State Govt. all set to scuttle International Airport project

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State adopts aaraam approach for new airport
Our Support Amount Will Be Reworked: Sindhia
Delay Will Give Hyderabad Upper Hand: Experts

The Times of India

Bangalore: The Karnataka government has decided to take its own time in finalising agreements for the Bangalore International Airport (BIA) at Devanahalli, as financial implications for the state are “serious.’’ Infrastructure minister P.G.R. Sindhia told The Times of India here on Tuesday: Neither the state government nor the Bangalore International Airport Limited (BIAL) have been informed that consortia members are unhappy about the pace we have set. We cannot react to what has been said in the media. We want to rework the state support amount for the project and if somebody is unhappy about it, we cannot help it.’’

The clock, however, is ticking fast for the BIA: if Karnataka does not clear the twin hurdles of state support and land-lease agreements within this year, the project may just fall through. And yet again, Hyderabad will be the gainer, at the cost of the Silicon City. A BIA senior representative said: “The Hyderabad private airport has signed all agreements and is going full-steam. At this rate, it will be built first and take away bilateral agreements with airlines, making BIA redundant.’’

With all three consortium partners —Siemens, Larsen & Toubro and Unique Zurich Airport — openly airing dissatisfaction, the situation for BIA is deja vu: in 1998, the Tatas-Raytheon-Changi Airport consortium pulled out of the project citing political and bureaucratic’’ delays.

“The project is at an impasse, because the Karnataka government has reopened the issue of state support and is trying to push the amount down by Rs 75 crore.We have firmly said this cannot be renegotiated,’’ the consortium representative explained. There is severe time pressure on the project: the Unique Zurich airport has told their partners that they cannot take the running expenses of the project and will have to pull out, if it extends beyond March 2005. The time-frame being given now is: agreements to be signed by November, financial closure by December and full commencement of work by February. “If this is not met and our partner pulls out, the clock will go back to 2000,’’the representative warned.

Infrastructure secretary Vinay Kumar said he was confident the the December deadline would be met. “As per the concessions agreement,we have time till December for financial closure.We spoke to all the consortium partners and no one has indicated any problems. We are waiting for the concurrence of the finance department to go ahead,’’ he stated.