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Giuseppe F1
25th August 2009, 16:58
http://www.grandprix.com/ns/ns21750.html

AUGUST 25, 2009
Indian government rules that Formula 1 is not a sport


The Indian Ministry of Youth Affairs and Sport has vetoed a payment from Indian Grand Prix promoter JPSK Sports to Formula One Administration, saying that Formula 1 is not a sport. The payment of $36.5m should have been made in January but JPSK had to ask permission of the Reserve Bank of India, which controls all international transfers, under the terms of the Foreign Exchange Management Act. The bank referred the question to the ministry, which rejected the request, arguing that the sport might be "an entertainment" but was fundamentally a "commercial initiative". It argued that India does not need F1 and that the same money could be spent on other sports which would be more relevant to the general population. This is, of course, an irrelevant argument as JPSK has no plans to spend the money on anything other than F1.

The news is the latest twist in the story of the Indian Grand Prix, an idea that has been kicking around for 10 years. The concept has been championed since the late 1990s by British businessman Michael Taub. In recent years he has been supported by an Indian entrepreneur named Sunder Mulchandani. They were hoping for Indian government backing for the project and a deal was originally announced in the middle of 2007 involving the Indian Olympic Association (IOA), which is headed by Suresh Kalmadi, a member of the Indian National Congress political party, which is the leading player in the United Progressive Alliance (UPA), the ruling coalition that supports the government of Prime Minister Manmohan Singh. Kalmadi served as a junior minister in the national government in the 1990s.

The IOA, however, failed to find the funding needed and had to withdraw but in November 2007 a new deal was announced involving JPSK Sports, which was owned by the vast Jaypee construction conglomerate. It later emerged that Kalmadi's son, daughter and son-in-law are all shareholders and directors in JPSK, as is Mulchandani. During 2008 JPSK negotiated a deal over land with the state of Uttar Pradesh, which is run by Kumari Mayawati's Bahujan Samaj Party. This was allied to the UPA until June that year but then withdrew its support. This clearly did not go down well with the government. The deal with Mayawati was done in September, with 2500 acres being declared a Special Economic Zone. The plan is to use 1000 acres for the race track and the rest for other developments, in a project which will ultimately cost around $500m.

It may be that the project is being blocked by the government because of the involvement of Mayawati.

JPSK says that it remains committed to the project despite the glitch. Bernie Ecclestone will no doubt be willing to give the Indians a certain amount of leeway because he is keen to get the sport into the Indian market, and to get his hands on the estimated $400m that JPSK has agreed to pay in fees in the course of the next 10 years. This means that the race contract will start out at around $25m a year and will rise by 10% for the 10 year term of the contract. The inaugural Grand Prix is scheduled for 2011 and work will need to begin fairly soon if there is to be a circuit built in the time available. The construction itself should not be a problem because that money will remain inside India. However, JPSK may be a little unwilling to start paying out for the building work when the contract is not 100% certain. Ecclestone is not going to be keen to sit around and wait for the Indians to sort themselves out.

The rejection of the payment has been confirmed by Sameer Gaur, who runs JPSK. He says that the project is continuing and that his company is still fully committed to getting the event organised in 2011.

"We are building a motor car racing track capable of holding an F1 race," he said. "It could be used for other purposes too, like a motorbike race."

He says that the ministry is overlooking the economic benefits of the race for tourism and the country.

All things considered this is a very bad advertisement for India and does little to encourage the international business community to get involved in the Indian markets. Having said that, we may now have an explanation for Force India team owner Vijay Mallya's failure to pay his bills in F1.

jimakos
25th August 2009, 17:06
Really interesting information mate!!
Shame on them telling things like that.

ioan
25th August 2009, 17:15
I don't blame them.
Reportedly 700 million Indians are close to the starvation limit so maybe money should be spent on something else than Bernie's pockets.

Sonic
25th August 2009, 18:40
I don't blame them.
Reportedly 700 million Indians are close to the starvation limit so maybe money should be spent on something else than Bernie's pockets.

