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Old 15th February 2020, 09:43   #1
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Default Buddh International Circuit sealed by YEIDA over pending payments!

Looks like India's very own Formula 1 racetrack is in deep trouble. The property has been sealed and the land may be auctioned to recover the pending dues!

Quote:
The Yamuna Expressway industrial development authority on Friday sealed Buddh International Circuit — India’s first and only Formula One track — as the Jaypee Infratech Limited failed to clear financial dues. YEIDA officials also said that the authority has also started the process to issue a global tender to auction the property to recover its dues.

The action comes one and half months after the Yamuna Expressway authority had cancelled the lease deed of 1,000 hectares of land to Jaypee International Sports Company.
Buddh International Circuit sealed by YEIDA over pending payments!-buddh.jpg

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“We would challenge the YEIDA’s action in the appropriate court on the grounds that the lack of fulfilment of obligations on part of authority has come in the way of completing the project, whereas 90% obligations have been met by the company. The move by authority is regressive as the racing track infrastructure that hosted the F1 race, and had put India and the state of Uttar Pradesh on the global racing map, is being cancelled. Such a move will be detrimental to attracting investment in the country and the state. Jaypee has completed 90% of its obligations by way of depositing Rs 2,400 crores towards land payment till date. Further, the company invested Rs 2,000 crores towards construction of motor race track and other related developments such as cricket stadium, etc,” said a spokesperson for Jaypee Infratech Limited.
Read the full article here - https://www.hindustantimes.com/citie...8zr7VuFEL.html

Last edited by CrAzY dRiVeR : 15th February 2020 at 09:47.
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Old 15th February 2020, 09:59   #2
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Default re: Buddh International Circuit sealed by YEIDA over pending payments!

All this because the government, in its infinite wisdom, wanted to charge 118% import duty on the Formula 1 cars and similar other high numbers on the other equipment the teams have.

They were not happy with earning the recurring service tax and entertainment tax revenues. Not to mention increased tax revenues from the improved economic activity due to tourism in a region with no naturally gifted features (no hills, forest, beach, waterfall, sand dunes, canyons etc. nearby) to boast about.

All this revenue would have kept coming had they not meddled with the marquee event. A sad end indeed.
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Old 15th February 2020, 10:09   #3
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Default re: Buddh International Circuit sealed by YEIDA over pending payments!

Quote:
Originally Posted by antz.bin View Post
All this because the government, in its infinite wisdom, wanted to charge 118% import duty on the Formula 1 cars and similar other high numbers on the other equipment the teams have.
Actually, NOT.

Main reason = The Jaypee Group's love for debt & crazy expansion. This F1 track is hardly an issue...many people who invested in Jaypee's flats haven't gotten possession! It is a terribly mismanaged company.

Back to F1, anywhere in the world, the race needs to be subsidised by the government. Else, it just doesn't make commercial sense. For Jaypee to have started the Indian GP without any sort of government support was foolhardy. No one in India wants to watch F1 either. Even as an F1 enthusiast since 20 years, I would rather watch F1 on TV (comfortably) than at the track. And let's not forget how BORING F1 has become. F1 in India is destined to fail.

I'm just sad because this is a great, driver's track.
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Old 15th February 2020, 11:29   #4
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Default re: Buddh International Circuit sealed by YEIDA over pending payments!

Maybe Jaypee group didn't expect such drastic action from the government?

Because just yesterday morning, they were in the news for this partnership with Hero Motors, where the latter handed over 30 Maestro Edge scooters to be used by the staff and management at BIC. (I'm guessing Hero Motors trying to get some PR value out of the unsold BS4 stocks!).

Buddh International Circuit sealed by YEIDA over pending payments!-heromotocorpscootersatbic21200x675.jpg

And by evening - the property has been sealed.

Last edited by CrAzY dRiVeR : 15th February 2020 at 11:30.
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Old 15th February 2020, 11:46   #5
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Default re: Buddh International Circuit sealed by YEIDA over pending payments!

Let me also chip in the rates offered by BIC are prohibitive. A major manufacturer race series actually finds it cheaper to fly the cars to Dubai and back, rather than host the series.
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Old 15th February 2020, 12:04   #6
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Default re: Buddh International Circuit sealed by YEIDA over pending payments!

I am one of the thousands of disillusioned homebuyers in Jaypee Wishtown in Noida, having invested hard earned earnings 8 years ago and still waiting, and in the process seen the subsidiary company (Jaypee Infratech) declared bankrupt, insolvent and almost went liquidation before our honorable Supreme Court intervened. Though the founders are visionary, the company and its subsidiaries are overly mis-managed with 'sarkari' type work ethics.

