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Home > Business > Reuters > Report

Bangalore international airport held up by legal hurdle

January 31, 2003 19:09 IST

A project to build a $230 million airport in the technology hub of Bangalore with the help of foreign firms, has run into a legal bind, state officials said on Friday.

The central government has yet to pass a legal amendment that will allow private firms to build and run airports under a liberalisation programme.

Authorities in Karnataka said construction of the international airport, originally planned for April 2002, has been delayed by a year. The project is expected to be completed in 30 months from the start date.

State officials said the amendment had been expected to be passed by November 2002 but had been delayed by differences within federal government departments.

S M Krishna, chief minister of Karnataka, told a news conference after returning from the World Economic Forum meetings in Davos, that foreign investor sentiment would be hurt by such delays.

"I would like to convey to the government of India our deep sense of let down," Krishna said.

International airlines including Lufthansa and Malaysian Airline System are already flying to Bangalore, a key high-tech centre in India but the absence of an international airport is seen as a barrier to its growth.

The consortium that won the contract to build the airport, led by German engineering group Siemens, also includes Indian construction giant Larsen and Toubro.

The building consortium, which signed a contract early last year, holds a 74-per cent stake in the airport company, Bangalore International Airport Ltd. Karnataka's government and the Airports Authority of India hold 13 per cent each.

The project, involving an area of 4,200 acres, is planned at Devanahalli, some 40 km from Bangalore. The consortium sees the airport with an initial capacity for handling 3.7 million passengers and 140,000 tonnes of cargo a year.

© Copyright 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.



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