[sustran] Banaglore-Mysore Highway/India/Sustran

[pendakur]

The road between Bangalore and Mysore is a mess, both in terms of functional standards and quality of maintenance.  If we were to cancel this project, what do you do with all the truck and passenger vehicles?  Simply saying "no" may answer one question, but does not solve the problem.

The improvement of the railways, as the Chinese have done, is one option for a lot of passenger transport and some goods transport.  There are many structural problems in more freight through the railways.  Ask the business people as why they prefer to send by "lorries" than by railway.  They will tell about time delays, inefficiencies, bribes, and theft.  Otherwise, where is the logic for sending most of the goods by trucks?

While there are many environmental, resettlement, and other property issues that must be addressed, the simply "no" does not address the issues.

One more thing.  No matter how many foreigners want to solve this issue and come to the defence of "no roads" and "only railways', the only people that can redirect the finances and the energies are the local people.  This would be the client governments at the national and state levels.

Whatever happened to democracy in the "largest democracy into world"?

Cheers.  
V. Setty Pendakur
  ----- Original Message from ESG
    Press Release - July 04, 2002

    SHELVE BMIC - The "Enron" Of Road Development

    GoK should Immediately Implement the Expansion of SH-17 and Doubling of Railway

    According to recent press reports, the Government of Karnataka (GoK) has opted to expand the existing Bangalore-Mysore highway (State Highway-17) from its present 2 lanes, to a 4-lane highway at the cost of Rs. 331 crores. Karnataka Road Development Corporation (KRDCL) officials have confirmed that the expansion project has the following specifications: 2-lanes measuring 7 metres wide in either direction; a 2 metre median strip; shoulders and embankments on either side. The total "right of way" would be 45 metres. Although the width of the road and median will come to only 16 metres, it is important to note that the shoulders will allow ease of passage to pedestrians, farmers, bullock carts and the like, thus mitigating accidents and ensuring a smoother flow of traffic. Total land acquisition between Bangalore and Mysore would be only 65 acres.

    It is well established that the majority of accidents on the existing road are primarily due to bends that are hard to negotiate. The planned expansion, according to KRDCL officials will ensure that road geometry is also addressed and the expanded road will be straighter, safer and easier to travel. Most importantly it would require negligible acquisition of agricultural land and marginal acquisition of existing commercial zones to prevent "ribbon development". A combination of this project and the doubling of the railway line between Bangalore and Mysore (approx. a distance of 140 kms.) will be viable economically, and more acceptable environmentally and socially. In comparison to other existing proposals to develop transport corridors between the two cities, expansion of the existing highway is far more affordable.

    Considering this situation, the question looms as to why the Bangalore-Mysore Infrastructure Corridor Project (BMICP) is still being considered. According to reports, the Asian Development Bank has assessed that the traffic volume between Bangalore and Mysore does not justify an expressway of the type proposed in BMICP and is significantly less than international standards for expressways. Of the options available then, to improve safe traffic flow between Bangalore and Mysore, BMICP has the greatest adverse impact, the highest financial outlay, and the most uncertain returns. Not only will it involve a 6-lane expressway which apparently requires over 7000 acres of land, but would demand the acquisition of over 14000 acres of land for 5 gated townships developed clearly to extract real estate value, so as to ensure the expressway becomes financially viable! It is very doubtful if the real estate projections of the BMICP are believable given that several similar housing, recreational and corporate facility developments in and around Bangalore have failed. In other words there is simply no demand for expensive, exclusive even, housing developments between Bangalore and Mysore. Most importantly this extravagant proposal costs over Rs. 2,000 crores. Nandi Infrastructure Corridor Enterprise, promoters of BMICP, has also failed to comply with a string of compliance conditions in the clearance issued by the Karnataka State Pollution Control Board and the Ministry of Environment and Forests. 

    Keeping this in view, we must call into question the reported commitment of HUDCO to both the expansion of SH-17 and the in-principle support to BMICP. Even if HUDCO had all the money to fund both projects, the moot point would be if it were at all required to have two new highways between Bangalore and Mysore. Such mockery of "development" cannot be sustained in the claim to delivering the objectives of wider public interest. ICICI and the consortium of financiers must consequently withdraw financial support to BMICP, as with the expansion proposal and the doubling of the railway line, the BMICP would be the "Enron" of Road Development. The Reserve Bank of India is clear that projects such as BMICP should not be easily supported by financial institutions and has even released a Circular No. IECD No. /08.12.01/2001-02 dated 20 February 2002, extracts from which state that:

    "In respect of infrastructure projects, where financing is by way of term loans or investment in bonds issued by government owned entities, banks/Financial Institutions should undertake due diligence on the viability and bankability of such projects to ensure efficient utilization of resources and creditworthiness of the projects financed. Banks should also ensure that the individual components of financing and returns on the project are well defined and assessed. Lending/investment decisions in such cases should be based solely on commercial judgment of banks/Financial Institutions. There should be no compromise on proper credit appraisal and close monitoring of the projects financed and banks should ensure that only projects that are intrinsically viable are financed. State Government guarantees may not be taken as a substitute for satisfactory credit appraisal and such appraisal requirements should not be diluted on the basis of any reported arrangement with the Reserve Bank of India or any bank for regular standing instructions/periodic payment instructions for servicing the loans/bonds."

    The BMIC project has repeatedly claimed that project financing is based on GoK guarantees. In view of the RBI circular, it would seem the GoK is supporting an economic disaster against RBI advice, to say the least.

    Keeping the expansion of SH-17 in view, we urge the GoK to stop investing wastefully its time and resource in being a part of the BMICP, and focus on assuring the quick implementation of the SH-17 expansion. In addition, doubling the existing railway line alongside, at a reported cost of Rs. 276 crores would help decongest Bangalore and develop Mysore while boosting the economy of Mandya and Chamrajnagar districts, thus reducing regional imbalances. Furthermore, reviving the shelved proposal of developing housing at important railway stations, will surely meet the growing demands of providing all sections of society affordable housing and safe travel options. This way Bangalore can be protected from the ugly sprawl as proposed in the BMICP. 



    Leo F. Saldanha Nagini Prasad Rajmohan Pillai

    Coordinator -ESG Campaigns Coordinator Coordinator (Infrastructure Finance Research)

    For more information on the BMICP please visit http://www.indiatogether.org/campaigns/bmic

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