Panel wants 3 BIAL partners blacklisted

Panel wants 3 BIAL partners blacklisted


Under scrutiny

In its report tabled in the Assembly here on Monday, the committee said that Larsen & Toubro, Siemens and Unique Zurich Airport, private partners in BIAL, not be “considered for entrustment of any work by both the government or their agencies for a minimum period of five years”.

Apart from the poor qualilty of construction work, the committee pointed out that trading of shares for profit without showing an iota of concern for the general public, the arrangement of entrusting all airport work among private players in BIAL and the total apathy towards users’ needs as reasons for the blacklisting.

The committee did not spare key officials whose decisions in the project earlier led to the present state of affairs.

The panel indicated that the officials chose not to act despite knowing the companies had indulged in work that they considered to be below international standards.

In this context, the report mentions the names of Infosys chief mentor Narayana Murthy, who was BIAL chairman till 2005, and Rajiv Chandrasekhar, at present ABIDe convener, who was then Chairman and CEO BPL Innovations Business Group.

Other officials from the Ministry of Civil Aviation, Airports Authority of India and State Principal Secretaries to the Infrastructure Development Department and Commerce and Industries Department B K Das and B S Patil, respectively, have also been identified as those against whom appropriate action should be initiated.

“The committee is of the view that that the decisions taken at each stage (right from project approval to construction) were not in accordance with the expectation of a world class international airport” the reports said.

Speaking to reporters here after releasing the 100-page report, committee chairman D Hemachandra Sagar launched a tirade against the BIAL management, saying that the Centre and State had been taken for a ride by the promoters of the country’s first greenfield airport.

Sagar labelled the concession agreement as totally one-sided, claiming that it had serious lacunae that was exploited by BIAL’s private stakeholders.

Describing the new airport at Devanahalli to be anything other than world class, Sagar said: “The Committee has recommended that the Government constitute a high power technical committee to review deficiencies, apart from initiating stern and concerted action on BIAL and implement corrective/remedial measures immediately to achieve international standards.”

Branding BIAL to be below standard, Sagar said that the Centre should reopen the HAL airport in the City so that short-distance commercial flights could operate. Besides, Sagar said, the HAL airport would not insist on a user development fee (UDF).
Explaining that the government had invested Rs 100 crore in equity, incurred actual expenditure of Rs 282.55 crore on land and provided 4,009 acres for the airport project, Sagar said that the total public resources had aggregated to Rs 843.74 crore.

This apart, he informed that Rs 461.19 crore had been invested on roads, power and water and provided concessions, exemptions, waivers and incentives.

As against this, the private players had invested Rs 284.60 crore in equity. Sagar said that despite the government’s huge financial stake in the project, it does not have any control of BIAL’s management.

“The interest of the state has been compromised. It should not consider the release of any further funds to BIAL, till the committee’s recommendations are met and the amount of Rs 100.26 crore, following reduction of project cost, is refunded by BIAL,” Sagar said.
He elaborated further that the Rs 46 crore invested in 2005 fetched Rs 485 crore in 2009.
“This profit to the private player was possible solely because of the facilities extended by the Government. Hereafter, the State has to be more careful in executing PPP projects especially on lock-in period restrictions to retain the original project initiators for a period that would match the concession period. Remove the provision for an automatic renewal of the concession agreement after 30 years” added Dr Sagar.

The Committee, while expressing anguish at the state of affairs in the airport, including the unresponsive attitude of the management said a stage had been reached recommending the termination of contract.

“The Committee, however, keeping in view the larger interest of the state, restrained such a move. Therefore, the Committee advises the Government to be more careful in committing facilities at the huge cost of public without any controlling powers” the report findings noted.

The 21-member committee has also concluded in its report that it appears, sometimes the PPP model is not a boon, but a bane. “The oddly managed BIAL is a testimony to this. The promoters have come up with a patchy, non-scientific and thoughtless solution during implementation of the project and left the public high and dry” said Dr Sagar while reading out contents of the report. 

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