Fresh tender floated for PRR, compensation under old rates

People who part with their lands for the 74-km Peripheral Ring Road (PRR) will be compensated under the BDA Act, and not the 2013 land acquisition law, said officials, raising questions on the future of the project.

The decision could result in a prolonged legal tussle, leading to further delays for the project that is meant to decongest Bengaluru's gridlocked roads.

On Saturday, the Bangalore Development Authority (BDA) floated a fresh tender to select the concessionaire for developing the project under the Design, Build, Finance, Operate and Transfer (DBFOT) basis for 50 years. The concessionaire will have to pay the cost of acquiring the required land (about 2,560 acres).

One of the key obstacles to the project is the dispute over how the landowners will be compensated. Landowners, mostly farmers, want compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

But two senior BDA officials cited a Supreme Court ruling from January this year and said 2,560 acres of land across 67 villages will be acquired as per the old compensation rates.

"We will be taking into account the guidance value of the land when the preliminary notification was issued. On top of it, we will be paying a solatium of 32% and interest rate of 12% on the guidance value," a BDA official said.

Going by this compensation structure, the BDA estimates the cost of acquiring around 2,560 acres at Rs 6,500 crore. The construction of the eight-lane PRR is estimated to cost another Rs 6,500 crore.

The company, which wins the tender, gets the right to collect toll in exchange for meeting both the construction and land acquisition costs.

Uncertainty

In all likelihood, farmers may not willingly accept the compensation, going by the series of protests organised in the last two months.

As per the BDA Act, there is a provision to accept the compensation under protest and demand better rates in the civil court. As the BDA has directed the bidders to make their own assessment of land acquisition costs, many companies are likely to stay away from participating in the tender.

Mavalipura Srinivas, who is part of the forum that is demanding compensation as per the 2013 law, warned of protests if the BDA opts for the old compensation rates.

"As per the BDA Act, a farmer stands to get Rs 65 lakh per acre in Mavallipura. For the same piece of land, the compensation will be as much as Rs 4 crore under the 2013 law," he said.