Bangalore International Airport: All flights cancelled

Bangalore Airport
All flights cancelled

Business World

ABOUT two months ago, a visibly frustrated Herbert Meier, senior vice-president in charge of international business for Unique Airports, a member of the consortium bidding to develop the new Bangalore Airport, told an auditorium full of private infrastructure investors to think hard before investing in any project that has the
government as a stakeholder. Wonder what Meier thinks now. Karnataka has put the plans for the Bangalore International Airport (BIA) at Devanahalli in slow-motion.

"Bangalore is suffering at the hands of coalition politics," says a bureaucrat working in the city. The real reason, say insiders, is that H.D. Deve Gowda, the JDS leader, is working overtime to delay the project as he wants to have a say in it. He apparently wants to review all parameters of the project, including location!

This means that it will be delayed further. What is more, the engineering contract the airport has with Larsen & Toubro and Siemens expired in September and a revalidation of contract will mean cost escalation from the existing Rs 1,350 crore.

If Karnataka does not clear the hurdles of state support and land-lease pacts by the end of this year, the project will hit a dead end. And the only one who stands to gain from this is the Hyderabad private airport, which has signed all agreements and is waiting only for the concession deal to be signed by next month. It is going full-throttle and could get built first. If it does, it will take away bilateral agreements with airlines, making BIA a non-starter.

At least this should zap Karnataka into action and make it do something to stop coalition politics make a mess of a project that could put Bangalore in the big league.

Unfortunately, Karnataka doesn't seem to be taking all this seriously. Infrastructure minister P.G.R. Sindhia has been quoted as saying that the government hasn't been informed that consortia members are unhappy with the pace of work and that the government now wants to cut back the Rs 350-crore state support for the project to Rs 75 crore. Though the defence ministry has cleared the project and so has the state government, it is still to sign the 30-year land lease agreement.

With the three consortium partners - Siemens (40 per cent), L&T (17 per cent) and Unique Zurich Airport (17 per cent) - airing dissatisfaction, it's déjà vu for BIA. In 1998, the Tata-Raytheon-Changi Airport group had also pulled out citing "political and bureaucratic" delays.