Thursday, July 28, 2005

Bangalore private road network to open this year

Bangalore private road network to open this year
Bloomberg News/The International Herald Tribune

BANGALORE The Bangalore-Mysore Infrastructure Corridor, India's largest private-sector road project, will be partly operational this year, easing congestion that has made companies like Biocon threaten to set up new operations elsewhere.

Sections of the 22.5 billion rupee, or $518 million, project will be open to traffic by December, Ashok Kheny, managing director of Nandi Infrastructure Corridor Enterprise, said.

India's Supreme Court last week ordered that construction should be allowed to continue despite opposition from the Karnataka state government, according to the court's Web site.

The planned network of roads and townships is designed to speed traffic flow around Bangalore, home to almost one-third of India's outsourcing and technology industry and host to companies including Intel and General Electric. The 10-year-old project has been delayed by opposition from landowners, environmental groups and the state government that was elected last year.

"This should have been done years ago," said Kiran Mazumdar Shaw, chairwoman of Biocon, the biggest biotechnology company in India, which employs about 1,500 people in Bangalore. Biocon is considering expanding elsewhere because poor infrastructure "is suffocating and strangling business growth, especially in Bangalore," she said.

A final verdict in the dispute with the state government, which has accused Nandi of trying to acquire excess land, may be handed down by the Supreme Court in the second week of November, court documents said.

The office of Karnataka's chief minister, Dharam Singh, including his political secretary, could not be reached for comment.

Bangalore accounts for almost a third of India's $17 billion in software exports. The city's population is rising by 3.2 percent a year and may reach 10 million by 2021, according to the Bangalore Development Authority. The population was 5.68 million in a 2001 census.

Growth is putting pressure on infrastructure in the 468-year-old city, capital of Karnataka state. Rival cities are wooing away companies like Microsoft, which last year chose Hyderabad for its largest non-U.S. software center, and Dell, which in March decided to open its next call center in the city of Chandigarh.

The Nandi project's proposed roads would allow trucks to detour around the city center, and reduce travel time between Bangalore and Mysore by two hours to one and a half hours, Kheny said. The project also includes five townships able to house 100,000 people each to foster economic development outside Bangalore.

"Bangalore-Mysore will be one of the fastest-growing corridors in India," following the construction of the roads, the chief financial officer of Infosys Technologies, Mohandas Pai, said last week. Bangalore's largest software company is spending $119.3 million on a training facility in Mysore, Karnataka's second city.

The Supreme Court's order on July 18 that the state government should allow construction "removes the last hurdle," Kheny said.

The first phase of the project, about 62 kilometers, or 39 miles, of roadway in Bangalore and its outskirts, will be ready by the end of the year, he said.

The whole project, including a 111-kilometer toll road from Bangalore to Mysore, a 400-megawatt power plant and a sewage treatment facility, will be ready by August 2007, he said. The existing nontolled highway is being separately expanded to four lanes under a 1.16 billion rupee government contract, the Times of India reported on July 7.

Lack of infrastructure spending has curbed India's ability to compete with countries like China, analysts at Morgan Stanley said in a research note on July 8. More than 90 percent of India's 65,000 kilometers of national highways are single or two-lane roads, allowing an average speed of less than 50 kilometers an hour.

The country spends $2.5 billion to $3 billion each year on the development of roads, compared with $25 billion a year in China since the mid-1990s, the analysts said. China has an expressway network of almost 30,000 kilometers, 15 times larger than India's.

Red tape has slowed development. The Bangalore-Mysore project began in 1995, with the Nandi Group spending the first nine years pushing for legislative changes that would allow it to build, own and operate the roads and to levy tolls.


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