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Cabinet's nod for international airport project

By Our Staff Reporter

BANGALORE, DEC. 21. Giving the quietus to the hurdles in the way of the Devanahalli international airport project taking off, the Cabinet today gave its final approval to the Rs. 1,334-crore green-field project.

Briefing presspersons after viewing a presentation on the airport project at the meeting of the Council of Ministers, the Chief Minister, N. Dharam Singh, flanked by all his Ministers, said the work will begin in February and the project will be completed in three years. The important decision was taken after prolonged deliberations in the Cabinet.

Senior ministers such as the Minister for Cooperation, R.V. Deshpande, and the Minister for Law and Parliamentary Affairs, H.K. Patil, spoke about the need for urgency in taking up the project.

A concession agreement was signed by the Centre, the State Government and Bangalore International Airport Ltd. (BIAL) in July.

Mr. Dharam Singh said an in-principle approval to the airport project was given at the last meeting of the Cabinet, but a final decision had been postponed as several Ministers wanted clarifications, which were discussed today.

State support

Giving details, the Minister for Large and Medium Industries, Small-Scale Industries and Infrastructure, P.G.R. Sindhia, said the Cabinet agreed to provide State support in terms of an interest-free soft loan of Rs. 350 crores repayable in 10 years by BIAL.

Mr. Sindhia said that an advantage the State Government gained today was that it decided to retain 427 acres of prime land and allocate only 4,050 acres for the airport.

The excess land would be vested with the Karnataka State Industrial Investment Development Corporation. The Cabinet refused to give any exemption in the payment of sales tax as demanded by BIAL. Thus the Government will save Rs. 30 crores.

The Minister said that as the project had been cleared, now the ball was in the court of the ICICI (Industrial Credit and Investment Corporation of India) Bank to go ahead with financial closure.

Out of the Rs. 350-crore soft loan the State Government was giving to BIAL, only Rs. 275 crores should be utilised and the company should keep the rest as a contingency fund. The Minister for Information, B. Shivaram, said the Cabinet had taken into consideration the escalation in cost by March 2005, while working out the actual cost of the project.

He contradicted Mr. Sindhia, and said the Cabinet halved the rate of interest on the Rs.350-crore loan to six per cent.

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