Aviation ministry clears revised cabinet note on Tata-Raytheon project
Aparna Kalra
NEW DELHI, January 2: The civil aviation ministry has made substantial amendments to the cabinet note prepared by secretary MK Kaw on the Tata-Raytheon Bangalore airport project.In a rare occurrence, union minister CM Ibrahim and his ideological opponent and junior, minister of state Jayanthi Natarajan, joined hands to clear the revised cabinet note on Friday. Sources in the ministry said that Ibrahim and Natarajan felt that the original note was purposely vague and did not provide complete details to the cabinet. The two ministers had earlier put the brakes on the note despite pressure from the PMO to clear the project speedily. "The PMO made repeated enquiries on the project from the ministry," said sources. The note, as it reads now, spells out clearly that the Tata-Raytheon project will be a joint venture between the Tatas, state government and the Centre. Ministry sources said that the original cabinet note drafted by Kaw had stated that the Bangalore airport is a joint venture / build-own-operate
(BOO)project. The civil aviation ministry has all along been opposed to a build-own-operate format for the project. After a deadlock on this issue for nearly a year, the Tatas and the Centre reached a decision to change the project to a joint venture. The note has asked the cabinet to recommend the distribution of air traffic between the proposed Tata-SIA airport and the existing Hindustan Aeronautics (HAL) airport. On the land issue, the note states that it is advisable that the Karnataka government provides 3,500 acres of land to the Tata-Raytheon consortium on a lease basis. This is preferable to making a one-time gift of the land to the private parties in return of six per cent equity. On the 10 per cent equity stake to be picked up by the Centre, the note suggests that the payment for the equity should be in the form of manpower and technical help rather than cash. The original cabinet note also specified the air traffic distribution between HAL and the proposed Tata airport. It had specified
that only 50-seater aircraft will land at HAL. As none of the commercial airlines fly 50-seater planes, the ministry felt that the HAL airport will suffer a massive loss of revenue. Incidentally, defence minister Mulayam Singh has put up a strong case in favour of the HAL airport. The defence ministry manages the HAL airport at Bangalore. The original cabinet note also did not specify whether the Karnataka government will provide the 3,500 acres of land to the Tata-led consortium as a gift or on a lease. The note is expected to be put up for cabinet approval next week. The Tata-Raytheon airport envisages an investment of Rs 3,900 crore in two phases. The Tatas will hold 26 per cent equity in the project, while their two foreign partners, Raytheon and a Singapore consortium will hold 24.5 per cent equity each.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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