Dharam blames promoters for airport delay

Airport plan set for takeoff

Chief Minister Dharam Singh said the government has made it clear to the promoters that no sales tax exemption can be given.
Deccan Herald

Former Prime Minister Atal Behari Vajpayee ‘e-naugurated’ it nearly three years ago. Former Chief Minister S M Krishna performed the “ground-breaking” ceremony (guddali puja) this January. Now, in January 2005, Chief Minister N Dharam Singh will inaugurate the project once again.

The Rs 1,334-crore international airport project will be given a “final clearance” on December 21 and its execution will be “re-inaugurated” by the second week of January, Chief Minister N Dharam Singh announced on Tuesday.

Briefing reporters after a meeting with representatives of all the stake-holders of Bangalore International Airport Ltd (BIAL), Mr Singh said “minor hiccups” that had come up after the concession agreement was approved by the Centre had delayed the State’s approval. These mainly related to cost escalation of the project and sales tax exemptions given to it. “We have told the promoters that no sales tax exemption (originally accorded to BIAL to the tune of Rs 30 crore) can be given. Exemption cannot be given purely because value-added tax will be introduced from the next year. There is no question of tax concessions,” said Mr Singh.

BIAL blamed
Asked about the five-month delay by the coalition government in giving a green signal to the project, Mr Singh calmly blamed it on BIAL. “It’s because the members of the BIAL consortium and Board of Directors have come to meet the government only now — six months after the government was formed!” he said, adding the government was “treading carefully” as it was accountable to Vidhana Soudha and the people. As Deputy Chief Minister Siddaramaiah will be in Dubai between December 16 and 20, “the full Cabinet will meet on December 21 to give the final clearance,” said Infrastructure Minister P G R Sindhia.

Mr Sindhia told reporters that the government had raised some doubts on various issues but these were “clarified by BIAL on Tuesday”. The BIAL Board of Directors is set to meet on Wednesday to consider the explanations sought by the government on cost escalation. The project, pegged to cost Rs 1,150 crore in 2001, is now estimated at Rs 1,334 crore.

The government has also made it clear that when the land lease agreement is signed for airport operations in Devanahalli, the lease rent will be fixed at a concessional rate. However, higher lease rent is payable for non-airport activities on the same 4,000-plus acre premises.

Meanwhile, the Karnataka Government has sought financial support from the National Fund for Airport Development for developing the proposed Bangalore International Airport, Parliament was informed on Tuesday.

BONE OF CONTENTION
Cost factors
Bangalore, dhns: Chief Minister Dharam Singh said explanations were sought from BIAL on three major cost factors
*Escalation in development cost from Rs 15 crore to Rs 63.6 crore
*Increase in legal fees from Rs 7 crore to Rs 17 crore
*Escalation in pre-operational or trial costs