The Hindu : Sport / Racing : Motor : Sports Ministry rejects JPSK Sports’ request

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Sport - Racing : Motor

Sports Ministry rejects JPSK Sports’ request

Special Correspondent

NEW DELHI: The Union Sports Ministry has rejected a request from JPSK Sports for release of foreign exchange worth $36.5 million as licence fee to the UK-based Formula One Administration (FOA) Ltd.

After the Indian Olympic Association (IOA) initiated the proposal with Formula One chief Bernie Ecclestone in June, 2007, to conduct a round of Formula One championship in India, it was the JPSK Sports Pvt. Ltd. That signed a deal with Ecclestone in November, 2007.

Work on the track that is expected to host a Formula One race in 2011 is in progress in Greater Noida. Originally, the IOA had proposed 2009 for the inaugural event, and then it got shifted to 2010 and still later to 2011.

The JPSK Sports had approached the Sports Ministry last January for the release of foreign exchange after it was directed to the ministry by the Reserve Bank of India (RBI).

Unappealing

“The outflow of foreign exchange of around 30 to 40 million dollars for rights fee was not an appealing proposition. The project did not come under the provisions of the foreign exchange management act.

“It was not one where sporting excellence or development of sports was involved. This project is absolutely beyond the realm of the common man. We expressed our inability to consider it,” said a ministry spokesman on Tuesday.

The IOA’s involvement in a sport like the Formula One has been questionable right from the start. Recently, when it was revealed that the family of IOA President, Suresh Kalmadi, was involved in the company (JPSK Sports) that was floated in November, 2007, a few key office-bearers of the IOA issued a statement to claim that the IOA had actually backed out of the project in September, 2007.

With great fanfare, Mr. Kalmadi had announced India’s F1 project, under the IOA banner, in June 2007, brushing aside questions then about the capacity of the IOA to raise funds that would be required to just fulfil the conditions listed by FOA.

Premature end

“The facilitating role of IOA in bringing this prestigious event to India came to an end at a premature stage itself resulting in automatic termination of further communication on this issue with FOA by IOA in September, 2007. And, thereafter, IOA has had no further involvement in the matter,” said a statement issued by IOA Vice President, Tarlochan Singh, Joint Secretaries Lalit Bhanot and Harish Sharma and Treasurer, A.K. Mattoo, on August 22.

“We were never going to raise 35 or 36 million dollars as first year’s licence fee,” said an IOA official on Tuesday.

The IOA never announced in November, 2007, when the JP company signed the deal with FOA, that it was no longer in the race to host the event.

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