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Government scraps pact with NICE

Special Correspondent

It means land will not be available to the company at 10 interchanges

BANGALORE: The State Government on Thursday decided to nullify an agreement signed in August 2002 with the Nandi Infrastructure Corridor Enterprise (NICE), promoter of the Bangalore-Mysore Expressway Project. With the annulment of the agreement, the land at 10 major interchanges along the proposed expressway will not be available to the NICE.

The coalition government, in accordance with the directions of the Karnataka High Court and the Supreme Court, was keen on restricting the scope of the project to the terms of the original framework agreement signed between NICE and the J.H. Patel Government in April 1997. At a meeting on Thursday, the State Cabinet decided to restrict the land made over to the project to 20,193 acres as per the terms of the original agreement.

Sources told The Hindu that the agreement “reportedly entered into in August 2002 had several insertions” which were not part of the one approved by the S.M. Krishna Cabinet. An important part of the 2002 agreement (which was initially proposed to enable NICE to obtain certain concessions from the Union Government) related to the grant of land at the interchanges along the expressway that was not part of the original framework agreement of 1997. With the Karnataka High Court and the Supreme Court directing that the expressway project should be in accordance with the framework agreement, the State Cabinet has decided to nullify the agreements entered into at a later date.

Chief Minister H.D. Kumaraswamy told The Hindu that the Government was not against the expressway project. But the project should be in accordance with the directions of the courts.

The annulling of the agreement clause signed on August 9, 2002, is expected to bring the project to a grinding halt.

Global tenders

Meanwhile, Global Infrastructure Consortium’s proposal was placed before the Cabinet meeting on Thursday.

However, sources in the Government said the next step of calling for global tenders to execute the expressway project would be based on the directions of the Supreme Court.

As and when the global tenders were called, it would be open for NICE to submit its proposal. If another company wins the project, it would have to pay NICE for the expenditure incurred so far in the execution of the project.

New policy

The State Cabinet at a recent meeting approved a new infrastructure policy incorporating salient features of the Swiss Challenge method under which long-pending projects could be handed over to new contractors for speedy execution.

With the annulling of 1.1.3 clause of the agreement of 2002, the Government had barred NICE from alienating the land made over to it to any party. This was considered a serious blow to NICE which wanted to raise funds using the real estate adjoining the expressway.

A senior official of the KIADB was recently suspended on charge of unilaterally granting permission to NICE to execute sale deeds.

Interestingly, the Global Infrastructure Consortium had accepted that the arbitration of dispute could be in courts of the State as against the clause that it would be in London as contained in the existing agreement with NICE. This was placed before the Cabinet.

The Karnataka Government has sought the permission of the Supreme Court to exercise its contractual rights in the execution of the Bangalore-Mysore Expressway project by the Nandi Infrastructure Corridor Enterprise (NICE) in the light of an international consortium suo motu offering to undertake the construction of the expressway and also construct a monorail along the expressway.

The execution of the Bangalore-Mysore Expressway project, which had been going on for over a decade (since 1994), had been suspended following several litigations between the State Government and NICE. Among other things, the company had filed a contempt petition against the State Government.

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