The Hindu Business Line : Ministry clears Bangalore airport project — BIAL seeks review of draft version of concession pact

THE good news on the Bangalore international airport is that the Ministry of Defence has given the green signal. But agony and uncertainty do not seem to leave the Greenfield private-promoted project alone.

The Cabinet-approved draft version of the concession agreement has also finally come. But Bangalore International Airport Ltd (BIAL) has asked the Ministry of Civil Aviation to review the wording of some of the crucial clauses, its CEO, Mr Albert Brunner, told Business Line.

He said the document is ambiguous in many places and on at least six vital issues - including the closure of the Hindustan Aeronautics Ltd (HAL) airport, which was the main precondition at the time of bidding. BIAL has sought the corrections as the ambiguities may hit the business model of the Rs 1,300-crore project.

The company, Mr Brunner said, cannot go ahead on the basis of the present version as many changes have been made in the mother document.

The concession agreement is to be signed between BIAL and the Government of India. All other subsidiary agreements are hinged on it.

Mr Brunner said words such as "(the Government of India) will endeavour closure" of the existing HAL airport were not solid enough or in good faith, as the Union Cabinet had already approved the closure once the new airport at Devanahalli came up in three to four years' time. "This weakens the GoI's obligations significantly. We have sought firm confirmation on issues related to our tariffs. The agreement has to be a mutually acceptable. Without a proper one, there is no project."

Without giving details, he said BIAL has also sent to the Ministry the consolidated views of all its shareholders, which include Siemens, L&T and Unique Zurich Airport.

Meanwhile, the Defence Ministry had sent the promised no objection certificate (NOC) a few days ago. However, site clearance by the Director-General of Civil Aviation is due and has three conditions including the NOC, environmental clearance, both fulfilled; and the submission of the plans approved by the local body, Bangalore International Airport Area Planning Authority.

The EPC contract with local partner L&T has also been extended and re-negotiated after the Indian major wanted the cost increase of basic materials factored in. "I cannot talk of the final cost impact on the project until we conclude the bank negotiations and all the contracts," Mr Brunner said.

Though every day's delay is a setback, a comforting thought, he said, is that the increasing passenger traffic at Bangalore will also reflect on the revenues when the project is commissioned 33 months from the start.

More Stories on : Infrastructure | Airlines | Karnataka

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Air Sahara to fly Bangalore-Colombo daily

Govt likely to extend open sky policy by a month

Ministry clears Bangalore airport project — BIAL seeks review of draft version of concession pact

Ship owners decline to cut handling charges

Maersk-Concor bid for JNPT box terminal cleared

Charting a new course

Mercator wins MRPL deal for 2nd year in a row

National training institute for Rly accounts in AP

Box trailers posing risk in Chennai