The Rs 1,500-crore greenfield international airport at Bangalore has hit a roadblock with tough concessions being demanded by Bangalore International Airport Ltd (BIAL).
The Siemens-led consortium and Karnataka State Industrial Investment & Development Corporation, which have promoted the new airport have sought levy of a development surcharge on passengers embarking at the existing airport and exclusion of the new airport from the direct purview of the Airports Authority of India Ltd (AAI).
The concession agreement has to be in place for the achievement of financial closure and for construction work to commence by December 2002 as originally planned, aviation ministry sources said.
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The concessions asked for by BIAL and the Siemens-L&T-Unique Zurich Airport consortium call for an amendment to the AAI Act 1994 for keeping the new airport out of AAI's purview. This being the first instance of a private airport project in India, the ministry's decision is significant since it would set a precedence for all private sector airport projects in the country. Interestingly, AAI is the third promoter in BIAL.
Besides this, BIAL has asked for permission to charge an airport development fee (ADF) from passengers embarking at the existing airport at Bangalore which would be used to fund partly the construction of the new airport. The promoters have also said that no airport should be allowed within a 150 km radius of the new airport to ensure retention of traffic.
The concession agreement has to also incorporate take over clauses in case of termination of the joint venture. Ministry officials said that talks were on to sort the concession agreement tangle. The ministry of civil aviation has already held 2-3 rounds of talks on this issue.
The shareholders in BIAL include KSIIDC, which holds 13 per cent equity, AAI another 13 per cent and the balance being held by the Siemens consortium. The consortium comprises Siemens Project Ventures GmbH of Germany, which has 40 per cent stake, while Larsen & Toubro and Unique Zurich Airport hold 17 per cent each.
The Bangalore airport in the first phase would cater to four million passengers, including one million international travellers. It would handle about one lakh tonne of cargo. The existing Hindustan Aeronautical Ltd (HAL) airport in Bangalore caters to 2.5 million passengers and 25,000 tonne of cargo. Once the new airport is ready, the existing one would be used by HAL and for VVIP travel.