set up in a month to help speed up the project under K-RIDE (Railway Infrastructure Development Company Karnataka Limited).

This move was welcomed as a shot in the arm for the project that has been decades in the making – except for one tiny detail. A Special Purpose Vehicle for Suburban Rail already exists for Bengaluru!

In 2014, the State Government registered a company, Bengaluru Suburban Rail Company Limited (BSRCL) as a Special Purpose Vehicle for the Suburban Railways project. It was registered as a company with the Ministry of Corporate Affairs on 12th March 2014 at an authorised capital of Rs 50,00,000.The company falls under the aegis of the Urban Development Department, Government of Karnataka and is entirely owned by the State Government.

Its administrative composition has three officers from the government – P N Sreenivasachary, Principal Secretary, UDD, Manjula Vinjamuri, Commissioner Department for Urban Land Transport (DULT) and S B Honnur, Additional Director, Bengaluru Metropolitan Regional Development Authority. The three officers held these posts in the government at the time of their appointment to the BSRCL. While there are whispers that the company was dissolved by a cabinet decision in June of last year, the company is an active one according to the website of the Ministry of Corporate Affairs.

It is also listed as an active company on private websites that provide information about registered companies in India. An independent SPV that isn’t dependent on the Indian Railways would mean it can determine the fare and routes, and manage the operations. This is important if the suburban rail project has to really take off in a full-fledged way,

The new SPV that is being proposed under K-RIDE, however, has a logistical mountain to climb to meet the month’s deadline. K-RIDE which was imagined as an organisation to implement railway projects with private partnership has implemented one railway project – the Hassan/Mangalore Railway line. It has private players as part of it. This composition goes against the newly formulated Suburban Railway Policy which stipulates that the State Government needs to be the primary shareholder of any Suburban Railway project along with the Central Government. No private players can be part of it.

K-RIDE has a consortium of private players going by the name iDeCK or Infrastructure Development Corporation Karnataka Limited as part of it which came into existence in the year 2000. Their partners also include Infrastructure Development Finance Company (IDFC) and Housing Development Finance Company. As a recent report in The New Indian Express points out, to comply with the new suburban rail policy, both the Central and the State Government have to buy out the private players of iDeCK. No one knows an official figure of what this would cost.

All of it raises legitimate questions on the need for a new SPV. This especially becomes important in the context of time and cost and the importance of the SPV itself. “A Special Purpose Vehicle in a project like this becomes important because we will need the railways to share their assets with us. The suburban railway services will share tracks with interstate rail services as well. The SPV’s job is to ensure that suburban rail services are also prioritised and not bumped off if there is a train coming from Delhi at the time. It is anybody’s guess as to why a new SPV is being planned or what its composition will be like. If the argument is that BSRCL will need to revamped to comply with the new policy, it is being done with K RIDE as well,” says Satya Sankaran of Praja, that has been pushing for suburban rail services.

Sanjeev Dyamannavar of Praja also was at loss to understand the rationale behind a new SPV. “If time is of essence, then the idea should be to save it and revamp what already exists. My understanding was that the cabinet passed a resolution to dissolve the BSRCL. But if it is an active company then why not use it?”

DULT was the identified nodal agency for BSRCL. Despite multiple attempts, Darpan Jain, Commissioner, DULT and Veena N, Joint Commissioner DULT, could not be reached for comments.

Timeline of the Suburban railway project  

  • 1963: The first Suburban Railways project was started for HAL employees to travel between the city and Vimanapura Station.
  • 1983: The First feasibility report recommending a suburban railway service for Bengaluru was presented. Subsequently eight reports (till 2017) have been tabled on the feasibility of suburban railway services for Bengaluru city. Four of these reports were prepared by the Railway India Technical and Economical Service. – 1989 (Suburban Railway), 2011(Comprehensive traffic and transportation plan), 2012 (Implementation of Suburban Rail Services) and 2015 (Suburban Rail System for Bengaluru.)
  • 2007: The first plan for a modern suburban railways services is put in place.
  • 2013: Chief Minister Siddaramaiah announces a SPV for suburban Railways in the 2013-2014 budget. The estimated cost of the Suburban Railway services was Rs 8758 crores.
  • 2014: BSRCL is registered and comes into existence.
  • 2015: RITES submits DPR for implementation of Suburban Railways.linking the city with Hosur, Chikkaballapur, Bangarpet and Tumkur. The Project proposed a 440km coverage by the Suburban rail network
  • 2017: The State and the Central government begin talks after a citizens movement Chukubuku Beku pushes the idea forward.
  • 2018: Chief Minister announces SPV to be set up within a month.


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