It's not a separate building. Just using the empty space in the concourse area. Also, the first floor is rarely used by travelers, actually a good place to setup the museum as people can just visit it while waiting for their trains.
The connecting line is now a distant dream as there is not enough space around SBC ( without demolitions) to construct this.
Also, given the extreme (really extreme!) amount of traffic around Majestic, it'll be disastrous if BMTC buses start...
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stopping in the railway station. More so because BMTC buses always hang around the stops until the bus is filled. Even in KBS many times, buses take more than 45 min to start even after half the bus is full. But then KBS is as close as possible to the station and also the underpass connection is good, so probably no need of running buses right upto the entrance to just to save a 100m walk. Also, with all the traffic at KBS entrance, it'll take less time to walk to SBC from the bus stand, than wait for the bus to reach there. :P

Being a frequent traveller, I would advise Rlys the following:
1. Shift the hotel to the 'open space' in the concourse area (which is meant for museum), with ground floor as parking and first floor as hotel.
2. Demolish hotel and car park area on the 2nd entrance and link PF 8-10 to PF 1-7.
About extreme traffic around Majestic area: Please walk with...
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your family members and the luggages from BMTC bus station to railway station side through the sub-way, to understand the situation. Though rly stn and bus stn are opposite, it takes minimum 20 minutes to go from end to end wading thru the ocean of public. As you know, lakhs of people come to KBS to catch trains and if BMTC buses directly drop them at Rly stn, majestic area will become half empty. People with luggage prefer autos just to avoid the walking.
Also, SBC is as much crowded as Chennai Central. In MAS, you have buses right inside the rly stn compound. In Mumbai CSTM and NDLS, you have bus stand within rly stn premises. Even in HYB, you have such a facility. Why SBC should be an exception? Is it just because Bengalurians like to walk on sub-way and get on to the overbridge to get a bus? I do not find any logic.
I am not asking plenty of buses from SBC stn area -- Just 6 -7 routes -- One towards Yeswantpur b/s, one to Yelahanka b/s, one to BTM Layout via Jayanagar b/s , one to Ramakrishna Ashram/ Gandhi Bazar, One to Koramangala St. Johns, one to Kengeri b/s and one to Banashankari B/s. Half the crowd will vanish from KBS area.!