The Bangalore Metro Rail Corporation Limited (BMRCL) is currently involved in a litigation against the Traders’ Association of Chinmaya Mission Hospital (CMH) Road. The traders’ filed their case in November 2006. Their main prayer to the court has been to change the alignment of the Metro from CMH Road to Old Madras Road. Their central concerns have been the losses to their businesses arising from the Metro and its compensation package, and the government’s ignoring at least one major report recommending that Old Madras Road is a better option for aligning the Metro.
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The message seems clear and present. Pic: Zainab Bawa.
At the final hearing on their writ petition on 26 February, Judge K L Manjunath pointed out that the court cannot order a change in the alignment. Aaren Associates, representing BMRCL, argued that "The court is not a forum to judge the merits and demerits of economic and administrative politics." Pramila Nesargi is representing the traders in this litigation. Judge Manjunath concurred with the BMRCL’s counsel’s view and said, "These are matters of policy. The court cannot decide on policy. Policy decisions are the prerogative of the Executive, the Parliament. You cannot go down to question the genesis of the Metro project."
The process of acquiring land and private properties has become one of the most contentious issues that is now impeding the implementation of Namma Metro. The BMRCL is acquiring a total of 228.614 acres for the Metro Rail Project. The projected year for completion of the Metro is 2011.
Indiranagar apart, Rajajinagar too has traders, tenants as well as owners of properties agitating against the BMRCL’s plan to align the Metro via Mahakavi Kuvempu (MKK) Road. Nagendran of BMRCL’s Public Relations department says this is the biggest hurdle confronting the implementation of the Metro. "People will always have grievances and will not want the Metro to run along their properties," says Nagendran. This causes delays for the project, with the BMRCL incurring losses to the tune of Rs.50 crores per day, he claims.
The story underneath the litigation
The BMRCL is awarding compensation packages based on the recommendations of the PSS Thomas Land Committee submitted in May 2007. This committee determined the ‘fair market value’ (FMR) of lands that will be acquired by the BMRCL. It was assisted by real estate consultants Trammel Crow Meghraj. The lands were not valued individually, but in parcels and groups.
For instance, property owners around M G Road are receiving compensation to the tune of Rs.12,000 per sq.ft. as judged by this committee. This is because Plaza Theatre on M G Road was transacted at this rate a month before the Thomas Committee was constituted. The committee therefore decided to establish Rs.12,000 per sq. ft. as the rate for all properties that will be acquired on M G Road.
P Rajan, a lawyer and researcher with the Bangalore-based group CASUMM (Collaborative for the Advancement of Urbanism through Mixed Media) has found that 60-65 per cent of the commercial and residential occupancy in the city is based on tenancy. Rajan studied the impact of Namma Metro on the CMH Road in Indiranagar and the MKK Road in Rajajinagar and has produced a report on the same. As part of this study, Rajan interviewed 120 of the 900 traders functioning at CMH Road last year. A copy of the report is available at here.
The Chinmaya Mission Hospital Road, in the direction towards the Indiranagar 100 Ft Road. Pic: Zainab Bawa.
There is a marked difference between the actual value of properties on CMH Road currently and the compensation being offered. Rajan points out that the fair market value was derived by averaging two sets of figures: first, figures based on sale or local market ‘asking rate’ enquiries, and second, the consultant’s own knowledge of real estate market in Bangalore using "prevailing lease rental rates, standardised construction costs and real estate capital values in the market".
To its already lower valuation, the consultant had recommended that the value be further reduced by 25 per cent, Rajan explains. Says Rajan, "The decision to reduce FMR by 25 per cent was a unilateral one taken by the consultants and is not open to questioning by those to be compensated." The PSS Thomas Land Committee Report is available on the BMRCL website.
According to Rajan, around 15,000 persons from CMH Road will be displaced if the alignment of the Metro is not changed. BMRCL is largely negotiating with owners because it believes that owners and not tenants are eligible for compensation. Owners are eligible for several different types of allowances (shifting, inconvenience transitional and rental income) in addition to compensation for the value of the land.
The table below shows that BMRCL compensation’s is not based on market values.
Table No. 1 Comparing guidance values, market values and BMRCL FMR in CMH Road and MKK Road (in Rs/sq.ft.)
Source: Rehabilitation Package 2007 and interviews with local real estate agents. Shared by P Rajan based on his report with CASUMM on the impact of Namma Metro on CMH Road and MKK Road.
One of the shop owners who was extremely unhappy with the BMRCL compensation package said that if she were given the right compensation amount, she would take it and leave. Instead, she was fighting the litigation in the High Court with the traders association.
BMRCL is also awarding compensation to both commercial and residential tenants, not just property owners. The rehabilitation package for tenants has developed slots of compensations based on the amount of VAT and Sales tax the traders pay. Those who pay less VAT and Sales Tax get awarded less compensation.
Table No. 2 Type of Allowance for Commercial and Residential tenants
Source: Rehabilitation Package BMRCL 17 Aug 2007. Compiled by P Rajan based in his report with CASUMM on the impact of Namma Metro on CMH Road and MKK Road.
Madhu Menon is one tenant who runs an East Asian cuisine restaurant named Shiok on CMH Road. He complains that even though he pays a large amount of VAT, the compensation awarded to him is the same as that awarded to businesses paying Rs.15000 more. Everyone paying VAT above Rs.15000 has been lumped into one segment, and are being offered Rs.1 lakh as business loss allowance.