I was going to post much the same thing. India have far more pressing concerns prior to an Indian GP getting the go ahead.

inimitablestoo
25th August 2009, 20:57
Technically they're correct - F1 isn't a sport.

Motor racing is a sport - F1 is just a category within that sport.

Signed,
A Pedant :)

Viv
25th August 2009, 21:57
I don't blame them.
Reportedly 700 million Indians are close to the starvation limit so maybe money should be spent on something else than Bernie's pockets.

It is right now in the BCCI/Indian cricketers' pockets, so I dont see how having it in Bernie's would make any difference..

ioan
25th August 2009, 22:14
It is right now in the BCCI/Indian cricketers' pockets, so I dont see how having it in Bernie's would make any difference..

Bernie is no Indian at all, so it's better to have it in the pockets of the 'BCCI/Indian cricketers' as they will probably spend more of it in India than Bernie would anyway.

maximilian
25th August 2009, 22:32
I applaud the Indian government for not doing the same stupid thing too many other governments do - throwing much needed public money down the throat of Bernie Ecclestone, who makes outrageous financial demands to organizers for no other reason than there are plenty stupid enough to pay up. I found recent reports very interesting that the Canadians said NO to paying $175,000,000, and may now get the same deal for $75,000,000 - just goes to show you how overinflated those demands really are! :mad:

Saint Devote
26th August 2009, 01:16
Given their human rights violations and conditions in that country, India does not deserve to stage a grand prix.

Least of all put money towards a sport - the government are idiots as are all governments - populated by people with luxury apartments in Monaco!

Anyway. NO government ought to fund a sport. Not a single franc! Goddamn socialists!

Saint Devote
26th August 2009, 01:20
The Canadians will not get anything of the sort.

Bernie is not an idiot AND only the biggest business moron would upset existing PAYING clients.

Whatever journalist is writing that crap understands as much about business as Obama does of foreign policy which is sweet fanny adams!!

maximilian
26th August 2009, 01:44
Given their human rights violations and conditions in that country, India does not deserve to stage a grand prix.

Dude, last time I checked, India is a democracy. I think you meant to rant about CHINA :p There you'd have a point... or even other totalitarian regimes like the UAE and Bahrain...

ShiftingGears
26th August 2009, 04:27
The only sport in the eyes of many Indians is cricket. This decision isn't that surprising.

Storm
26th August 2009, 11:37
Given their human rights violations and conditions in that country, India does not deserve to stage a grand prix.


Deserve?

Do you actually know anything about India?

Yes there are millions of poor people and bad things happen to many of them but there are tonnes of other positives too. Or are you one of those, lets keep racing only in Europe types?

Saint Devote
26th August 2009, 11:44
I apologize for decrying India - you are correct.

I am not for Europe racing only no - I am for only racing in countries that are not tyrranies and that actually would support a grand prix by attending.

ioan
26th August 2009, 12:07
Yes there are millions of poor people and bad things happen to many of them but there are tonnes of other positives too. Or are you one of those, lets keep racing only in Europe types?

He's just one of those who love to slam everyone even if he doesn't know to much about them.

Funnily enough he is calling socialists the people who would want to fund a GP from the taxpayers money! :laugh:

Knock-on
26th August 2009, 12:15
I think the Government are right.

Cricket is a very inclusive sport in India whereas F1 is not at all and for that fact alone it would have been wrong.

Also, with Governments propping up the obscene amounts demanded by Bernie, the sport will continue to be overpriced just like the Toxic debt housing that lead to this recession.

Bernie needs to gain the correct renumeration for F1 and artificially inflating the series will make matters worse.

CaptainRaiden
27th August 2009, 07:53
I am not for Europe racing only no - I am for only racing in countries that are not tyrranies and that actually would support a grand prix by attending.

