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Govt plan to turn Vikrant into museum runs aground

That is almost the state government’s estimated total project cost in 2010.

Written by Kavitha Iyer | Mumbai |
October 19, 2011 1:00:49 am

The state government’s ambitious plan to turn decommissioned aircraft carrier Vikrant into a national maritime museum,riding on the ship’s immense emotive value for her role in the 1971 war has,once again,hit a dead end.

While one of the two bidders in the fray for the public-private partnership project opted out at the penultimate stage,the solitary bid by Ackruti City projected a steep viability gap fund (VGF) of Rs 500 crore. That is almost the state government’s estimated total project cost in 2010. Officials said there could be no justification for the government to undertake a PPP project involving such a large grant.

An earlier round of bidding had ended in April 2010 with a no-show by five private developers after the government decided not to extend the last dates for bid submission.

The reason for the latest debacle,revealed officials,is that the government deleted a key revenue stream at the stage when the bids were already in and were in the technical evaluation stage. “Helicopter services,including joyrides — a key component of the state’s feasibility analysis for the project — had to be removed from the project design even though the final two bids were in. The decision was at the insistence of the Navy that chopper operations could not be permitted from the flight deck of Vikrant,” said a senior government official.

One of the two bidders was Aamby Valley,which had participated aggressively as its parent company, the Sahara group,having exited from the airline business,was keen to use its existing aviation industry assets,including helicopters. It was also keen to forge a chopper route to Aamby Valley from South Mumbai for owners of chalets and luxury holiday homes there.

Though the committee overseeing the design of the project and the bid documents included a Naval representative,the Indian Navy reportedly took the stand that helicopter operations could not be permitted — they would clash with operations from INS Shikra,the Navy’s nearby helicopter base. While officials courted the idea of instead offering the museum’s visitors chopper rides from Shikra,the idea had to be abandoned too as a seaside entry into Shikra was considered a security hazard and the option of resettling large slums to permit entry from another end was deemed unfeasible.

With helicopter operations ruled out,Aamby Valley expectedly opted out.

“The idea was that the commercial segments would cross-subsidise the cost of grouting the ship at Oyster Rock,stabilising her,etc. The VGF was to have provided for any further gap in the cost of basic works,that gap can hardly be Rs 500 crore,” said the official.

While the government is yet to take a formal decision on Ackruti’s bid,officials said it cannot be accepted at the current VGF. Re-tendering may be an option,but without revenue from helicopter operations,the state government’s own feasibility study will have to be overhauled.

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