Plans for a rapid access way between Bangalore and Mysore began in 1988 when the Government of Karnataka in an attempt to stagger the growth of Bangalore proposed expansion into the Bangalore-Mysore region by building an expressway with private participation.

In 1995 when Deve Gowda himself was chief minister the state government offered the Bangalore Mysore Expressway project on a 30-year build-own- operate-transfer (BOOT) platter — with real estate and toll fares identified as revenue streams for the private developer. He signed an MoU with a consortium comprising M/s Vanasse Hangen Brustlin Incorporated and SAB Engineering and Construction Incorporated from the US, and M/s Kalyani Group Limited from India. The consortium assigned implementation to NICE, a company created by it.

In 1997 when Deve Gowda fortuitously became the prime minister his successor CM, the late J.H. Patel, signed a framework agreement with NICE to provide 20,193 acres of land (13,327 acres private land, 6,956 acres government land) to create a 111 km expressway and five townships between Bangalore and Mysore, over a period of 10 years. The world-class, access-controlled, toll expressway was to reduce travel time between the two new economy cities from over three hours to a mere 75 minutes. With the self-sustaining townships thrown in and nearly 700 sq km area around the project developed, a new economic region, the size of Singapore, is projected to emerge. Bangalore-Mysore could be a Tokyo- Yokogawa. The economic potential of the project has drawn investment for the first phase from the Anil Dhirubhai Ambani Group.

Political opposition to the project began in late 2003, just prior to the 2004 polls, when an-out-of power Deve Gowda began accusing NICE of using project land to carry on a real estate business in association with ruling Congress leaders. Deve Gowda alleged that land in excess of requirement was acquired by NICE for the first phase of the project.

When Deve Gowda surprisingly returned to power in association with the Congress in 2004, the Karnataka government began piling up the agony for the BMIC project. First, the Karnataka government turned against NICE in the high court. In the middle of an appeal against a single judge’s order to reduce land for the project by 40 per cent, a Deve Gowda inspired government began accusing NICE of fraud, saying that land was indeed acquired in excess.

This turn of the government did not stand the scrutiny of both the High Court and the Supreme Court. The government and Deve Gowda have drawn flak from the courts for the sudden change in stand. Now, with Deve Gowda’s confident, young son Kumaraswamy at the helm of the state’s affairs, an attempt is being made to take over the entire BMIC project through legislation.

Kumaraswamy argues that the J.H. Patel government and the S.M. Krishna government gave far too much control over the key Bangalore-Mysore economic region (where he himself owns land) to NICE and that it is time to wrest back control. “We are not opposed to the project. We want to take back excess land and auction it to create a state infrastructure fund and to compensate farmers feeling cheated by the project,” says Kumaraswamy. “The government has no control over the project area even if it wants to put up a housing project for the poor,” he says.

Officials of NICE argue that at this rate “the government can tomorrow try to take over Infosys with a legislation saying excess land has been allotted to the company or the Bangalore International Airport from the private consortium”. The project has a real estate component, but this is not new, say the officials.

The Kumaraswamy government’s move to take over the project will depress investor sentiment in Karnataka at a time when the government itself is trying to instill confidence in Bangalore and Karnataka after a virtual crumbling of infrastructure in the region. Sources say the government has not gone in for a complete cancellation of the project on account of the international arbitration clause in the Framework Agreement. The proposed legislation is also seen as an attempt to work around the arbitration clause.

johnson.ta@expressindia.com