The Hindu : Karnataka / Bangalore News : All clear now for new Bangalore airport

Online edition of India's National Newspaper
Wednesday, Jun 16, 2004

Karnataka

Karnataka - Bangalore

All clear now for new Bangalore airport

By Our Special Correspondent

NEW DELHI, JUNE 15. The Union Cabinet today approved some minor modifications in the concession agreement to be signed by Bangalore International Airport Limited (BIAL) and the Government, paving the way for the long-awaited Rs. 1,300-crore greenfield airport to take shape near Bangalore.

The National Democratic Alliance government on January 20 approved the draft concession agreement for the setting up of the international airport at Devanahalli under a joint venture arrangement with private participation.

To facilitate the early signing of the concession agreement, the Minister for Civil Aviation had been authorised to incorporate any drafting changes in the approved agreement in consultation with the Ministries of Finance and Law, official sources said. Earlier, a working group, constituted by the Prime Minister's Office with representatives from the Ministry of Civil Aviation and others, evolved the draft concession agreement. BIAL and the Karnataka Government had sought certain clarifications with regard to the draft. The modifications in phrasing were proposed by the Ministry of Civil Aviation, and the Cabinet approved these changes today.

BIAL, being promoted by a private consortium comprising Siemens, L&T and Unique Zurich Airport, sought the modifications as it considered the draft to be ambiguous in some places and on at least half a dozen vital issues, including the closure of the existing Hindustan Aeronautics Limited (HAL) Airport in Bangalore. The new airport is likely to be completed in 33 months, according to the draft agreement. It has a clause to impose a penalty in case the airport is not commissioned on time.

A long haul

K. Satyamurty reports from Bangalore:

It is almost two years after work was to begin, more than five years after the proposal took shape, and a decade after it was mooted that the project seems set to take off.

The last revised estimates made in March 2004 indicated that the airport, to be located 35 km from the city centre, would cost Rs. 1,200 crores. The Karnataka Government and the Airports Authority of India will hold a 13 per cent share each in BIAL, whose chairman is N.R. Narayana Murthy, the chief mentor and chairman of Infosys Technologies. Albert Brrunner of Siemens is the chief executive officer. ICICI (Industrial Credit and Investment Corporation of India) is the lead arranger for finance.

One of the last technical snags the project faced was solved in January when the then Defence Minister, George Fernandes, directed the relocation of the Indian Air Force (IAF) base in Kolar to a site to be provided by the State Government. Mr. Fernandes asked HAL to issue a no-objection certificate to enable BIAL to conclude an Integrated Airspace Management Agreement for the airport. The airspace of the IAF's Kolar base had clashed with that of the proposed airport.

On January 29, the then Chief Minister, S.M. Krishna, launched the on-site work at Devanahalli, indicating that civil works would start soon. The 1,680 hectares of land required for the runways, the terminal and other infrastructure, was acquired more than two years ago. Hurdles in land acquisition and relocation of three villages and as many temples were overcome.

The airport project faced delays right from the start. Even after finding the right backers and clearing the initial proposal of the Siemens-led consortium, the financial closure part hung in the balance owing to cost escalation.

At one stage, BIAL wanted to renegotiate the project with the consortium because of cost escalation following the increase in steel and cement prices by 40 per cent. BIAL also pointed out then that each month of delay could push up the project cost by almost Rs. 1.11 crore.

The airport is expected to serve 40 lakh passengers annually, 10 lakh of them international travellers. It will also handle 1.3 lakh tonnes of cargo. It will be able to manage up to 20 international flights a day initially. The HAL Airport cannot handle more than nine passenger flights at a time and is straining to cope with the international flights operated by eight airlines now.

In order to facilitate access to the airport, the Bangalore Mahanagara Palike will build a six-lane expressway up to Mehkri Circle in the city. The rest of the route is part of the Golden Quadrilateral Project.

The railways will lay a line up to the terminal. Train services are planned in tandem with flight departures and arrivals. The airport will help the proposed electronics hardware park and garment industry park coming up in the vicinity.

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