Citizens' Issues
Speed money: Formula 1 circus drives real estate scam in Noida that’s bigger than 2G and CWG

The race for land acquisition in Noida is gaining pace. Apart from a pretty racetrack, there will be a lot of commercial and residential property, maybe even an international airport, and more, all a short distance from Delhi

Motorsports has never been for those without deep pockets. Globally. However, for those who could not afford the thrill of being behind the wheels, there was always the option of sharing in the excitement by being part of the organisers.
Marshalls, safety officials, service teams, and all the rest of it-you got up-close to the action, you had access to the stars, and at the end of the day you even had somebody picking up your expenses, you were invited to the best parties, and if you were lucky then maybe an honorarium came your way too.

All this has changed. Leave alone the even deeper pockets needed to get behind the wheel, most support and organisational positions are also up for auction, barring the extremely highly technically designated ones. Pit crew positions, supposedly the holiest of all holies, as also those for the cheesecake on display, for example, are also eminently buyable: The guy who waves the stop/go signboard, or the girl who trots past suitably bared, often pay for the privilege of getting their mugs and more on the screen.

In the midst of all this, India's domestic motorsport scene has been trundling along, carried forward by a band of enthusiasts, who seemingly do not get tired despite the lack of serious sponsorships. Frankly, there are very few new faces; one sees the same lot going back 20-30 years, in charge. Whether it is the growing rally circuit all over the country, the rather static motor racing crowd at Sholavaram near Chennai, or the wavering go-kart races, the sport seems to, still, be running on its own steam with moderate to low support from the government.

Till the Formula-1 circus hit the horizon. And till whispers reached my ears-'do you want to volunteer for the Formula-1 season, which by the way is likely delayed by two months to December 2011, ostensibly because of Bahrain, but more likely because the progress on the circuit is way behind schedule. Oh yes, there is interest. But it now appears that one has to pay to be a volunteer. However, there is an 'encouragement fee' in case you get more volunteers! Does anybody smell another scam here?

But that's chicken feed compared to the real big one. The big one is probably as big, if not bigger than the Commonwealth Games (CWG) and the Indian Olympic Association (IOA) scams put together.

What we now have, on the Indian side of the horizon, is a 'circuit'. Named "Buddh International Circuit", it extends from one end of Noida, to way beyond Greater Noida, in its reach and control, with the racetrack being just one nodal component for what appears to be a land acquisition rampage of huge proportions. Fair enough, development cannot be stopped, land use shall be changed-that is how it is. The present agitation will eventually resolve itself-that is also a given. And apart from a pretty racetrack, we will see a lot of commercial property, residential property, industrial property, maybe even an international airport, and more, coming up, all within easy striking distance of Delhi. Even the sand being taken out has immense value; marshland and nature be damned.

But that's realty for you in India. Real estate corruption in India is a bigger ticket than the 2G scam, CWG scam and other scams that currently occupy mind space. Not as big as the mining scam, but certainly not too far from the defence scam, aviation scam and sea-cargo related scams-so these will take time to unravel. All these scams have a domestic side, which can be called "corruption" and a global side, which can be called "asset theft".

But what we have on the global side of the potential here at Formula 1, just as we did in the Commonwealth Games, is something else.

To start with, just like the Commonwealth Games, the whole Formula 1 concept appears to be, to put it mildy, in danger of winding down like an old grandfather's clock that has not been wound for some time. The undisputed boss, Bernie Ecclestone, is now 80, and is reported to have a history which is as colourful, if not more, than that of Dominique Strauss-Kahn, the ex-chief of the International Monetary Fund, now in a new disposition. For example, the television audience for Formula 1 is dropping, by as much as 35%, in England itself. (The stands don't really make that much money.) The private equity firm, CVC Capital, that now owns Formula 1, is reported to be accepting offers, and the only bid they have received is from a consortium composed of News Corp and Exor, the people who indirectly own Ferrari, which makes it a sort of one-automobile, one-television channel kind of in-house game. Think about pay-TV and only Ferraris.

That aside, the books at Formula 1 survive on very high 'hosting fees', paid by governments keen to see this event in their country. Close followers would have observed how stands are often empty. Some of these hosting fees, no doubt, are shared, especially where governments are corrupt. Viewed in a very simple businesslike manner, this is like the Indian government paying a foreign steel manufacturer to lift iron ore from India (which, amazingly, in a way is what is also happening, but that is a different report), and then also paying for everything else on the ground in India to assist, including paying for and putting up the infrastructure to do so. Imagine this, also, as leaving your house open for thieves, but also providing them with a car and keys to drive away, as well as a certificate declaring their provenance.

