India to host F1: The Kalmadi connection – another CWG in the making?

17 Sep 10 India to host F1: The Kalmadi connection – another CWG in the making?

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A few days back, I learned that India is to host its inaugural Formula One (F1) race on October 30, 2011.

The story begins in June 2007, when Mr. Suresh Kalmadi (of the Commonwealth Games (CWG) scam fame), the president of the Indian Olympic Association (IOA), signed a letter of intent with F1. Under this agreement, the IOA was supposed to promote the event, build infrastructure, get support (and money) from the government, etc. In short, make the F1 happen!

But somehow, by late 2007, the IOA and government were out of the picture – something that came to light (or to media attention) only in 2009. This was when we discovered that F1 had signed an agreement with a company called JPSK Sports Pvt. Ltd., to build the track and other infrastructure. In reaction to this news, The Times of India (August 23, 2009) reported the IOA as stating its inability to fulfil its commitments, due to insufficient government support and funds. Effectively, the IOA washed its hands off F1.

Enter JPSK Sports!

It turns out that 13% of JPSK Sports is owned by Subha Realty, a company in which Mr. Kalmadi’s son, Sumeer Kalmadi is a director. Also, Mr. Kalmadi’s daughter and son-in-law, Payal and Aditya Bhartia were later appointed as directors of JPSK. [What a coincidence!] Incidentally, this company was incorporated a few days after Mr. Kalmadi’s original announcement in 2007.

The promoters haven’t told us what JPSK stands for. However, JP is short for Jaypee, a well-known construction company and majority shareholder, and SK are the initials of both Mr. Suresh Kalmadi and his son, Mr. Sumeer Kalmadi.

Media reports tell us that a whopping 2,500 acres of land have been acquired from the UP government for the project. Interestingly, this land was originally earmarked for an SEZ! If any of you can explain to me how an F1 track qualifies as an SEZ, I’d be most grateful.

Apparently, the race track will take up 40% of the land, leaving the rest to be developed by the various promoters. Plans include a cricket stadium, a golf course, a sports academy and a hockey stadium.

I’m not even going to get into the issue of using political clout for private gain – that’s a given. To expect anything else from Indian politicians is utopia! However, going by the Commonwealth Games experience, and given the Kalmadi connection (coincidence?), how do we know that the F1 track will not collapse due to monsoon rains?

Arun Jethmalani
Arun Jethmalani

Arun is one of the founders of ValueNotes. Apart from trying to build a high-quality research business, he has spent the last 27 years researching, analyzing, and dissecting companies and industries. He has worked with clients of all shapes and sizes, from all parts of the world – in providing them insights that make a difference to their business.
Prior to ValueNotes, he was an equity analyst/advisor, and wrote extensively on investing – including a column titled “Value for Money” which ran for 10 years in the Sunday edition of the Economic Times. To this day, he remains an avid “value” investor.
He has also been published in several other publications, and is a regular speaker at events related to technology, investing, competitive intelligence, business process management, Internet, etc. See: Valuenotes Events
He has been instrumental in developing a community of research and intelligence professionals in India, and is the founder and current chairman of the SCIP (India) Chapter. Arun holds a B Tech from IIT, Bombay and an MS from Duke University, NC, USA. LinkedIn Profile

2 Comments
  • Arun Jethmalani
    Arun Jethmalani
    Posted at 01:20h, 19 September Reply

    I agree, All Indian politicians (maybe with a handful of exceptions) have skeletons in the closet. So why Kalmadi?
    Well, he’s fresh in our minds!
    Feel free to post examples of others.

  • Swapnil Dasgupta
    Posted at 15:22h, 18 September Reply

    Why are you picking on Mr. Kalmadi? All our Indian politicians are like this. Politics is a family business today, and every one of them is in it to build their private fortunes.

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