Airport projects in four cities in limbo as promoters back out

Airport projects in four cities in limbo as promoters back out

The construction of greenfield airports in Bijapur, Bellary, Gulbarga and Shimoga — undertaken by the State government on public private partnership (PPP) — has run into problems.

While the promoter of Bijapur and Bellary airports — MARG, a Chennai-based firm — has decided to walk out of the project, the construction of Gulbarga and Shimoga airports has stopped because of bickerings among the promoters, official sources said.

MARG, Deccan Herald has learnt, recently told the government that it wants to pull out of the project, saying it’s “not viable”. The promoter claimed that the project site (about 11 km from Bijapur town) was “undulated” and unsuitable for airport development. It requires a lot of cutting and blasting works that may incur huge costs. The firm had taken the physical possession of 727 acres identified for the project and set up a site office. The project is estimated to cost Rs 200 crore.

MARG signed the Project Development Agreement (PDA) with the government for the airport’s construction in January 2010. It was to begin construction after signing the land lease agreement. It, however, failed to do so despite numerous reminders from the IDD, officials added.

As for Bellary airport, its fate was sealed long ago when the Karnataka High Court ordered denotification of several patches of land (a total of 250 acres) acquired for the project last year. Land has been denotified in such a way that it is impossible to build the runway. On its part, the government did not make much effort to get the project going. The project was to cost about Rs 110 crore.

Serious disputes pertaining to financial mismanagement, it is learnt, cropped up between the shareholders of Gulbarga Airport Development Ltd (GADL), causing delay in implementing the project. Regional Airport-Holdings International Ltd and IL&FS are the shareholders.

At a recent meeting convened by the IDD principal secretary, Rajkumar Khatri, the shareholders blamed each other for the delay in completing the project and traded allegations of fraud, financial impropriety and non-infusion of the assured equity for the project.

This newspaper has a copy of the proceedings of the meeting. Khatri warned them of strict action under PDA if the project was delayed further. The promoters are learnt to have later assured the IDD of taking necessary steps to complete the project.

Almost 80 per cent work at Gulbarga airport has been completed. The GADL now has to construct only the terminal building and undertake some minor works.

As far as the Shimoga airport is concerned, the project has run into technical problems. The Airport Authority of India (AAI) has refused to give permission for building the runway as there are large number of smoke-emitting chimneys in the adjacent industrial area. There is a hillock next to the area, making it impossible to change the direction of the runway, officials said.

It has now been proposed to give a longitudinal slope to the runway so that aircrafts do not come in contact with smoke. But the government is yet to a final decision in this regard, officials said.

Both the Gulbarga and the Shimoga airports should have been commissioned in April 2012. When contacted, Khatri declined to comment.

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