The Bangalore airport project, due to be cleared by Cabinet this week, has been designated as a joint venture cum a build, own and operate (BOO) in perpetuity project, according to sources.
A Cabinet note seeking clearance to set up a Rs 1213 crore airport on 3500 acre in Bangalore does not specify whether the land for the project will be given on lease or not. The note does not mention any lease rentals. It leaves the land issue to be settled between the Tatas and the state government.
According to sources, the total project cost is expected to be about Rs 2500 crore spread over 15 years, subsequent clearances to be taken up at later stages.
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According to sources, the Tatas will hold 26 per cent stake in the project, with Raytheon holding around 24.5 per cent and the Singapore consortium holding another 24.5 per cent. The Karnataka government is expected to hold around 6 per cent of the equity. Sources said the Karnataka government had recently refused to give cash for its 6 per cent equity and was likely to contribute by way of land. The Airport Authority of India (AAI) is to hold around 10 per cent stake in the project. It is not clear how and in what form will this stake be contributed as technical assistance or in cash.
Sources explained that to start with, the Bangalore airport project was to be a build, own and operate project which was changed to a build, own, operate and transfer project on the insistence of Union minister for civil aviation C M Ibrahim. It has now been designated as joint venture and a build, own and operate project in perpetuity.
The Cabinet note has also not taken any view of the controversial issue of the HAL airport in Bangalore, said HAL sources. The two options of closing it down or allowing it for passenger traffic have been left open for the Cabinet to decide. Sources in HAL, however, pointed out that it will not be easy for the government to shut it down, since airspace in the region is controlled by HAL.
The aviation ministry is in favour of closing down the airport or allowing only 50 seaters to land there, which would in effect mean closing down the airport for passenger traffic, since hardly any 50 seaters operate in the country and a negligible number of those operating land in Bangalore.
Sources said the government was keen to clear this project since it is a major decision and can be done before the elections. The aviation ministry has been under pressure from the prime ministers office to clear this project soon. However, sources said clearing the project may not be easy, especially when controversial issues like closure of existing airport/facilities is involved.