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BMIC’s progress delayed by land acquisition issues, state politics

BMIC’s progress delayed by land acquisition issues, state politics
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First Published: Wed, Mar 10 2010. 12 02 AM IST

Updated: Wed, Mar 10 2010. 12 02 AM IST
Bangalore: Fifteen years after the project was cleared, the proposed expressway between Karnataka’s two key cities—Bangalore and Mysore—remains entangled in land acquisition delays. The project’s more serious struggle is political.
H.D. Deve Gowda, a leader of the Janata Dal (Secular), or JD(S), is to begin a two-day protest in front of Parliament on Wednesday against a project he had approved as Karnataka chief minister in 1995.
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After Gowda became prime minister a year later, a state government led by his party agreed to hand over 20,193 acres for the Rs12,000 crore project.
The massive land acquisition that was required—the corridor runs through more than 170 villages—soon triggered some 400 legal petitions against the project.
The delays that have plagued the Bangalore-Mysore infrastructure corridor (BMIC) are emblematic of the problems faced by infrastructure and industrial projects in the country, notably over land acquisition and compensation paid to landowners. More than two-thirds of infrastructure projects taken up in India are delayed by problems related to land acquisition, according to a recent report.
Gowda said the nature of BMIC, involving the construction of the expressway and the development of five townships, has changed.
“The project has become more of a real estate project than an infrastructure one... Fertile lands of farmers are being forcibly acquired at below-market rates,” he had said in an interaction with the media on 6 March.
Gowda alleged the present Karnataka government, led by chief minister Y.S. Yeddyurappa of the Bharatiya Janata Party (BJP), is acquiring more land than is necessary for the project.
The JD(S) government itself had been accused of allotting more land than necessary for BMIC when it had signed the project framework. Gowda later had made the same charge against a Congress-led state government in 2003, led by then chief minister S.M. Krishna (now Union minister for external affairs). Krishna, in turn, had called for the project to be scrapped a year later when a Congress-JD(S) coalition took the reins of the state.
The charges and counter-charges have meant that 15 years later, only 66km of the total 166km—including the 111km expressway between Bangalore and Mysore—has been developed. The expressway promises to cut travel time between the two cities by about half.
Nandi Infrastructure Corridor Enterprises Ltd (NICE), the project developer, said it has got just about 7,000 acres of the required land. “We can’t build the remaining part of the project till we get the balance 14,000 acres,” Ashok Kheny, managing director of NICE, had said on 6 March on the sidelines of a press conference.
Kheny hoped the government will begin handing over the remaining land this year so NICE can complete the expressway in the next five years. That would still add up to a 10-year delay.
Meanwhile, land prices around Bangalore and Mysore have been accelerating hard. Farmers were paid about Rs7.5 lakh per acre for land around Mysore at the beginning of the decade, said a senior NICE official.
Current land costs on the Mysore end of the project hover at Rs50-70 lakh per acre, said a property consultant.
About 70% of Indian urban infrastructure projects are delayed due to land acquisition problems, said the India Infrastructure Report 2009 by Infrastructure Development Finance Co. Ltd (IDFC).
According to the study, 60 projects being implemented by the Indian Railways, 40 by the National Highways Authority of India and 28 power projects are facing difficulties in acquiring land.
“Land acquisition is the single largest concern delaying projects across the board. The Land Acquisition Act, 1894, is dated and compensation is relatively low,” said Ritu Anand, principal adviser and chief economist at IDFC.
The difficulties arise especially when governments try to acquire land from farmers for public purpose such as the construction of infrastructure. “The problem is, public purpose can really be for so many things,” Anand said.
The Supreme Court in November had ordered the state government to transfer the land required for the BMIC project within a year. But the political obstacles remain.
One of Gowda’s charges against the project is that NICE has been raising money for it by mortgaging land obtained from the government.
Kheny refuted Gowda’s charges. He said NICE had spent about Rs2,000 crore on the 66km alone, double the estimated cost, and has to raise another Rs1,500 crore via debt and equity.
Once the road is laid, NICE will begin work on five townships for 100,000 residents each.
The real estate development, Kheny said, will sustain the rest of the project. “The project will be self-funded then.” The project will also earn money through toll collection on the expressway, he added.
The BJP-led state government, meanwhile, said it wants to see the project through. “Land acquisition will soon start and talks with farmers have already begun,” said a senior state governme
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First Published: Wed, Mar 10 2010. 12 02 AM IST