Financial Daily from THE HINDU group of publications
Saturday, Dec 14, 2002
Financial Daily from THE HINDU group of publications Saturday, Dec 14, 2002 |
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Logistics
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Infrastructure Bangalore Airport to seek local funding Abhrajit Gangopadhyay
BANGALORE, Dec. 13 THE Karnataka Government plans to tap domestic financial institutions to raise most of the Rs 1,150-crore in order to check further delay in the financial closure of the proposed Bangalore International Airport. One of the main reasons dissuading foreign investors is the absolute control of Airports Authority of India in the functioning of all airports in India and a bill seeking relaxation of AAI's controls is still pending before Parliament. Until the law is amended, AII will control all user charges, including airline charges. According to finance sources, the delay in signing Concessions Agreement could further drag the signing of the State support agreement with the AAI. "There is a concern that if the agreements are not in place, the FIs will be jittery about putting money", sources said. "Some concrete development in papers is needed to convince us to commit funds", they added. "If the Government want us to fund the project, it should also give us some comfort in forms of these pacts", a top official of leading domestic lending institution said. However, according to Government sources, the State is likely to guarantee part of the debt to be raised from domestic financial institutions for the proposed airport project, even as the project stumbles to secure financial closure. The project already tripped the initial financial closure deadline scheduled in September. Under the current proposal, the State Government will invest Rs 375 crore, picking up 32.6 per cent in the project, domestic financial institutions are expected to commit Rs 379.5 crore as debts in lieu of 33 per cent stake. The three-member private promoters — Siemens venture, Larsen & Turbo and Zurich Airport will invest Rs 51.42 crore as equity funding. The Airports Authority of India will contribute 13 per cent equity in the proposed International Airport and will be the main consultant for the multi-crore project.
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