HMRDA was always just an excuse, not a constraint. The corporation has representatives from the Railways and the State government sitting in the board of directors, and the state/center/Railways are majority stake-holders. Getting approvals wasn't a problem of power, rather, it was choice.
The agreement stipulated that a number of services equal to that before gauge conversion could be run freely, and any more would only need SWR to pay access charges.
The agreement was just used as a face to hide whatever was going on in the background. With the lucrative...
more... bus traffic from Interior Karnataka to the coast, there is no need to guess what that 'background reason' was.