Karnataka legislature committee faults Murthy, Chandrashekhar for BIAL shortfalls
22 Dec 2009
On Monday, a joint house committee of the Karnataka legislature on questioned the huge profits raked by Unique Zurich Airport, a key promoter of the Bangalore International Airport (BIA), with its off-loading the 12 per cent of its 17 per cent equity holding in October 2009.
"The private promoter (Unique Zurich Airport) walked away with an over 1,050 per cent return in just four years by off-loading 12 per cent (Rs46.15 crore) of its 17 per cent (Rs65.38 crore) stake at a whopping value of Rs.484.6 crore," according to the report, tabled in the state legislative assembly earlier in the day.
"The flawed PPP (public-private participation) policy has allowed the private participant to aim for short-term profit at the cost of the public and it is threatening the very fabric of our state's confidence and good intentions. It is better to enact laws for stalling undue profiteering for the welfare of the state," the report said in its recommendations.
The Swiss-based Unique decided on 6 Oct divest its majority stake to GVK Power and Infrastructure Ltd, the private operator of Mumbai's Chhatrapati Shivaji International Airport which is India's busiest airport.
Larsen and Toubro Ltd Infrastructure Development Projects Ltd, the second private partner in the consortium - Bangalore International Airport Ltd (BIAL) off-loaded its 17 per cent equity stake (Rs 65.38 crore) to GVK on 6 December for Rs686 crore at Rs105 a share.
Siemens Projects Ventures (SPV, Germany) the third private partner in BIAL, holds a 40 per cent (Rs 153.84 crore) equity stake, while public sector players, the AAI and Karnataka State Investment & Industrial Development Corporation (KSIISC) own 13 per cent (Rs50 crore) each of the total equity (Rs384 crore).