The corporate work culture is simply not there. Greed and rapid expansion took a toll on their financial standing and eventually sank because of the volume of debts. These extravagant projects e.g., BIC, Yamuna expressway, Jaypee Hospital were built by siphoning funds from home-buyers and investors meant for apartments. So, I for once, am delighted to see the dismantling of this 'evil' empire. At least, I find solace that some sort of justice is done.

Last edited by GTO : 19th February 2020 at 07:09. Reason: Spacing. Typos.
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Old 15th February 2020, 13:24   #7
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

As someone who was involved in the development of the racetrack, I am really saddened by this development but hardly shocked. Jaypee group has been in trouble for some years now and authorities have already repossessed a lot of their land.

I also feel that the governments were right to deny subsidies and tax waivers. Unlike most sports, F1 is a privately owned group which is driven by greed. That's why there won't be a German Grand Prix this year but Baku circuit stays on!
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Old 15th February 2020, 13:39   #8
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

The Govt is doing what Govt's are supposed to do. Force obedience of the law. I am glad the rich and the powerful are not being let off. If F1 needs Govt subsidy to survive, as some posts highlight, then India is not (yet) the place. We have far more important issues that need a Govt subsidy. If the rich (we) need our toys and play yards we should pay full dollar for it. Mine is probably not a popular view on a car forum !
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Old 15th February 2020, 23:45   #9
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

I have no intention of advocating any subsidy to the F1, government is free to take any legal action against the offenders.

But my worry is the F1 is defined as bare "entertainment" by the U. P. government instead of counting it as "sport" activity.

India is nowhere in the motosport scene and Buddh International Circuit was seen as a ray of hope. If F1 or any other motosport activity develops in the country then it will also open up doors for opportunity of direct and indirect employment.

IMO govt should atleast not demoralize the motosport if they can not promote it, they should be careful while defining the morosport. Instead they can appoint some regulating body to take care of any irregularities in the future.
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Old 16th February 2020, 08:24   #10
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

A pity because it is yet another evidence of corporate mis-governance. The unfortunate part about this is that the public is the only eventual loser. The debate whether India should have had a F1 track in the first place when there's so many other grave issues is endless and without a firm yes/no answer.

Quote:
Originally Posted by V.Narayan View Post
The Govt is doing what Govt's are supposed to do. Force obedience of the law. I am glad the rich and the powerful are not being let off.
What is said about this is: the F1 track wouldn't have come up at all unless the powers-that-be during that time had allowed it with plenty sops and concessions, much of that possibly under the table. And with the Govt changing, the whole dynamic changes. (Another example is the rumor with Kia). Only the public suffers.

Sealing/liquidating BIC to recover dues is a good move if it helps to give investors their money back. But we need a prevention mechanism.
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Old 16th February 2020, 09:32   #11
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

Jaypee group "Yeida banake peda khana chahtha tha!"(pun intended).

But looks like it happened other way.
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Old 17th February 2020, 11:15   #12
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

This leaves only two tracks in India remaining until Buddh reopens, The MMRT in Chennai and Kari Motor Speedway in Coimbatore. What happens to the events scheduled there in upcoming months?
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Old 17th February 2020, 11:47   #13
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

It looks like no other sport other than Cricket has a bright future in India. Disagree that statement? look at the number of medals we got in the history of Olympics! We simply don't want to promote anything else other than cricket. The money in it is huge.

Sad to see the BIC in this condition. Hope someone sensible will revive it to something good for future generations so that they could get a taste of speed.
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Old 17th February 2020, 12:01   #14
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

Quote:
Originally Posted by antz.bin View Post
All this because the government, in its infinite wisdom, wanted to charge 118% import duty on the Formula 1 cars and similar other high numbers on the other equipment the teams have.

They were not happy with earning the recurring service tax and entertainment tax revenues. Not to mention increased tax revenues from the improved economic activity due to tourism in a region with no naturally gifted features (no hills, forest, beach, waterfall, sand dunes, canyons etc. nearby) to boast about.

All this revenue would have kept coming had they not meddled with the marquee event. A sad end indeed.
Sadly this is not even a part of the sheer, gross, possibly malicious governance at the JP group.

With an income of approx RS 7,000 crores their total debt exceeds 30k crores (used to be 70k crores but they divested their only profitable, cement venture). As of last count, 32k houses, that's 32,000 middle to upper middle class families were not delivered. Many are years beyond schedule.

So if any govt strips assets, esp white elephants like an F1 track and tries to restore some of that money back to middle class house buyers, it has my full support.

Besides, how much revenue would a highly elitist sport that takes place once a year will even generate?

Last edited by Stribog : 17th February 2020 at 12:04.
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Old 17th February 2020, 13:25   #15
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Default Re: Buddh International Circuit sealed by YEIDA over pending payments!

I am not getting into any political discussions, but didn't Jaypee and DLF get into issues with the change in government? is it the political issues which led to their fall?
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