Thursday, February 17, 2005

Karnataka’s firmness may increase Devenahalli cost

Karnataka’s firmness may increase Devenahalli cost
Financial Express

BANGALORE, FEB 16: Karnataka government’s withdrawal of sales tax exemptions for the international airport project at Devenahalli could take its toll on the cost of the project. A sales tax exemption of Rs 30 crore that was earlier promised by the state government for the project was withdrawn by the state Cabinet in January.

According to sources in the nodal agency for the Bangalore International Airport Ltd (BIAL) project, negotiations are on for the renewal of the EPC contract, between BIAL and the project contractors L&T and Siemens. However, BIAL declined to divulge details on the revision of the EPC contract.

The EPC contract, which is currently valued at Rs 823 crore, had lapsed twice earlier, as the project formalities got delayed while awaiting state and Central government approvals.

BIAL CEO Albert Brunner told FE that the financial closure of the project would be achieved by the end of March. He said, “The EPC contract is one of the many points that we will have to conclude, before we achieve financial closure.”

Meanwhile, BIAL is aiming to finalise all other agreements related to the project by end of February.


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