Murthy quits as Bangalore airport boss

Public-private partnership may suffer.

NR Narayana Murthy has quit as chairman of Bangalore International Airport Limited (BIAL), dealing a severe blow to potential infrastructure development in India's silicon valley. His move may also adversely impact the process of public-private partnership for which Karnataka has become famous.

Murthy, the chairman and chief mentor of Infosys Technologies, quit the post today after HD Deve Gowda, Janata Dal (S) leader and former prime minister, accused him of making little contribution to the Bangalore airport project.

Murthy had been appointed head of the BIAL board by former Chief Minister SM Krishna, a Congress leader, in order to get the much-delayed project moving. Deve Gowda is at loggerheads with Krishna and is seeking to question his record when he was the chief minister.

In a hard-hitting letter to Karnataka Chief Minister Dharam Singh, Murthy said, "The media reports of October 17, 2005 refer to your coalition partner Deve Gowda speaking to the press about the lack of my contribution to the Bangalore International Airport Limited during the last five years. I wish he had asked me personally before going to the press, or talked to you or ascertained it from members of the board. I am disappointed that a former prime minister did not accord me this basic courtesy."

He went to add, "I am pained, more so, that leaders in the government like you did not even clarify my role in the company and the work that has been done. I have spent enormous amounts of time and energy in interacting with the government in New Delhi and the government here to make this work. The records prove themselves."

Murthy had played a strong facilitating role in getting the airport project to clear the final hurdles and achieve financial closure.

The construction work for the prestigious Rs 1,300-crore project has already started. The project is being showcased by the state government as one of its achievements on the infrastructure front.

Industry leaders from across the state reacted sharply to the resignation, stating this would have a negative impact on the public-private partnership model.

Kiran Mazumdar Shaw, CMD, Biocon, who also plays an active role in the development of Karnataka, said, 'It is a sad development that people like Mr Murthy quit such positions. It will send out wrong signals and other people will be reluctant to take up such initiatives like he had done. The politicisation of the issue of infrastructure should not have happened and efforts should have focused on development.'

She added that the public-private partnership model in the state was healthy and this development would have a negative impact on it.

'People like Mr Murthy and I have spent an enormous amount of time in building up processes for PPP in the state. Obviously, Mr Murthy is pretty hurt to have taken such a decision. He is a respectable man and it should not have happened.'

Anant Koppar, chairman, Bangalore Chamber of Industry and Commerce, said, 'It is an unfortunate event to have happened in the PPP model here. The people's faith that the PPP will enhance the present and future infrastructure and service obligations of the state will be shaken. This will delay the progress of the international airport project.'

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His public role

At the height of the controversy surrounding the IIMs last year, Murthy was among a handful of Indian corporate bosses who stood up to the HRD ministry's decision to slash fees at the institutes.

Murthy called off the infotech industry's boycott of Asia's premier technology event, the BangaloreIT, in October 2005 after the Karnataka government assured him that infrastructure concerns in the city would be addressed.

Murthy has now quit the chairmanship of Bangalore International Airport Ltd after former Prime Minister HD Deve Gowda accused him of lack of contribution to the airport project

The airport story

May 1999: MoU for the project signed
Aug 1999: Global tenders floated
June 2001: Consortium of Siemens, Unique Zurich and Larsen & Toubro chosen as strategic joint venture partners
Jan 2002: Shareholders agreement executed.
June 2004: Cabinet approves the concession agreement
June 2005: Bangalore International Airport Ltd achieves financial closure
Mar 2008: Target opening date of the airport