A NICE fraud?
An environmental group in Bangalore discovers that the project consortium given the contract for Bangalore Mysore Infrastructure Corridor project, never existed in theory. Subramaniam Vincent reports from Bangalore.
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The contract for one of the largest transportation related infrastructure development schemes initiated in India in recent times, the Bangalore Mysore Infrastructure Corridor, [BMIC], has been awarded by the Government of Karnataka, to a consortium that even in theory, never existed. What's more, this is a project that has been heralded as a "model" for India in the era of that benevolent tide that promises to lift all boats, Globalisation. The Economic Times, April 27, 2001, even carries a story on how this freeway project is going to bring the US look and feel to India, reporting that BMIC is based on a Maryland success story.

“VHB is not and never has been a principal in Nandi Infrastructure Corridor Enterprise (NICE). VHB was engaged by NICE to prepare a preliminary plan for the BMIC. This plan was completed in 1995. Since then VHB has not been involved.”, wrote Richard Hangen, Senior Vice President of the US based Vanasse Hangen Brustlin (VHB, rhangen@vhb.com), in response to a query from Leo Saldanha, Coordinator of the Environment Support Group. “I do not know of the existence of any scope defining a future role for us”, he further adds, in a different letter.

That then, is how the Senior Vice President of the US based Vanasse Hangen Brustlin (VHB, www.vhb.com) has very recently characterised the role for his company in the controversial Bangalore Mysore Infrastructure Corridor (BMIC). Nandi Infrastructure Corridor Enterprise Ltd (NICE) is the company formed to develop the controversial BMIC project. Between 27 March and 3rd April 2001, various query letters were sent by Leo F. Saldanha, Coordinator of Environment Support Group via email to Mr.Richard Hangen.

So what is the story in this neck of the woods, Bangalore? Contrary to Mr. Hangen’s assertions, NICE claims that VHB is a part of the Project Consortium. In its entire official project documentation NICE repeatedly affirms the integral involvement of VHB in the project and in its official website (http://business.vsnl.com/niceltd/) claims for VHB a role and capacity as “the Consortium’s lead engineer for the Bangalore Mysore Infrastructure Corridor Project”. Clearly, this is contradictory to what Mr. Hangen claims.

VHB’s involvement in the BMIC project was first mooted by the Governor of the US State of Massachusetts, who was on a trade mission to Karnataka on 20th February 1995. On the same day, the Karnataka Government signed an MOU with VHB, SAB Engineering and Construction Inc., USA and Kalyani Group of India committing State support to the BMIC project as conceived by these companies. Subsequent statutory clearances have proceeded on the basis that all three companies as defined in the MOU are involved in the project.

Clearly, Mr. Hangen rejecting NICE’s claim that VHB is involved in the project indicates something gravely wrong somewhere.

Consider this. Without VHB, NICE is clearly not in a position to provide techno-economic support to this massive project. "By unquestioningly sustaining NICE’s claims, the Government of Karnataka has been party to this fraud of clearing the path for submission of project development capacity without basis. Over 25 key departments and agencies of the Government have reviewed the project over the past six years without examining parties involved. And now, VHB insists it has not been involved in the project since 1995 and that it has no plans for future involvement!", says Leo Saldanha.

It is a minor consolation that a fraud on the people of Karnataka has been uncovered. A fraud that has been actively perpetrated on the decision making process of the Government, and is clearly against the wider public interest.

What should shock concerned citizens everywhere is that the Karnataka Government has pushed through the project without reviewing any alternatives proposed, including the viable development of the existing two highways and minimum investment needed for doubling the rail-link between the two cities to enable safe mass transport systems. Further, on the advice of NICE, the Government has classified all details of the project, including techno-economic, environmental and social documentation, as confidential; a stand that has been upheld by the High Court of Karnataka.

Indeed, a public-infrastructure project, whose documents are not open to public scrutiny and debate.

Nonetheless, we assert that this is a democracy! But let's take a step back. Perhaps this is not a project for the many, using the resources of the many. A few lines about this project will help us understand why.

  • The BMIC project involves the building of an expressway between Bangalore and Mysore (about 130 kms). The cost of the BMIC project is Rs. 4,000 crores presently (US$ 1 billion, up from the previous costing of US$ 500 million, or Rs. 2,000 crores approx). Only around 7,000 acres of land is required for the Expressway, and yet around 21,000 acres is proposed for acquisition.


  • Tolls collected from the low traffic generated are not going to pay for the project. Well, step in, cross-subsidisation. About 7,000 acres of the land to be acquired belongs to the Government [i.e, the people of Karnataka], and this will be leased on to NICE at Rs. 10/acre per year, (i.e. 20 cents) as a subsidy.

    Yes, rupees 10 per acre, in case you are shaking your head.

    "There is huge government subsidization for the private land [about 14000 acres], which is being acquired from farmers. NICE will pay compensation to the farmers (after acquisition by the Government) at about Rs. 1 lakh (a lakh is one hundred thousand) per acre, and sell it in their townships at about Rs.5 crores (a crore is ten million) per acre", says Maj.Gen.S.G.Vombatkere, of the Mysore Lok Swaraj Andolana.

