Sunday, July 29, 2007

Govt may snatch BMIC from NICE

Govt may snatch BMIC from NICE

US Consortium Enters With Sweeteners


Bangalore: The tussle between the Karnataka government and promoters of Bangalore-Mysore Infrastructure Corridor (BMIC) just got fiercer. The government filed an affidavit in the Supreme Court on Saturday, stating that it’s considering handing over the project to a new international consortium.
Even as BMIC promoters Nandi Infrastructure Corridor Enterprises (NICE) are in the 16th month of project execution, Karnataka government has justified the reasons for its rethink. A US-based consortium with a turnover of over Rs 10 lakh crore has offered to construct Rs 1,700 crore estimated monorail from the Electronic City to upcoming international airport at Devanahalli at no cost to government, return land not required for the project which is expected to fetch Rs 30,000 crore and deposit Rs 1,000 crore with the government to be forfeited in the event of it failing to meet deadlines.
The members of the Global Infrastructure Consortium are: Indus Capital, US; New York Life Insurance Fund, US; Urban Infrastructure Fund, Mumbai; Avenue Capital, US, Skil Infrastructure Ltd, Mumbai and IREO Fund, US.
“The proposal submitted by the new consortium not only enhances BMIC project’s value by providing an additional infrastructure in terms of mono rail, on the contrary dilutes various obligations of the government, which will be beneficial to the people and state,’’ the affidavit said.
Stating the government cannot impose penalties on NICE for delays in project implementation or financial closure, the consortium has proposed self-imposed penalties. If the financial closure does not happen within 18 months of signing the agreement, it will pay the government Rs 3 lakh for each day of delay and Rs 5 lakh per day if the project is not completed within seven years from the date of financial closure.
Criticising NICE for being interested only in “making profit from illegal sale of land in toll road,’’ the affidavit said the consortium wants to take up the project under the Swiss Challenge approach (a new bidding system to help the private sector). “These proposals are not only beneficial to the state, but the Swiss Challenge approach will ensure transparency. With NICE insisting on the right to sell and develop land for the purpose of profiteering at the expense of the state, Karnataka government is left with no option but to consider the proposal,’’ the affidavit said.
The Supreme Court will resume hearing of the contempt petition filed against the state government by NICE on Monday.


Rs 1,700-cr, 41-km Monorail (as per state government affidavit)

Self-imposed penalty to achieve financial closure within 18 months of all agreements being signed

Rs 3-lakh penalty for each day of delay, if any

Completion of BMIC project within 7 years

Will require just 6,499 acres of land for BMIC

NICE MD Ashok Kheny said: “I will put a consortium together to take over the international airport’s execution. Therefore, where is the sanctity of agreements? I refuse to succumb to such blackmail tactics.’’
Kheny told STOI that he had proposed a monorail up to Mysore, which was not considered. Besides the Swiss Challenge approach under Karnataka’s infrastructure policy was for new projects, not for ongoing ones.


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