An expressway blocked

The Supreme Court order staying the controversial Bangalore-Mysore Infrastructure Corridor project prevents the cracks in the Congress-led ruling coalition in Karnataka over the project from widening.

PARVATHI MENON in Bangalore

THE N. Dharam Singh-headed coalition government in Karnataka won a major reprieve on May 13 with the Supreme Court ordering a stay on the May 3 Karnataka High Court judgment unequivocally endorsing the controversial Bangalore-Mysore Infrastructure Corridor (BMIC), a project that envisages a 111-kilometre six-lane expressway between the two cities. Work on the BMIC will now remain suspended pending final disposal of a Special Leave Petition filed in the Supreme Court.

The stay is a major setback for the project's promoters, Nandi Infrastructure Corridor Enterprises (NICE), who had just 10 days earlier celebrated the High Court Division Bench's order asking it to complete the project "expeditiously". The verdict of the Bench comprising Chief Justice N.K. Sodhi and Justice B. Padmaraj had threatened to reopen the political and factional cracks in the ruling coalition - between the Congress and the Janata Dal (Secular) on the one hand, and between the pro- and anti-BMIC factions within the Congress, on the other.

What surprised observers was not the High Court's indictment of the government as much as the stringent punishment it imposed on Chief Secretary K.K. Misra and Under Secretary of the Commerce and Industries Department M. Shivalinga Swamy. It ordered criminal prosecution against them for "knowingly withholding important facts and documents from the court and making false statements in the affidavits filed in this court". While dismissing the petition of J.C. Madhuswamy and G.V. Srirama Reddy, which argued that financial and procedural irregularities dogged the project and which sought a Central Bureau of Investigation (CBI) inquiry, the High Court ordered them to pay Rs.50,000 in legal costs to the Karnataka State Legal Services Authority.

The BMIC also envisages 41 km of peripheral roads and 9.8 km of link roads (connecting the highway to Bangalore city centre). Five townships will be constructed along the highway. The 1995 memorandum of understanding (MoU) arrived at between the State government and a consortium comprising the United States-based Vanasse Hangen Brustlin Inc and the Kalyani Group of Companies stipulates a 10-year construction period and a 30-year toll period after which it reverts to the government. Compensation norms included a fair market price for land acquired plus a job per oustee family, alternative housing and even a land-for-land option. NICE appeared as a signatory only in the formal agreement with the government in April 1997. The project achieved financial closure for Phase 1 only in March 2003.

The BMIC project has been mired in controversy ever since the signing of the framework agreement between NICE and the Congress government in 1997. Over the years, more voices have joined the opposition to the project and for a growing range of reasons. Politicians from across the political spectrum, oustees who have lost their lands, ecologists who argue that the project will upset the ecological health of the areas it passes through, non-governmental organisations (NGOs) of various hues and social activists are part of the campaign against it. The criticisms and allegations kept snowballing and by early 2004, as the five-year term of the previous Congress government under S.M. Krishna was drawing to a close, there were three or four major issues on which the anti-BMIC campaign rested.

The first was that NICE had acquired land far in excess of what was originally sanctioned by the government. The project, according to its critics, became a real estate windfall for the company and a source of profiteering for several senior politicians, ex-Ministers and bureaucrats who were involved at various stages in the process of land acquisition. The second category of allegations related to the misrepresentation of its legal status by NICE to the government at an early stage of the project being sanctioned. The third category of allegations was broadly linked to the first charge - that the company acquired excess land at very low rates, which it then used for commercial purposes.

Many of these issues found expression in the writ petition filed by Madhuswamy and Srirama Reddy, Members of the Legislative Assembly (MLAs) belonging to the Janata Dal (United) and the Communist Party of India (Marxist) respectively in June 2004. This was not the first anti-BMIC petition before the court. There have been several public interest suits against the project before the High Court, but this was the most comprehensively documented and argued one of them all.

While the fight against the BMIC project was taken to the courts, the political environment in the State underwent a major change. The Assembly elections of May 2004 produced a fractured verdict with the Bharatiya Janata Party (BJP) emerging as the single largest party. The Congress and the Janata Dal(S) decided to sink their differences and form a coalition to keep the BJP out of power. There were several issues of disagreement between the erstwhile political foes. On top of the list was the BMIC project.

