Will politics in India affect future of F1 race?
The future of F1 races in the country and Budh International Circuit (BIC) will now largely depend on how the Jaypee Group builds its relationship with the Samajwadi Party (SP), which swept the just concluded Uttar Pradesh assembly elections.
The Jaypee Group is publicly known to be closely connected with Mayawati’s Bahujan Samaj Party (BSP), which was ruling the state till now, but was routed in the elections. The group had prospered under Mayawati’s rule and most of its large projects are based in the state.
Any action against the Group from the SP government could directly impact the sporting activities of the group, and F1 will be the first casualty because it is the most high-profile one and involves large land acquisition which had come under criticism for allegations that the farmers were short-changed during the process.
The BIC has been built along the 165-km Yamuna Expressway, which promises to halve the travel time between Delhi and Agra when it opens in two months. It's a build-operate-transfer (BOT) project. Jaypee is not charging anything to build the expressway. Instead, it will collect toll on the road for 35 years, and then hand it back to the government.
More importantly, the UP government has given it 6,000 acres of land on either side of the road on a 90-year lease. It is developing townships at five locations: two in Gautam Budh Nagar (where the F1 circuit is situated), and one each in Noida, Aligarh and Agra. Jaypee plans to build houses, offices, an international airport and a sports complex on it. The development of it could yield a monstrous Rs 1.35 trillion in revenues over the next 20 years, Manoj Gaur, executive chairman, Jaypee Group is reported to have told News Duniya.
Jaypee bagged the project in 2002, when the BJP was in power. But it was the Mayawati government that helped Jaypee acquire land, at fixed rates and at a time when land acquisition by governments had become a hot potato. Flaying this land acquisition, opposition parties in UP say the government paid owners the price of agricultural land, not commercial land.
"Jaypee was favored brazenly, rules were bent for them," alleges Samajwadi Party spokesperson Rajendra Chowdhry in the report. "Whatever the government did was well within the bidding agreement," replies Gaur. Chowdhry also alleges that Anand Kumar, Mayawati's brother, holds benami shares in the Jaypee Group, the report said. "If the SP comes to power, it will probe the matter," he had added before the election results.
A November 2011 research report of Edelweiss Capital said: "Jaiprakash Associates (holding company) is exposed to the risk of any political upheaval or any exigencies in UP."
The second road project, the Rs 400 billion Ganga Expressway, is structured along similar lines, but is bigger. Jaypee has the right to develop 30,000 acres in eight townships on this road connecting Noida and Varanasi. The 1,047-km project is currently in limbo, with the Allahabad High Court in May 2009 asking the state government not to go ahead with it without environmental clearances. Gaur is optimistic. "If people are happy with the Yamuna project, they may clamor for the Ganga project.
What is however important is that the Jaypee Group has prospered under all regimes: it bagged the Yamuna Expressway under BJP, it bought a cement company through a court-monitored auction during Mulayam's earlier regime and thrived under Mayawati.
"We will work with the government," says Gaur in the report. How well the Group can manage that will determine the future of their existence and definitely F1 in India.