  • The primary purpose of the additional land is the development of five townships along the corridor including a Corporate Centre, Commercial Centre, Industrial Centre, Farming and Marketing Centre, Heritage Centre, Agricultural Centre and Eco-Tourism Centre. Income generated from exploiting the real estate so created would pay for the entire infrastructure. Whilst the Expressway will be returned to the Government in 30 years, the townships would be owned by the developers. The project promoters claim that the development of the townships will help in decongesting Bangalore.

  • What else? Two thirds of the land proposed for acquisition involve prime agricultural lands irrigated by a network of canals. A fair amount of forests and internationally recognised wetlands are going to be lost.

  • The most damning aspect of this project is that it will displace about two lakhs (200,000) people (information provided by NICE), of whom only about 20% will be entitled to compensation on the basis of landholding. The remaining 80% who are landless labourers, artisans and others dependent on agriculture-related activities, will not be compensated in any manner whatsoever.

    The destination of these people, if you ask social scientists and peoples' groups who have documented generations of displaced people decade after decade, is not unknown. They will soon end up in urban slums. "Even some of the compensated farmers could join them in a few years, once the pittance of monetary compensation they get for their land is all spent.", says Vasu, of the Karnataka Vimochana Ranga, a grassroots liberation movement.

    "Based on our analysis, it is clear that both the cost and the scale of displacement are being underplayed by NICE. What's worse, there is no land for land compensation provided for in this project", says Maj.Gen.S.G.Vombatkere, emphatically.

It is not known whether the human and ecological costs of this project have ever been properly audited by its promoters. Even if they have been, they have not been open to public scrutiny at the "hearings" conducted in mid 2000. Worse, the projected affected rural people have not been given Kannada versions of these documents, despite assurances given by government officials in March 2000. Instead, strong use of force has been targeted against citizens’ groups, and State initiated human rights abuses have been the norm during Statutory Public Hearings held last year. [see Information first, infrastructure next]

Some hope emerged when on July 14, 2000, the National Human Rights Comission (NHRC) accepted a petition from Leo Saldanha, one of the persons assaulted by Police at the Bangalore hearing in July 5, 2000, in full view of the public and the media. In their response to the complaint which they filed with the Commission in November 2000, the Karnataka Police deny the charges of human rights violations and instead accuse all those who were assaulted and arrested of being guilty of unlawful assembly and obstructing proceedings. It is not clear how the public hearing could proceed meaningfully without important project related documents [numbering more than ten], and futhermore, how an alert public gathered to scrutinize the project are an unlawful assembly! Curiously, a copy of the Police response was sent to the petitioner for his comments only in March 2001, four months after the Police filed their response. As of April 2001, the NHRC still has the case file open.

In the meantime, on April 26, the Union Public Works Minister, Dharam Singh issued press statements saying that "the Government had submitted detailed proposals to the Union Ministry of Environment and Forests concerning resettlement and rehabilitation, clearing all major hurdles for the project." Commenting on the meeting of the high-level advisory committee of the MEF on April 27, to consider the proposal for environmental clearance to the BMIC project, the minister said that "the committee is likely to give clearance for the project".

Like cars on a north american freeway, the ironies have continued to flow. At about the same time the "hearings" were "held" the Government of Karnataka was holding a series of consultations with academics, trade unions, journalists, legislators and NGOs on legislating a Right to Information Act. Perhaps this "right" did not apply to those who were excercising their democratic right to information regarding the BMIC project.

A note on the official word, on whom this project is for. The Karnataka Chief Minister S.M. Krishna recently stated that the BMIC expressway is for those who can afford the toll. There's no official word on why government officials across a plurality of functions have callously set aside the fact that the real price is being paid by thousands of common people in the rural areas ranging from suburban Bangalore to Mysore, as well as the ecology. On the other hand, the possibility of informed public opinion influencing decison-making through scrutiny and debate [a.k.a democracy], was brushed aside in the public "hearings" of 2000.

Perhaps, for those who couldn't afford the toll, or live in the lavish townships that would be developed, there is always the old road and congested cities. In fact the expressway and townships proposed are planned to be walled all along to provide safe passage and enclaves for those who can afford!

Let's get back to the most recent development. So, with the lead engineering member of the BMIC consortium saying that they were never part of it and do not see any role for themselves in the future, what has been opposed from the beginning as a classic case where the well-off are being subsidised by the voiceless, now seems to have regressed to take on another dimension.


Clearly, there is a warning here that must be heeded. Reckless infrastructure "development" in the absence of clean, transparent and just governance, will continue to result in the abuse of State machinery and appropriation of people's resources for the benefit for the few, at the cost of the many. What else can this foist on the people, one wonders, but case after case of touted cure being worse than the disease?

And yet, the situation is not beyond redemption. The Karnataka Vimochana Ranga (KVR) is organizing a mobilization of the affected farmers and landless laborers starting May 1, and culminating in a rally at Mandya, near Mysore, on May 10, 2001. Their opposition is bound to increase only further with the latest revelation.

Finally, what can concerned citizens of Karnataka and non-residents do?

Excercise your democratic right to pressure the authorities. Write [and encourage your friends to] letters, emails and faxes. Urge that all clearances given to the BMIC project be revoked, the Government of Karnataka stop the ongoing process of land acquisition, and the Ministry of Environment and Forests which has been considering the project for final environmental clearance, reject the same. Finally, request that an investigation into this matter be initiated immediately.

Subramaniam Vincent
April 27, 2001.


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