Former Prime Minister H.D. Deve Gowda, now Member of Parliament and national president of the Janata Dal(S), in whose tenure as Chief Minister the MoU was signed, had turned an ardent critic of the project. He raised objections to the project in a letter to Chief Minister S.M. Krishna in early 2004. He then wrote letters to Governor T.N. Chaturvedi, saying that against an extent of 20,193 acres (8,068.2 hectares) approved by the Cabinet, the Karnataka Industrial Area Development Board (KIADB) had notified 29,140 acres (10,756 hectares), an excess of 8,953 acres (2,691.6 hectares). He objected to the caretaker government issuing gazette notifications on the project that "involved lands worth crores of rupees". This was a violation of the code of conduct, he argued.

THE case for reassessing the project was greatly strengthened by the Governor's letter to the government in April 2004, presumably as a response to the issues raised in Deve Gowda's letter. He stated that around 30 per cent of the private land acquired was in excess of the actual requirement. For toll roads, the actual acquisition was 37 per cent in excess of what was specified in the project report. Land acquired for interchanges was 158 per cent in excess of the actual requirement.

Once the coalition government took office, Deve Gowda wrote to Dharam Singh, raising fresh charges of corruption in the BMIC project. He also recalled that in his post-election talks with Congress president Sonia Gandhi on Ministry formation in Karnataka, he had made his demand for a CBI probe into the BMIC a "condition" to his party's participation in the new government.

Resisting pressures from a pro-BMIC lobby in the Congress, Dharam Singh constituted an expert committee headed by K.C. Reddy, a senior bureaucrat, which submitted its report in October 2004. Based on the recommendations of the committee report, the Cabinet took the decision that it would not stop the project, but that 2,430 acres (972 hectares) of excess land acquired for the project would revert to the original landholders.

The High Court judgment has basically looked at two issues raised by the petitioners. The first is whether the company indulged in "fraud and misrepresentation" as alleged in the affidavit submitted by the Chief Secretary to the court, which led the government to believe that NICE was a unified consortium and not a separate company. The second was that excess land for the project was actually acquired and handed over to NICE by the government. The judgment is unequivocal in its rejection of both these claims, although its argument, in respect of the second issue in particular, does not appear to have taken note of all the official documentation that establishes that excess land was actually acquired.

Political interests were at play in stalling the progress of the project, the judgment suggests. It states: "The stand of the State government changed when the new Minister for Public Works sent a note on 6.7.2004 to the Principal Secretary, PWD. In that note he pointed out that H.D. Deve Gowda, a former Prime Minister, has some time back made serious allegations that the project to be constructed by Nandi had been allowed to be converted into a real estate business instead of providing infrastructural facilities." It goes on to state: "It is from this stage that the process of stalling the project had been initiated... all this happened soon after the change of the government in the end of May 2004, and the project was likely to be shelved because of political/extraneous considerations."

In reality, by 2004 the opposition to the project was coming from several channels. The issue of the sanction of excess land by the government to NICE, parts of which were being sold by the company to private parties, forms the core of the main allegations against the company at this time. In fact, R.V. Deshpande, Minister for Large and Medium Industries in the previous government, in more than one official noting, had expressed alarm over the matter of excess land being acquired by the government for NICE. In a noting in 2003, he wrote: "I have gone through the letter of NICE. The contents of the letter are out of imagination and there is no necessity that they get a rude shock. I am told that as per the agreement with Government of Karnataka, we were required to acquire 20,000 acres [8,000 ha] of land for the project, including 5,000 acres [2,000 ha] of government land. But, now we have acquired more than 26,000 acres [12,400 ha] of land. How could we do this? What NICE has to say about it?"

The BMIC controversy is just one of several land scams in and around Bangalore that have come to light through a combination of political and legal action. A recent High Court judgment has stopped all site allocations by the Bangalore Development Authority (BDA) in the Arkavathy Layout. The Janata Dal(S) has made the issue of land-grabbing in and around the city the centre of a political campaign. How seriously the government addresses these alleged scams will be determined by the outcome of the Supreme Court's final ruling in the BMIC case.