Topics: Investing, Business, News, Business News
**Lavika** (0:04)
In today's episode, we'll break down two important stories. First, why is Bengaluru's metro takes forever?
Then, India's power grid sees a high wire balancing act.
Welcome to The Daily Brief by Zeerodha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets.
I'm your host, Lavika. Today is Tuesday, 13th August. First story for the day is, Bengaluru's metro has been built in phases. Phase 1 is fully operational, while much of Phase 2 is also running, with a few stretches still under construction. Phase 3, meanwhile, has been approved, but construction is yet to begin. And this story comes at a time when this weekend, on August 15th, a section of Phase 2's pink line is expected to open. One of the unfinished parts of Phase 2 was connecting Gotegere in the south with Nagavara in the north. Its project report was submitted in 2011 But tree clearances were sought only in 2017, utility shifting payments came in 2018, and underground tenders were called in 2019
And amid all these delays, one problem was remarkably basic. Bangalore Metro Rail Corporation Limited did not have the land ready for the tunnel boring machine because the required clearances had not come through. That meant the contractor could not build the tunnel with the way it had originally planned. BMRCL had to change the tunnelling sequence and create temporary shafts and piling works to keep construction moving. Those changes cost money. The contractor was eventually paid an additional 33.56 crore rupees for the delays and extra work. And this was happening on a project that was already running far behind schedule. Phase 2 was originally supposed to be completed by December 2019, nearly 7 years later, parts of it are still under construction. This is just one corridor on one line. But a 185-page CAG performance audit released earlier this year, covering phases 1 and 2 of the Bangaluru Metro, finds the same pattern across the project. Phase 1 was completed about 5 years late. Its cost moved from the approved 8,158 crore rupees to 14,133 crore rupees. The interesting question isn't why unexpected things went wrong underground. It is why so many expected things, land, trees, utility, drawings, were still unresolved when construction began. There are different things hiding inside the phrase, the metro is late. Some delays are simply hard to avoid. BMRCL says tunnelling through hard rocks cost phase 1 about 30 months. A tunnel boring machine broke down, adding another 7 months.
Codes intervene too. You can plan carefully and still run into problems like these. But the CAG audit points to a different kind of delay, one that starts before the contractor even gets to work. Think about what needs to be ready before you start building a metro. You need the land, you need the final drawings, you need water pipelines, sewage lines, and other utilities moved out of the way. And you need the necessary clearances.
Ideally, all of these things come together before the contractor arrives with people and machines.
That didn't always happen in Bangalore. The audit repeatedly found that contracts were tendered and awarded while some of these basic pieces were still unresolved. This wasn't entirely accidental. BMRCL told the auditor that it allows land acquisition and construction to happen in parallel. And you can see why.
Waiting to acquire every last piece of land before tendering the project could itself cost years, while land prices keep rising. So instead, BMRCL starts construction and tries to get everything else ready alongside it. That's a gamble. It works if the land, drawings, and clearances arrive before the contractor needs them. In Bengaluru, they often didn't. The problem started even before BMRCL acquired the land. The project report said how much land would be needed along different stretches of the route, but did not identify the actual plots or who owned them. For phase two, there were no fixed timelines doing their homework either, identifying owners, preparing land plans, and getting approvals, even though the government of India had specifically said land acquisition should not delay the project. And once construction started, these problems began crashing into each other. You couldn't shift a water line if the land wasn't available. You couldn't remove a tree if the clearance hadn't arrived, and engineers sometimes couldn't finish the drawings because the alignment and site itself was still being worked out. So there wasn't one neat reason for the delays. In the contracts the CAG sampled, utility shifting held up 13 projects, and tree removal delayed 10 But you can't simply say land caused X months of delays, and utilities another Y.
These problems were happening at the same time and feeding into each other. The contractor might have been ready to build, but the place where it was supposed to be built often wasn't. Delay doesn't merely postpone an opening date. It actively makes the project more expensive through several channels at once. The simplest illustration is Phase 2 land. The report projected a cost of ₹1,826 crore. The Karnataka government's update raised it to ₹2,003 crore. A revised approval in 2017 took it to ₹6,293 crore. By March 2023, the actual figure was ₹7,455 crore.
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