23-Dec-2009

BIAL PPP - More Public Less Private

From The Hindu:
Bangalore: The notion that the public-private partnership (PPP) model is the salvation for Bangalore’s infrastructure deficit has been sharply questioned by the report of the Joint Legislature Committee on Bengaluru International Airport (BIA).

The report, tabled in the Legislative Assembly on Monday, reveals that the Karnataka Government spent a significant proportion of the project cost for the construction of the BIA without incurring any returns for a project that was promoted by three private companies — Siemens, Larsen and Toubro and Unique (Flughafen Zurich AG) Zurich Airport.

What the report establishes is that although the Government held only a 13 per cent share in the company, it spent substantial amounts, which, rightfully, should have been counted as equity in the project. If this had been done, the Government would have been entitled to its share of profits.

...

In effect, after having invested Rs. 50 crore as its share of share capital, the Government spent at least Rs. 600 crore more.

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