I'm sorry if I don't understand you fully, but are you implying that India is ruled by a tyrant/dictator or we have a tyranny form of government? If yes, first question, where have you been living all these years? And second, man, you need to read up a bit more on India. Probably a good start would be here ---> http://en.wikipedia.org/wiki/India

As for the topic, I just feel it's a damn shame. I know more than half of the population here is crazy after Cricket, but there is also a substantial growing population getting heavily interested in F1 and racing in general. And this new 'ruling' is nothing but corruption and bureaucracy, trying to put as much money as they can into their own pockets. Well, I can't say I didn't see it coming.

Storm
27th August 2009, 12:25
offtopic: X-ecutioner did you buy the Honda Jazz or something? (your sig)
I don't understand that ad though :)

CaptainRaiden
27th August 2009, 18:17
offtopic: X-ecutioner did you buy the Honda Jazz or something? (your sig)
I don't understand that ad though :)

I'm not in India right now, so didn't know which ad you were talking about. But saw it on youtube, and oh hell no. They simply stole it from this, which was the inspiration for my sig.

http://www.culture-buzz.fr/IMG/jpg/why-so-serious-2.jpg

Not that I wanna be a mass murdering psychopath clown. :D

Saint Devote
28th August 2009, 01:11
I'm sorry if I don't understand you fully, but are you implying that India is ruled by a tyrant/dictator or we have a tyranny form of government? If yes, first question, where have you been living all these years? And second, man, you need to read up a bit more on India. Probably a good start would be here ---> http://en.wikipedia.org/wiki/India

As for the topic, I just feel it's a damn shame. I know more than half of the population here is crazy after Cricket, but there is also a substantial growing population getting heavily interested in F1 and racing in general. And this new 'ruling' is nothing but corruption and bureaucracy, trying to put as much money as they can into their own pockets. Well, I can't say I didn't see it coming.

I did not imply that India is a tyrrany or that a grand prix should not be held there.

I do hold that no government should fund any sporting event. It is not a government's legitimate task to forcibly [taxes] take money from those that have earned it and give it to those that do not deserve it.

Corruption is the natural outcome where easy money that has not been earned is doled out.

Jag_Warrior
28th August 2009, 03:27
http://media.ebaumsworld.com/picture/Tarkus/FacePalm.jpg

harsha
30th August 2009, 18:19
I understand why the Indian Government wouldn't want to have F1...too much of costs,logistics to be involved.

With the threats to F1's future still not resolved and teams continuing to pull out of F1,why should the Indian Government give permission?

They are well within their rights to not give permission.

inimitablestoo
30th August 2009, 20:01
I wonder if the Indian Government will reconsider now that the country apparently has a potentially winning car ;)

call_me_andrew
31st August 2009, 03:21
On the one hand, I'm glad India is addressing more important socio-economic problems.

On the other hand, implying that racing is not a sport makes me want to boycott Indian goods.

Valve Bounce
31st August 2009, 06:08
I don't blame them.
Reportedly 700 million Indians are close to the starvation limit so maybe money should be spent on something else than Bernie's pockets.

I agree.

inimitablestoo
31st August 2009, 10:02
Implying that racing is not a sport makes me want to boycott Indian goods.

Judging by the recent US website that suggested boycotting Scotland by not buying anything from Ireland, China should be worried by the above ;)

nigelred5
31st August 2009, 20:21
Judging by the recent US website that suggested boycotting Scotland by not buying anything from Ireland, China should be worried by the above ;)

How about we just boycott the whole dang former empire ;)

DexDexter
31st August 2009, 20:57
Would Indians actually like F1? There is no way of knowing that. I think the races should be in places where F1 is truly popular. Like here :)

HenryM
31st August 2009, 21:16
well, they are trying to make popular in another places, new markets, new money...

here it became popular after a good local driver appear in F1, and the local GP was a natural step


but I think there is some public in India already, with Foce India, and from what I see there is a good local TV coverage...
and F1 is a sport, and it's no impossible to make money with the GP for the governamment.