Sunday, July 29, 2007

Karnataka seeks SC nod to chuck out NICE

Karnataka seeks SC nod to chuck out NICE
From Pratap K Patnaik, DH News Service, New Delhi:
The Government of Karnataka has approached the Supreme Court seeking permission to throw the Nandi Infrastructure Corridor Enterprise (NICE) out of the Bangalore-Mysore Infrastructure Corridor Project (BMICP).

The govt wants to hand over the contract to a new consortium of Indo-US companies for the timely completion of the project.
The additional affidavit filed by Karnataka government said, “The $250 billion Global Infrastructure Consortium (GIC) has put forth a proposal indicating that it would accept the terms and conditions of the framework agreement of April 3, 1997 signed between Karnataka and NICE and would pay the cost of existing infrastructure as evaluated by an independent agency while taking over the project on as-is-where-is-basis.”
The consortium has proposed to construct a monorail on a 16-km stretch of the peripheral road at a cost of Rs 17,000 crore for the benefit of the public without any additional burden on the State, the application said pleading for the new consortium.
Unlike the NICE, the new consortium has agreed to return the entire 6,999 acres of land earmarked for the toll road under the framework agreement as per the project conceived originally and has also undertaken to return to the government the land which would not be required, Karnataka said, seeking the dismissal of the petition of the NICE.
“The averments made and various grounds raised by the petitioner (NICE) in the present writ are devoid of any merit and may be dismissed,” said the affidavit filed on July 27, 2007.
The GIC has agreed to follow Swiss challenge approach by which it would pay penalty to the government at a rate of Rs 7 lakh per day if the project is not completed in seven years from the date of financial closure, said the affidavit filed by counsel Sanjay Hegde. The State alleged that NICE had obtained by fraudulent means the right to develop and sell additional 2,289 acres of land, and had reduced the quantum of land ought to be reverted back to the government after concession period is over from 14,255 acres to 11,966 acres.
Interim application
The government has already filed an interim application before the court to seek suitable modifications in the July 21, 2006 order to ensure safeguarding of the interests of the State and conduct a preliminary fact finding enquiry against officials allegedly involved in corrupt practices. It has also pleaded that the Justice B C Patel Commission of Inquiry be allowed to proceed with its probe.
The matter, which would come up for hearing on Monday, has been embroiled in litigation for 11 years now 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 State government officers and for so long has been able” to suppress the massive records of the State.
According to the framework agreement signed on April 5, 1997 between the Karnataka government and the developers, NICE had the right to saleable land of 5,937.3 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 3,000 crore.
New Delhi, dhns: The Global Infrastructure Consortium (GIC) claims to be a $250 billion conglomerate of companies from the United States and India. The consortium has been formed by Indus Capital, USA; New York Life Insurance Fund, USA; Urban Infrastructure Fund, Mumbai; Avenue Capital, USA; SKIL Infrastructure Limited, Mumbai and IREO Fund of the USA with its correspondence address at Air Conditioned Market, Mumbai. It has an office at Koramangala in Bangalore.
Lekhraj Jain, the authorised signatory for the GIC, has in a letter dated July 23, 2007 offered to take over the project. The proposal claims that the members of the GIC are companies having extensive experience in the development of infrastructure projects or companies who have ample exposure to infrastructure projects.
The members of the consortium have promoted several infrastructure projects inside and outside the country in key areas such as monorail, ports, shipyards, railways, roads, SEZs.


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