Karnataka Airport To Come Up Even If Tatas Opt Out

The Union civil aviation ministry would implement the controversial Rs 4,500-crore international airport project at Devanahalli, near Bangalore, if the Tata-led consortium refused to take it up on a build-operate-transfer (BOT) basis, civil aviation and information & broadcasting minister C M Ibrahim asserted yesterday. The consortium is interested in participating in the project through the build-operate-own route.

The minister insisted that the air traffic control and landing rights of the airport would rest exclusively with the government. Landing rights are the exclusive preserve of the Union government and can never be diluted, he thundered. Ibrahim also ruled out any shift in venue for the project.

 

A meeting has been convened in New Delhi on Wednesday to take a final decision on the project. According to Ibrahim, the meeting would be attended by the Tatas, along with their US collaborator Raytheon; Karnataka government officials; and Union civil aviation ministry officials, including officials from the Directorate-General of Civil Aviation and the International Airports Authority of India (IAAI).

The minister expressed the hope that the consortium would accept the changes proposed by him. When asked what would happen if the consortium refused to cooperate, he snapped: We will build the airport on our own. The IAAI could always take up the project, he added.

Asked about his recent meeting with Tata group chairman Ratan Tata, Ibrahim said: We discussed many things, including the Devanahalli project and the Tata-SIA project. The minister said the stalled proposal for setting up of a joint venture between the Tatas and Singapore Airlines could be considered provided the Tatas convinced their collaborator to settle for a stake of less than 40 per cent in the project.

Arguing that foreign airlines are not permitted to operate in domestic circuits anywhere in the world, Ibrahim said the government was ready to have foreign investment in domestic airlines if the investor did not own any airlines overseas. We do not mind foreign investment in the field, he said.

Ibrahim announced that the Union government has decided to consider airports as infrastructure projects to allow 100 per cent foreign investment provided the investor agrees to follow the BOT route. The operational period for various airports that may come up with private investment would depend on the level of investment, he said.

Ibrahim clarified that the same mechanism would be applicable to the Tata-led consortium if they agreed to go ahead with the Devanahalli project. We do not want the private party to make losses on their investment in building an airport, he said, adding, We will be willing to consider a 20 to 30 per cent return on their investment.

The minister pointed out that even a small state like Kerala had four international airports compared to none in Karnataka.

The people of Karnataka would not accept the non-implementation of at least one international airport project since both the Prime Minister and the Union civil aviation minister hail from the state, he said.

The minister also announced that the civil aviation ministry had decided to ask the IAAI and other concerned agencies for a techno-economic feasibility report on an airport in Shimoga, the native district of Karnataka chief minister J H Patel. We will take a decision once the report is prepared, he said.