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Thursday, March 25, 1999

Tatas snub Ananth Kumar, rule out revival of Bangalore airport project 

Aparna Kalra  
New Delhi, Mar 24: The Tata group has ruled out revival of the Bangalore airport project. "The airport project is dead. Also, the Tata-led consortium does not exist any more. So there is no question of reviving the project" a senior Tata official told The Financial Express.

The Tata official was reacting to civil aviation minister Ananth Kumar's statement in some national dailies that the Tatas have been given a month's time to revive the project.

"The question of a month's notice does not arise. There is nothing in writing and we do not intend to involve ourselves with mere statements," said the Tata official.

The civil aviation minister was further reported to have said that the Union Government had given a green signal to the Tatas by accepting all concessions and conditionalities for making the airport a commercially viable project.

The Tatas said that they are not aware of any new letter written by the Karnataka government to Tata group chairman Ratan Tata conveying the Centre's assuranceson tariff rates and the status of the existing Hindustan Aeronautics Ltd (HAL) airport in Bangalore.

"We withdrew from the Bangalore airport project on June 25 last year and do not intend to go back on that decision," the Tata official said.

A press release from Tata Industries added that "unilateral changes to the basic parametres of the project had eroded the project's viability".

The Tatas also refuted the minister's statement attributing delay in execution of Bangalore's new airport to the Tatas.

The Rs 3,900 crore proposed airport project, the first greenfield airport project to come-up with private investment, was dogged by controversy since its inception.

The Tatas axed the project last year accusing the Centre of backtracking on crucial pre-conditions specified in the memorandum of understanding (MoU) signed between the Centre, the Karnataka government and the Tatas.

The MoU had said that the Tatas will be permitted to levy its own tariffs levels for the new airport. Also, the existing HALairport will be limited to handling short-haul traffic.

The Centre later went back on the conditions, the Tatas alleged.

After withdrawing from the project, the Tatas had conducted a feasibility study along with the Karnataka government last year.

The results of the feasibility study, which was completed in December, indicated that the project was no longer commercially viable.

The Tatas had then disbanded the consortium which had bid for the project. The consortium included the US-based Raytheon company and Changi Airports Authority, besides the Tata group. The consortium had proposed to invest Rs 3,900 crore in the project in two phases. It had agreed to give a 10 per cent equity to the Centre and a 26 per cent equity to the government of Karnataka.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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