Days before demitting the office in Karnataka, the H D Kumaraswamy government has filed a petition before the Supreme Court seeking its permission to throw the Nandi Infrastructure Corridor Enterprises Ltd (NICE) out of the multi-crore controversial Bangalore-Mysore Infrastructure Corridor Project (BMICP) claiming its contractual rights and allegations of financial irregularities by the contractor.

Filing a fresh application ahead of its hearing on October 5, Karnataka said, “The State is reposing its faith in the wisdom of the court to allow it to exercise its contractual rights so that further implementation of the project is done through alternate means for its completion within the stipulated period as directed by the court.”
Quoting some news reports, the petition said that besides indulging in corrupt practices to grab land worth Rs 30,000 crore, NICE managing director Ashok Kheny had allegedly abused former prime minister H D Devegowda, his son and Chief Minister H D Kumaraswamy using derogatory words such as “Ravana” and “Bakasura”.
The petition has sought the direction of the court to implement the project through public sector or by awarding the contract to a consortium — Asian Infrastructure Consortium led by Malaysia-based Mono Rail Company.
“The implementation of such infrastructure projects today can be extremely viable and can be a source of revenue for the government and the money earned could be spent on developmental projects,” said the petition filed by the State’s counsel, Sanjay Hegde.

Global tender process

Karnataka justified the new global tender process floated on September 17, 2007 and said NICE was not interested in implementing the project as conceived originally. Despite the direction of the apex court, the execution was lagging behind by years due to the fault of the contractor.

By fabricating and suppressing government records, NICE had resorted to corrupt practices to usurp land worth Rs 30,000 crore in the townships to be developed on the outskirts of the city.  The State alleged that NICE had obtained by fraudulent means right to develop and sell additional 2,289 acres of land, and had reduced the quantum of land to be reverted back to the government after the end of concession period from 14,255 acres to 11,966 acres. The government said it would follow the Swiss challenge approach by which it would pay the cost of the executed work to the NICE.

The execution of the project has been embroiled in litigation for the past 11 years due to alleged involvement of politicians, officials and the project developers in corrupt practices. Squarely blaming some of its officials for being hand-in-glove with the NICE, the earlier petition said, “All along, the project company has been in conscious knowledge of its own wrongs and manipulations which it has carried out in collusion with the State government officers.”

According to the frame work agreement (FWA) signed on April 5, 1997 between the Karnataka government and the developers, the NICE had the right to saleable land of 5937.3 acres in five townships which was worth Rs 31,250 crore at the lower spectrum of the present value, whereas the cost to construct the expressway, peripheral road and link road would be a maximum Rs 3000 crore. The company had been also given the right to collect toll tax for 30 years, which would run into thousands of crores of rupees, said the application filed earlier by Karnataka.

The Karnataka High Court in its judgment delivered on September 21, 1998 in the Somashekhar Reddy case had held that the company was entitled to sell only 45 per cent of the available land in the five townships and the roads would be handed over to the government after the lapse of the lease period. The Supreme Court in its judgment on April 20, 2006 had upheld the High Court order and directed the parties to stick to the clauses of the original agreement.