The consortium has already identified 90 acres of land for the 25 km long first phase of the project, which was estimated to cost Rs 2,400 crore. However, with the state government planning to chip in with 25 per cent of the equity, the proposal is being restructured to incorporate several cost-cutting measures.

The land identified conforms with the strict guidelines set by the Karnataka government forbidding the consortium from acquiring privately held land. The consortium is also planning to inductanother partner with expertise in construction activity with the approval of the state government, sources said.

The consortium partners along with the nodal agency the Bangalore Mass Rapid Transit Ltd (BMRT) and Bechtel are currently debating the feasibility of track work to be used for the project and whether ELRTS should settle for the balastic track work which is traditional to Indian Railways or the direct-fixation track work which may be new and more affordable. Other issues of concern are the setting up of concrete bridges instead of the proposed steel bridges, the latter requiring high maintanence. The idea of international bids for acquiring trains for the system has also been mooted which will bring down the cost. Public sector Bharat Earth Movers Ltd has recently announced its decision to bid for the trains jointly with Alstom of France.

The state government has already agreed to allow the promoters to fix the fare structure of the transit system. A concessionaire of 20 years has been given bythe government till the system becomes viable and the debts are cleared.

Meanwhile, the Indian Railways have added another dimension to long delayed projects. The Railways now claim that all rail projects should come under its purview and that it should decide the technology, gauge and tariff structure of the ELRTS for Bangalore. The Karnataka government however claims that the rail systems within cities are categorised as trams and therefore come under the purview of the city corporation. There is no premise for litigation in this project since the law is in favour of the state government, sources added.

The Rs 4,800 crore mass transport system which was planned in two stages by the Infrastructure Leasing & Financial Services Ltd (IL&FS) is being set up by a consortium of UB Transit Systems, ICF Kaiser Engineers Inc, Transportation & Transit Associates Inc of the US and Nippon Sharyo Ltd of Japan and being monitored by BMRTS.