Home Economy Controversy dogs India’s biggest industrial project

Controversy dogs India’s biggest industrial project

By Shyam Pandharipande, IANS

Nagpur : The ambitious Multi-modal International Hub Airport at Nagpur (MIHAN), or cargo hub project as it is popularly known, is dogged by an exasperating blame game between Civil Aviation Minister Praful Patel and top officials of the state-owned Maharashtra Airport Development Company (MADC) set up to run it.

While the infrastructural works of the multi-product Special Economic Zone (SEZ) to which the MIHAN project is aligned are apace, a question mark hangs over the conjoint project as such because of the central ministry's reluctance to hand over the Nagpur airport to the MADC.

The cold war between Maharashtra Chief Minister Vilasrao Deshmukh of the Congress and Patel of the Nationalist Congress Party (NCP) over the Rs.100 billion (about $2.5 billion) project has perturbed several industrial giants including IT majors that have bought land in the SEZ.

Billed as India's single largest ongoing project coming up on an area of 4,311 hectares and promising to provide jobs to 120,000 people besides creating indirect employment for at least twice as many, MIHAN will house Boeing's Maintenance, Repair and Overhaul (MRO) unit, a health city comprising 11 super-specialty hospitals and a large IT park besides myriad other industrial units.

The transfer of the airport to the MADC, crucial for the gigantic project's progress according to its executive head R.C. Sinha, is being delayed on one pretext or the other despite repeated promises made by the civil aviation ministry's Airports Authority of India (AAI) over the last three years.

Reiterating his "in-principle" agreement to hand over the airport to the MADC, Patel, at an interaction with the press here Friday, attributed the delay to the state government's failure to fulfil certain obligations.

He said he has sought a decisive meeting with Deshmukh to resolve the deadlock.

"How can anyone accuse me of holding up the project when I have introduced so many flights from the Nagpur airport and am paying personal attention to its development?" Patel asked, hastening to add that he was neither interested in any credit for the project nor bothered about the criticism coming his way.

He said the Deshmukh government had so far failed to acquire land in the immediate vicinity of the airport, submit a concrete plan for the airport development and call bids from competent private parties for the purpose.

"Unless the state government did this, how do I seek the (central) cabinet approval for the handover?" Patel queried.

He also pointed out that the state government has not yet given alternative land to the defence ministry to relocate the Indian Air Force's Gajraj project situated on the land near the airport that the MADC wants for the MIHAN project.

Repudiating the minister's posers, MADC general manager Ramesh Yaul said the formation of a joint venture company of the MADC and the AAI as insisted upon by the central ministry was delayed because of the latter.

"While the MADC has sent names of its representatives who would be on the board of directors of the proposed JVC, the AAI has neither come out with its list nor sent its equity share of Rs.49 million," Yaul told IANS.

He said the formation of the JVC was a prerequisite for any further development of the project. "In fact it is for the yet unborn JVC (to which the AAI is supposed to hand over the airport) to float global tenders for the airport development."

Yaul said the MADC submitted a techno-economic feasibility report and a master plan of the project way back in 2002 and carried out due diligence at the civil aviation ministry's bidding.

The state government also waived surcharge on aviation fuel and stamp duty to the tune of Rs.4 billion involved in the development of New Mumbai airport as sought by Patel's ministry as a pre-condition for the airport transfer, Yaul said.

The state government has also acquired more than 2,000 hectares of land including 250 hectares in the immediate vicinity of the airport but the central ministry went back on its word at every step and put up a new condition, Yaul said.

"The civil aviation secretary agreed to hand over the airport to the MADC first in a joint meeting held in September 2003 and the same promise was repeated by the ministry in three subsequent meetings held in 2006 and 2007," Yaul recalled.

The ministry reiterated its promise of the airport handover in an affidavit it filed before the Bombay High Court's Nagpur bench and in the memorandum of understanding (MoU) between the MADC and the AAI, the official said, adding that the deadline the ministry itself set was June 17, 2007.

As for giving alternative land (400 hectares) for the IAF's project and constructing an additional airstrip for it, Yaul said this would not be possible unless the AAI handed over the airport and the land it possesses around it to the MADC.