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This is an archive article published on March 11, 2008

BIAL ignores ministry, wants airport to take off on time

As the Bengaluru International Airport, one of the first greenfield airports to be developed under public private partnership in the country...

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As the Bengaluru International Airport, one of the first greenfield airports to be developed under public private partnership in the country, navigates towards a formal opening, a few pitfalls may be lurking on account of uncharted contractual territory in Indian civil aviation history.

Under the concession agreement signed for the project on July 5, 2004, between the Ministry of Civil Aviation and Bangalore International Airport Ltd (BIAL), the latter is bound to complete the project in 33 months. Project implementation began on July 2, 2005, and the 33-month deadline for completion of the project falls on April 2, 2008.

With the ministry indicating a possible delay of a couple of weeks in the opening of the new airport, following a series of meetings to evaluate the readiness of the project, there are fears in the Karnataka Government — which is a partner in the project — that BIAL may invoke a ‘force majeur’ clause to suspend their obligation to complete the project on time.

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While Civil Aviation Ministry officials on Monday suggested a possible delay in the scheduled March 30 opening of the new airport, BIAL on Tuesday stated on record that Bengaluru International Airport would be inaugurated on March 28 and open on March 30.

“We have not received any information validating newspaper reports,” BIAL CEO Albert Brunner said in a written statement responding to reports that the Civil Aviation Ministry could push the date of opening back by a few weeks.

Following an inspection of the airport on March 7, the ministry and the DGCA raised nearly 54 points of concern connected to air traffic control and other issues.

Karnataka Chief Secretary Sudhakar Rao has said that the issue of readiness of the air traffic control tower is one of the key outstanding issues. Sources said other long-term issues pertain to the site of the runway for phase two and the width of the runway.

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Whenever asked about the opening by the end of March, the BIAL CEO has consistently stated that they were ready. At the final public trial on March 7, however, he said: “The ATC tower is the responsibility of the Airports Authority of India.”

Ministry sources, however, said they were not dictating a date for opening. “There are some technical issues that have to be resolved and this will take about a week. No official decision has been made as yet on postponing the opening.”

With reference to BIAL invoking force majeur in case of delays, the sources said it would be unlikely since the concession agreement provides for a remedy period and any delays would only be in the interest of the airport and its overall safety rather than any extraneous reasons.

“We have worked together for four years. We are committed to our contractual obligations. There will be no reason for adverse reactions,” a ministry official said.

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BIAL is bound to pay the Government of India Rs 1 lakh for every day of delay in completing the project beyond the stipulated 39 months (including six months of grace).

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