Friday, August 31, 2007

Govt. annuls NICE

Global tenders sought for Bangalore-Mysore corridor project

Karnataka cancels tripartite pact with promoter consortium


Govt adopts Swiss Challenge System: invite a third party to offer a better deal and ask original promoter to match it.

Global Infrastructure Consortium has offered to take the project forward.

Govt. stopped executing sale deeds that lets the earlier consortium sell project land.

Our Bureau

Bangalore, Aug. 30 The controversy over the Bangalore-Mysore Infrastructure Corridor Project reached another flashpoint on Thursday as the State Cabinet decided to call global tenders to take over the ongoing project.

It plans to do so under its recent infrastructure policy which adopts the Swiss Challenge System, i.e. to invite a third party to offer a better counter-deal for a project and ask the original promoter to match the deal.

It also approved cancelling a tripartite agreement signed by the State Government on August 9, 2002 with BMICP promoter consortium NICE and its special purpose vehicle, NECE.

The agreement, in particular Clause 1.1.3, entitles the two entities — Nandi Infrastructure Corridor Enterprises and its subsidiary vehicle for phase 1, Nandi Economic Corridor Enterprise Ltd, to sell the project land in their hold.

The State has already stopped executing sale deeds in favour of NICE and the sale of BMICP land, while NICE has challenged the matter in the Supreme Court.

In a briefing after the Cabinet meeting, the Primary Education Minister, Mr Basavaraj Horatti, said NICE was trying to acquire land in excess of the court-stipulated 20,193 acres and also alienate land at the interchanges and the State has been looking into irregularities in the project.

Meanwhile, the State, he said, wants to go ahead with the project through another consortium which has made a counter-proposal.

Global Infrastructure Consortium (GIC) has offered to take the project forward as per the framework agreement and agreed to have the arbitration at Bangalore as against London at present.

The new proposal’s benefit to Karnataka would be ascertained by placing a global bid under the new infrastructure policy through the Swiss challenge method, Mr Horatti said.

The State would seek the apex court’s permission to sign a new pact with GIC.
Project so far

The three-phase BMIC project is currently in its first phase, at the Bangalore end. Only the road work has been taken up.

Phase 1 includes a 41-km semicircular peripheral road hugging Bangalore and connecting stretches of three national highways.

A 9-km link road and a township at Bidadi are part of it. NICE says 95 per cent of Phase 1 is ready and that it needs another 3,000 acres, including land for the township.

It currently has 7,000 acres in its possession, of them 700 acres is Government land transferred to it. Some Rs 1,500 crore has been spent.
NICE to fight move

The Rs 2250-crore BMICP, conceived in the mid-1990s, is co-promoted by the Kalyani group and comprises a 111-km tolled expressway between Bangalore and Mysore and five townships along the route.

Reacting to the move, NICE said it would pursue this in the Supreme Court along with its contempt petition.

“The State Government has done this to harass NICE. The action is in direct violation of the Honourable High Court and Supreme Court of India’s orders to both NICE and the State Government to implement the project in letter and spirit (of) the Framework Agreement entered into between the State and NICE on 3rd April 1997,” its release said.
Land issue

According to NICE, the tripartite agreement was signed only to assign the rights of implementation of the first phase to NECE.

“Cancelling the purely administrative agreement between GoK, NICE and NECE does not take away the right of NICE from securing lands on sale deed basis since this right of NICE is upheld in the framework agreement,” it said, citing clauses 3.2.3 and 3.2.4 of the Framework Agreement.

The decision to invite global tenders for the project under the Swiss Challenge method, it said, was “a ridiculous proposition”.

The method applied only to new, innovative projects in the early stages of awarding the contract.

“This decision (goes against) the law and the spirit of business ethics. It is clearly aimed at favouring a non-registered and fraudulent consortium called Global Infrastructure Consortium,” it said.


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