Govt looks to AAI as pvt developers’ feuds stall regional airport projects

Plans to dump PPP model to revive floundering airport projects in Gulbarga,Shimoga,Bellary,Hassan,Bijapur

Written by Express News Service | Bangalore | Published:September 29, 2013 5:07 am

As efforts to build airports in five tier II cities hit roadblocks,the Karnataka government is planning to dump the PPP model in favour of a partnership with the Airports Authority of India.

This move has been necessitated because the proposed airports in Gulbarga,Shimoga,Bellary,Hassan and Bijapur,which were initiated by the previous BJP government,have been grounded up due to issues ranging from disputes between PPP partners and problems with land acquisition. About 35 per cent work on the airport in Shimoga is over while the one in Gulbarga is half-way through.

“We were expecting completion of Gulbarga airport by now,but we have been unable to convince consortium partners to settle their differences and complete the project. They are embroiled in a legal dispute,” an official at the Infrastructure Development Department,which is overseeing these projects,said.

Now that AAI has announced to develop 100 regional airports across India to boost domestic aviation,Karnataka wants to partner it to revive its floundering projects. That Hubli and Belgaum airports,which were funded by AAI to the tune of Rs 150 crore,are up and running has convinced the government that the AAI is a more reliable partner for airport development,IDD sources said.

The Gulbarga airport,being built at a cost of Rs 183 crore,was scheduled for completion last year.

The project was originally to be executed by a consortium of IL&FS Engineering and Construction,NCC Infrastructure Holdings and VIE India Project Development and Holding in agreement with IDD through a special purpose company called Gulbarga Airport Developers Pvt Ltd.

In 2010,however,Bangalore-based consortium RAHI,which comprises IL&FS Transportation Networks Limited and Comet Infra Developments Pvt Ltd,obtained a 22 per cent stake in the Gulbarga Airport Developers. This same consortium had taken up the Rs 120 crore Shimoga airport.

The shareholders of the consortium,however,are involved in a financial mismanagement dispute,as a result of which both projects have been stalled,despite the government’s efforts to expedite them,including through legal intervention.

“There is a thinking now in the government that it is better to partner with AAI than go in for the PPP model given the experience with these two projects,” the sources said.

That is not all. Karnataka’s minister for infrastructure Santhosh Lad has said developers of other five airports have withdrawn on account of “economic slowdown,financial inviability,land acquisition disputes,breach of agreements and internal differences among project developers”.

Gulbarga airport was expected to attract a sizable number of flyers who now use the Hyderabad airport to access the northern parts of Karnataka while Shimoga airport was pushed through by former chief minister B S Yeddyurappa who hails from this district,sources said.

Hassan and Bijapur airports have been stalled because private developers are demanding more land while the one at Bellary,once the pet project of local mining barons,has been hit by protests over acquisition of agricultural land.

In all,Karnataka currently has three operational regional airports in Mysore,Hubli and Belgaum,and two international airports in Bangalore and Mangalore.

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