The property Shiok has been rented and is not being acquired, but because Menon’s business is going to be affected while the metro’s construction goes on, he is considering moving out. However, not everyone on CMH Road has the luxury of moving elsewhere. Menon also pointed out that the shopowners dealing in electronic goods pay VAT worth lakhs of rupees annually. It is therefore unfair that they be given such a pittance as shifting allowance and compensation.
Likewise, the owner of the Titan Showroom CMH Road whose property is not being acquired is contending the alignment too. CMH Road is on its way to beat Commercial Street as the number one retailing area of Bangalore City and the Metro is going to destroy the road, he says.
Traders say that it will not be feasible for them to carry out their businesses in other parts of the city given the high property prices and rental values. Some groups around CMH Road have been agitated with BMRCL because of what they term BMRCL’s unethical tactics. They claim that BMRCL has been falsely telling individual property owners that their neighbours have agreed to surrender properties and therefore, these owners should also do the same.
Traders and tenants demands – the Shivshankar Bhat Committee Report
CMH Road traders are demanding that the Metro should be aligned along Old Madras Road via Adarsh Theatre. Their argue that there will be less displacement of small traders and that earlier government reports (in 1992 and 2002) had recommended Old Madras Road as the original alignment for the Metro. They say that the BMRCL will save between Rs.60-125 crores by using Old Madras Road, because there will be less twists and turns in building the Metro via Old Madras Road.
Pointing to the major bus terminal on Old Madras Road where passengers traveling from towns such as Hoskote, etc. alight, the say that a Metro terminal there will facilitate easier transit. Lastly, they say, more parking space will be available near the BDA Complex on Old Madras Road, whereas there is no space available on CMH Road and Indiranagar 100 Feet Road for developing parking facilities. However, the BMRCL insists that the Metro should be constructed along CMH Road because there will be 15 per cent more ridership on CMH Road given that it is a prime catchment area according to its surveys of ridership.
The Government of Karnataka constituted the Shivshankar Bhat Committee in November 2005 to adjudge the merits of the traders’ arguments to move the Metro to Old Madras Road. The committee recognised that the traders had a valid point. However, it expressed skepticism about moving the Metro to Old Madras Road due to the presence of the Ramakrishna Mission, a temple, a mosque and three graveyards on that road. The members of the committee felt that this would harm the religious sentiments of the followers. Besides, the army is not willing to give up defence lands around Old Madras Road.
The committee also pointed out that because Old Madras Road is a National Highway, the aligning of Metro there would come in the way of the traffic on the highway. But the committee also recognised that if the Metro was constructed on CMH Road, then traffic congestion on CMH Road would become worse.
Shops which are part of the CMH Road shops and establishment association are part of this litigation. Incidentally, KFC is not supporting the association. Pic: Zainab Bawa.
The committee eventually judged that "We cannot be influenced by the sole factor that a few residents and a few traders will be displaced. These observations are applicable whether the alignment is via Old Madras Road or CMH Road." It suggested building only one station at CMH Road instead of the original proposal of two stations, one at CMH Road and the other at Indiranagar 100 ft Road. The committee believes that this will mitigate the impact of land acquisition on the traders on CMH Road. The report of this committee is available on the BMRCL website.
Traders and their contribution to the city
Rajan has documented that CMH Road was not a planned area. It grew as a result of tenancy. Tenant-traders developed this area into a commercial hub. Some of the tenants and shop owners have pointed out that it is they who have made CMH Road what it is today. They therefore find it unfair that they are being displaced by the Metro.
Rajan says that both these areas – CMH Road and MKK Road – are vibrant economies of the city. Land acquisitions and construction of Metro around these areas will destroy the organic economies that have emerged in response to the city’s growth as well as the city’s location within the larger global economy. Similar issues were raised during the construction of the Delhi Metro that was constructed at the expense of local economies.
Matti Siemiatycki, a research fellow in Urban Studies at the University of Glasgow, who studied the Delhi Metro, says that the DMRC is not making money from ridership. The bulk of its revenues are generated through property speculation and lease of properties to MNC retail and franchise chains at the Metro stations. Siemiatycki has conducted a detailed analysis of the Delhi Metro system and the DMRC. His analyses are widely available on the Web.
Siemiatycki notes that the DMRC has become a large property owning body rather than a company running the Metro. Is this what the BMRCL also envisions for itself? Only time will tell. The larger question this raises is: Are shopping malls and large retail firms the only form of economy that our planners, bureaucrats and politicians envisage for Indian cities? If this is so, how do they plan to guarantee access to people of all income-scales to run shops and businesses in such economies that are highly capital intensive and based on speculative land values?
From a writ petition to a a PIL
Traders have other worries too. In the hearings prior to 18th February, Justice Anand Byrappa was presiding, and he was also a resident of Indiranagar. They feel he recognised the merits of their arguments, including the long-term impact of the vibrations that will result from the elevated metro rail system.
However, the hearings from 18 February onwards have been presided over by a judge K L Manjunath. At the High Court on 26 February, because of the nature of their arguments to change the alignment of the metro, Judge Manjunath ruled that the traders’ plea should be admitted as Public Interest Litigation (PIL) and not as a writ petition. The traders have since withdrew their case and have admitted a PIL. The High Court has allowed BMRCL to proceed with the work and set the next hearing for 10 March. The fate of both the traders and BMRCL now seems to hang on the outcome of the PIL. ⊕