Wednesday, April 16, 2008

Old Bangalore airport stays, rules High Court

Bye Bye Devanhalli. The speculators are screwed.

CHANGE IN FLIGHT PLAN: Karnataka High Court says old Bangalore airport must be retained.

Bangalore: The old Bangalore airport must be retained and the business agreement according to which had to be shut down must be renegotiated, the Karnataka High Court ruled on Wednesday.

The court asked the state and Central governments, the Airports Authority of India to renegotiate the deal with the Bangalore International Airport Limited (BIAL).

The governments had signed a deal with BIAL that the existing HAL airport in the city would be shut once the new private airport becomes operational. The new airport, which is 40 km away from the city, is scheduled to become operational on May 11.

City civic groups have said roads to the new airport have not been built and the government should retain the HAL terminal. At least four public interest petitions were filed in the High Court against the closing the HAL airport.

The new airport is supposed to handle 10.1 million users by 2010. but HAL airport is already handling 10.5 million passengers.


Anonymous said...

Great work. Keep it up. Your blog has become required reading each morning for me.

Venky said...

Thanks, I'll do my best to post what makes sense to most people but somehow is ignored by the tabloids of india

Shailesh said...

Liquidity crunch hits realty developers
Ranju Sarkar in Mumbai

Real estate developers are feeling the liquidity crunch -- the sources of funds are drying up even as they get squeezed from both sides: high interest rates and property prices have hurt offtake while rising steel, cement prices have pushed up input costs 20-25 per cent, which developers have to absorb for now.

''The crunch is getting severe. It's not apparent, but will become more apparent in the next six months. Land prices are likely to fall in the next 3-6 months,'' said Chanakya Chakravarti, MD (real estate business), Actis Advisers, a PE firm.

Land prices have been the key instigator and catalyst for real estate prices going through the roof. Real estate observers, analysts and agents say there's enough evidence to suggest that developers are feeling the crunch.

The evidence: Thanks to the demand slow down, actual transactions have dried up. In some cases, where developers have higher sales, the cash flows are not there as the receivables are high, points out the CEO of a real estate fund.

Developers are cutting price tags. DLF recently sold projects in Chennai and Manesar in Haryana at Rs 2250 per sq ft, which were sold in a space of 3-4 days. This underscores the point that there's a market if prices are affordable.

Developers are disguising price discounts with various incentives like free parking or free registration to reduce the overall cost of acquisition for buyers.

Construction cost has gone up by 20-25 per cent with the spike in prices of steel, cement and other material.

''The cost of steel today might be more than the land cost for a 1000-sq ft flat. While the market was able to absorb the increase in land prices, it may not be able to absorb the increase in the cost of inputs,'' said Arun Agarwal of Reliance [Get Quote] Estates, a Delhi-based real estate broker.

Developers, especially mid-tier and local players, are trying to rope in private equity players.

''The availability of bank finance is very limited. As a result, most developers are going for private equity as that's the only avenue left,'' said Vijay Kumar, CFO, Delhi-based Shipra Group, with presence in Ghaziabad and Noida.

To cope with the slack in demand and liquidity crunch, real estate brokers say developers are going slow on the construction of existing projects, with the hope that the pressure from high input prices could ease off in coming months.

Builders are borrowing in the inter-corporate deposit (ICD) market at interest rates of 19-20 per cent. This shows their desperation for cash flows. Companies typically borrow in the ICD market for 3-6 months; thus, they are borrowing with a view that the market will improve and its short-term measure to get some funds.

Shailesh said...

Suggestion: You don't need to keep blog moderated. I read another blog for US ( ), there is lively discussion happening daily.