Bengaluru: Karnataka will develop a new city at Kolar Gold Fields (KGF) around 100 km from Bengaluru to decongest its capital, state urban development minister Roshan Baig said.

This will be done by converting around 12,000 acres land held by the defunct Bharat Gold Mines Ltd (BGML).

The proposal is part of the state government’s attempts to develop satellite towns and cities around Bengaluru. The city has a population of 10 million and almost 55 million vehicles now.

“We have land at our disposal and we have initiated the project to help new cities emerge and decongest Bengaluru. We can relocate almost two million people there," Baig said.

Global tenders for the project will be floated shortly, he said.

Baig said neighbouring Andhra Pradesh had to request farmers to part with their land to build its new capital Amravati. Baig said the state government has initiated the process to acquire possession of the land from Government of India.

KGF was the hub of gold production in the country since late 1800s but the glory of this illustrious town started diminishing in the 1980s with falling deposits and increasing costs.

BGML became a public sector undertaking under the Department of Mines in 1972 primarily for the production of gold. However, in 1992, the company was referred to Board for Industrial & Financial Reconstruction (BIFR) in 1992 when its net worth became negative, according to the department of mines data. The board decided to wind up the company in 2000 and shut it down the following year.

Baig said the golf course and bungalows in the property will be retained.

Baig said a special purpose vehicle would launched to bring in private investors to develop the proposed city and that the state government was now trying to prepare a detailed project report to determine costs and logistics. Kolar has been one of the regions worst hit by the drought in the state and water has become a huge challenge for people living there. Baig said desalinated water from Mangalore would be brought to KGF with the Yettinhole project.

Baig said the government has also sought 400 crore from Asian Development Bank (ADB) for developing Devanahalli as a satellite town. As per initial estimates, the cost of developing the satellite town would be in excess of ,800 crore, he said. Other such clusters include Doddaballapur, Harohalli, Chikkaballapura, Dobbespet and Bidadi among others, he said.