Bengaluru’s ₹17,780-crore tunnel road: ₹800 crore set aside for land compensation

Karnataka government clears decks for Bengaluru’s largest underground mobility project — a twin-tube North–South tunnel funded through PPP and HUDCO loan, with major land payouts planned.

Bengaluru is gearing up for its biggest underground road mobility project yet, a ₹17,780-crore twin-tube tunnel connecting the city’s North-South corridor. The project, tabled in the Karnataka Legislative Council, will see a significant financial outlay for land acquisition and infrastructure development.

Deputy Chief Minister D.K. Shivakumar announced that around 80% of the land required for the project is government-owned. However, a crucial portion passes through private property owned by St. John’s Hospital. Of the five proposed interchanges, four are on government land, while one falls under private ownership.

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To secure the remaining land, the state will rely on the Transfer of Development Rights (TDR) mechanism. For owners unwilling to accept TDR, the government will provide direct compensation amounting to around ₹800 crore. Survey and site preparation work are already in progress.

According to the Detailed Project Report (DPR), the North–South Tunnel Road will cost ₹17,780 crore in total. Each kilometre of the twin-tube tunnel is estimated at ₹1,062 crore (₹531 crore for a single tube, inclusive of GST). The Public-Private Partnership (PPP) model will drive the project, with 60% of investment coming from private players and 40% from the state government.

The government’s contribution of ₹9,303.66 crore will be funded through a HUDCO loan at an interest rate of 8.95%, for which in-principle approval has already been granted. DPR preparation was handled by Rodic Consultants Pvt. Ltd., New Delhi, at a cost of ₹9.45 crore for the North–South corridor and ₹9.89 crore for the East–West corridor.

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The project will also include extensive planning for tree transplantation, debris disposal, and traffic management to minimise urban disruption. Expression of Interest (EoI) for private participation was held on August 4, 2025, with bidding and environmental assessments underway.

Key Highlights:

•    Total project cost: ₹17,780 crore
•    Corridor: North–South twin-tube tunnel
•    Cost per km: ₹1,062 crore (twin tube)
•    Funding model: PPP (60% private, 40% government)
•    Government contribution: ₹9,303.66 crore (via HUDCO loan at 8.95%)
•    Land compensation: ₹800 crore
•    Land ownership: 80% government, 20% private (mainly St. John’s Hospital stretch)