Stung by farmers? agitations and repeated adverse court rulings on land acquisition, the Uttar Pradesh government has decided to restructure its development projects by replacing land with viability gap funding (VGF) as the new bidding parameter. That would mean the revenue model for these projects shifts from being land-based to cash-based.
The first project that would be restructured is the prestigious 150-km, 8-lane, access controlled Upper Ganga Canal Expressway project, which proposes to connect Sanauta Bridge in Greater Noida with Purkazi on the Uttarakhand border at a cost of R8,200 crore. The project was shelved in August last year at the bidding stage. The original date for the completion of the project was in 2014.
Under the VGF scheme, 20% of the project cost is borne by the Centre, while anything above 20% is borne by the state government.
This decision can be viewed as a natural consequence of the new land acquisition policy of the Uttar Pradesh government that was unveiled in June.
Under this policy, private developers were expected to acquire land on their own, with the state government?s role being limited to that of a facilitator. With land already a high risk commodity hard to acquire, investors feel that without the state government?s support, its acquisition would be all the more difficult. Hence, the best way out could be that the revenue model is tweaked to include the cash component as the VGF rather than land parcels.
This decision is all the more significant when seen in the context of the immense problems being encountered in the completion of the Yamuna Expressway project, which includes five land parcels of 500 hectare each along the 165-km expressway from Greater Noida to Agra. Farmers along this stretch have been protesting against the acquisition of their land for the project.
With Assembly elections round the corner, this decision of the state government is being seen as a strategy to assuage the feelings of the farmers without dropping the development plank.
The farmers? agitation has, in a way, compelled the government to think about alternative ways to go forward with its development agenda and we have started working on restructuring the Upper Ganga Canal Expressway project.
?The exercise is likely to take a month?s time, after which we will need to get it cleared by the state cabinet. Once we get that, we will have to redo the bidding process from scratch,? an official said.
This project is also held up due to environment clearances, requests for which are pending at the Central level. Seven companies, including Jaypee Associates, IRB Infra, ESC Apollo and Isolux, Reliance consortium, Shreya Infrastructure and PNC consortium and Galstar, Era Infrastructure and Sidmost consortium had already submitted technical bids.