State’s infrastructure budget down as projects languish

Karnataka’s infrastructure budget has hit a 10-year low with the government still chasing pending projects, without announcing any new ventures in the airports, railways or public-private partnership (PPP) sectors.

With a budget of Rs 516 crore this fiscal, the Infrastructure Development Department (IDD) is preoccupied with old projects. These include long-pending development of minor airports at Vijayapura, Hassan, Ballari and Shivamogga.

Also, another big-ticket project - the Bengaluru Signature Business Park in Devanahalli near the airport - is sitting with just its master plan ready.

The IDD plays a key role in developing infrastructure on PPP modes, airports/airstrips and coordinating with the railways for various projects. “The outlay we have is just one-eighth of what we had sought,” IDD Principal Secretary Kapil Mohan told DH. “And with what we have, we cannot take up land acquisition for projects.”

Currently, Mohan said, the IDD is focussing on executing the Bengaluru suburban rail project for Bengaluru through the Bangalore Integrated Rail Infrastructure Development Enterprises Limited (B-RIDE), a special purpose vehicle.

It was only recently that the government completed works on the greenfield Kalaburagi airport, which now awaits formal inauguration by Prime Minister Narendra Modi.

Other airport projects are stuck at various stages. The Hassan airport, for instance, should have been ready by September 2009, but the project is crawling after the government scrapped an agreement it had inked with Jupiter Aviation Pvt Ltd. The government has acquired 536 acres out of 761 acres for the project.

Similarly, for the Vijayapura airport, which goes back to 2010, the contract with a private firm was scrapped citing non-viability, especially after it was found that levelling of land will need Rs 100 crore.

At Ballari, 823 acres out of 900 acres have been acquired and the land lease deed is being finalised for signing. A “no-frills” airport at Shivamogga is still in the tendering process.

A big-ticket Bengaluru Signature Business Park, spread over 408 acres of land adjacent to the Kempegowda International Airport, is still sitting with just a master plan in place.

In order to assess suitability and feasibility of PPP projects, the government recently rejigged its list of transaction advisors. It has brought on board firms such as Ernst & Young, Deloitte, Grant Thornton, PricewaterhouseCoopers, Darashaw & Company among others to advise on projects costing up to Rs 500 crore and those between Rs 500 and Rs 1,500 crore.