With the Karnataka Government keen on several development projects in districts neighbouring Bengaluru, increased compensation for land to set up a large Integrated Solid Waste Management (ISWM) unit in the outskirts of Bengaluru has come under scrutiny. The Finance Department (FD) has warned that granting compensation above the price determined for the land would compromise the government’s pricing mechanism for land acquisition and lead to “a flood of proposals” from all departments where owners refuse the rate fixed by the government.
The FD note, accessed by The Indian Express, was in connection with a Cabinet decision last Thursday that approved an 11 per cent increase in compensation for 60 acres of land to be acquired from a private company. In May this year, the government proposed an ISWM in the Bengaluru Rural district and agreed to acquire 134 acres and 10 guntas of land for the same.
Of the identified plot, 46 acres were government land, 60 acres were owned by one Terra Firma Biotechnologies Ltd, and the remaining 28 acres of land were of different parties. Subsequently, the erstwhile Bruhat Bengaluru Mahanagara Palike (BBMP) wrote to the Bengaluru Rural deputy commissioner seeking a transfer of 88 acres of land under the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
The Price Determining Committee set the per-acre price of land at Rs 1.35 crore, with additional rates for trees and other assets. However, Terra Firma wrote to the government in October, saying they would forgo the land if the compensation was enhanced to Rs 1.57 crore per acre.
With the Bellahalli landfill near Bengaluru expected to become full in a year, the government pushed to acquire the land, citing that a solid waste management unit was operational at the site from 2008 to 2016. The Bengaluru Solid Waste Management Limited argued that considering the “intangible benefits” of acquiring the land and “since it was a fit place for solid waste management”, the cost of the land could be considered more than Rs 1.35 per acre.
The Finance Department, however, did not agree to it, noting that the proposal for increased compensation “explicitly overrides the official Price Determining Committee’s rate of Rs 1.35 cr/acre determined under the 2013 Land Acquisition Act. This undermines the established legal and valuation process.”
It said that the justification for the hike relied heavily on “intangible benefits” – such as existing infrastructure and social acceptability for an IWSM at the spot – which were neither quantifiable nor standardised under any financial rule. “The negotiated rate of Rs 1.50 cr/acre may become the new minimum benchmark for any land transaction in the entire Bengaluru Rural District, regardless of actual site conditions, effectively inflating public spending on all future projects,” it said.
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Moreover, the “government’s pricing mechanism will be compromised, leading to a flood of proposals from all departments where owners simply refuse the official rate, citing the Terra Firma precedent,” the Finance Department added.