SINGAPORE, May 7: The consortium of Singapore investors may pull out of the Rs 1400-crore Bangalore airport project as the civil aviation ministry has given clearance for build-operate-transfer (BOT) instead of the promised build-own-operate (BOO) basis.

Sources point out that they would `reconsider participation in the joint venture after studying the new terms.' The general perception is that the entire Singapore consortium, which has 24.5 per cent stake in the project, may move out from the venture since the government has reneged on the original agreement, allowing the plan on a build-operate-own (BOO) basis.

The consortium has already spent around Rs 2 crore on feasibility studies and other development expenses related to the project.

But, the feeling seems to be that if it goes through with the project on BOT terms, the entire effort could prove economically unviable and time-consuming, with nothing to show at the end of the day.

"It is just not cricket to change the rules of the game mid-way," says a source. Most investors put the blame squarely on the Indian bureaucrat. "He does not have the mindset of a businessman," they quip.

Parameshwara Holdings, which holds 10 per cent stake in the Singapore consortium, has already decided to call it day. Chairman of Singapore Airlines and Parameshwara S Dhanabalan confirmed the development.

The Sembawang group and RSP Architects/L & M group are the driving force in the consortium, with the former holding 20 per cent and the latter 35 per cent. Jurong Town Corporation's shareholding is another 20 per cent.

The Indian partner is the Tata group, which holds 26 per cent, with another 25 per cent coming from other Indian sources. American multinational Raytheon holds 24.5 per cent.

The Tatas have not yet apprised the Singapore partners about the new terms set by the civil aviation ministry.

The general feeling here is one of frustration and disappointment. "If India had gone ahead with the airport on a BOO basis, it would have set a world precedent and unleashed a multiplier effect in other metros," a source pointed out. This would have boosted revenue-generating sectors like tourism.

Another source, however, points out that the airport venture needed to go hand in hand with an open-skies policy if it is to have the desired impact.

Speculation is rife that Raytheon, too, will pull out, if the Singapore consortium decided to go ahead with the move.

The question doing the rounds is: how will the Tatas make up for the shortfall in capital?

It may be recalled that prime minister IK Gujral had, during his visit here last August as the external affairs minister, reassured his Singapore counterpart that roadblocks retarding the development of the Bangalore international airport had been eliminated. The project had been given the `in-principle' go-ahead. Only minor matters relating to charges, revenues, safety, security, grading and so on remained to be negotiated, he said.

That reassurance appears to have been premature, as the latest move by the civil aviation ministry seems to bear out.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.