While the Malaysian firm is keen on lease rentals being revised in such a way that their payment are less for the first 12 years and then equalised over the remaining concession period of 40 years, Tacid is sticking to tender conditions which had stipulated that lease rentals bids must be on the basis of payments yearwise for 40 years.

Tacid sources argue that bids on lease rentals were given by Bukit Katil and it was on that basis that the Tamil Nadu government had invited them to participate in the project and given them a letter of intent.

It seems that Bukit Katil feels that the viability of the project will be affected if it agrees to match the rentals spread over 40years. However Tacid sources say that the corporation has agreed for a moratorium on lease-rental payments for first five years and only after that payments come into effect.

Thus the initial agreement between Tacid and Bukit Katil is still be signed. The KPMG-drafted agreement has been sent to the Malaysian firm recently but it is yet to give a response. It was supposed to contact its financial consultants and then reply regarding approval of the initial agreement and setting out parameters for the concessional agreement.

It is also said that Malaysian firm is expecting a refund of the Rs 3.5-crore earnest money deposit after being awarded the contract. However, Tacid sources say that this initial down-payment is non-refundable.

Meanwhile, Bukit Katil is said to be willing to pump in its share of 89 per cent equity for the project, estimated at about $40 million or about Rs 168 crore, only after the initial agreement is signed. It is also then expected to float a special-purpose vehicle forimplementing the project cost, which is said to have escalated from the original Rs 220 crore to Rs 320 crore.

Bukit Katil is trying to rope in its Australian partner Ogden IFE to pick up equity stake and play a major role in the construction and marketing of the PECC. Tacid has held discussions with both recently regarding this project, it is learnt.

The Federation of Indian Export Organisation (FIEO) unable to contribute to the 11 per cent equity along with some institutions has now left out from equity funding by Tacid.

Strange as it may seem while FIEO the original mooter of the exhibtion centre idea is out of this project, at least for the funding part of it, the Delhi-headquartered India Trade Promotion Organisation (ITPO), a bitter rival of FIEO for this project at one time, is now back in reckoning. Apparently ITPO chairman Yogesh Chandra has shown keen interest to pump in some equity in the project as he considers it an essential project.

After dropping FIEO from equity contribution, Tacid issaid to be scouting for other partners and has begun talks also with FIs including IDBI, ICICI, ILFS and IDFC for taking a financial stake in the project.