And to do all this, loans are organised, through Indian banks. Suitably hand-held by foreign banks, of course, so that tax-haven secrecy fundamentals can be brought into the picture, thereby providing our finance minister with an opportunity to look helpless. Again, the current number, in total, for the Formula 1 races is supposed to be in the region of (hold your breath) Rs700 crore to Rs800 crore as loans, grants and sanctioned expenses, on various accounts. This does not include the cost overrun as well as hosting fees.

These hosting fees are not small, they run into hundreds of millions of dollars, and are on an escalating scale, going up every year, regardless of anything else. To illustrate the size, France, which was the home of Formula 1, and where the first Formula 1 Grand Prix was ever held, has withdrawn simply because the hosting fees became too much for the organisers and the country to bear. (Local jokes refer to it now as Formula Zero, which when said in French is another colloquial joke altogether.) And France is one of the few developed countries where TV viewership is still going up.

What are the hosting fees India is paying, one way or the other, and who is paying it? There are no answers. Driving towards the work sites, one is not permitted beyond the outer perimeters, and the local motorsports bodies are not exactly forthcoming either. The official Formula 1 website does not say much about the India event. The Indian organisers and co-ordinators are, again, opaque.
The fact remains, that somehow, somewhere, some money from the taxes we pay are going towards this jamboree. And we have no idea how, who, or how much.

Technically, motorsports in India, like other sports, comes under the Ministry of Sports. That means, broadly, the Motorsports Association of India (MAI) and the Federation of Motorsports Clubs of India (FMSCI). There is a clear judgement out on this; they need to be under the Right to Information Act of India, 2005. However, their websites do not show any adherences, and are absolutely silent on the numbers as everything else. Their  'leaders' have been the same for decades-Nazir Hoosein since the '60s and Vijay Mallya thereafter.

At the same time, like the CWG or IOA, they are supposed to come under international bodies, in this case the Fédération Internationale de l'Automobile (FIA), which is what MAI comes under. Trouble is, FMSCI owes its allegiance to the IOA. So, now begins the game of recognised, not recognised and affiliated, unaffiliated, so on and so forth, round and round, like an F 1 race. MAI and FMSCI, as well as splinter groups which form, merge, divide again, have been at it for so long that within the motorsports world in India, most people don't really know what is going on.
In the midst of all this comes this big lollipop, the Formula 1 race, which offers multiple benefits to everybody. So differences simmer, but are brushed under the carpet, for now. In the interim, the real big game carries on, and only one small part is this business of 'paying volunteers', which is where this article started from.

The real big part, as always, has to do with the way the mammaries of the State are going to be sucked dry again - in every possible way. Bernie Ecclestone, the boss of Formula-1, is already under investigation in Germany for bribery - wherein a bribe was paid to an executive at Bayerische Landesbank to pick up a stake in Formula 1. And now we invite the same entities, to sell us the same old snake-oil, which we will pay for?
Nobody is really talking about the numbers behind Formula 1 in India. The truth is that if people ask questions, like the farmers who own the land nearby did, the state uses the might at its disposal and sends in its police to shut them up. Something like what they tried to do with the Commonwealth Games, not too long ago, and see where it got the organisers?

(Veeresh Malik used to take part in motorsports, but withdrew in disgust over the politics in the game. MAI and FMSCI do not adhere to the RTI Act. Questions addressed to some people involved in organising the Formula 1 event are met with wry grins, and not much else. The media is kept totally out, barring guided tours for elements within the already compromised motoring media.)



d v date

6 years ago

thanks, Mr Veeresh Malik. very good and badly needed expose.


6 years ago

This seems to be an article making a desperate attempt at sensationalism. On the motor sport administrative front it is factually incorrect and hopelessly out of date.

It talks about motor racing at Sholavaram near Chennai. At a rough guess, Sholavaram ended about 25 years ago!

Reference is made to the Motorsports Association of India (MAI) as an association under the Federation Internationale de l’Automobile (FIA). It may surprise the writer that at the end of 2008, the FIA General Assembly divested the MAI of its sporting power for India and give it to the FMSCI. Consequently the MAI has nothing to do with motor sport in India since that time.

That being the case the writer is certainly one of those who does not know what is going on – at least as far as the motor sport aspect is concerned.

I then wonder about the accuracy of the rest of the article.
I am submitting this second time as for some strange reasons it has not appeared on first occasion.



In Reply to Ketan 6 years ago

Dear Ketan, thank you for writing in.

1) "Sholavaram" was a bit of a tongue in cheek reference, which those who are in the motorsports "business" will know what the deeper pun intends, and also to invoke some nostalgia. Irungattukottai near Sriperumbudur is what the present race track is about. Yes Sir, even I know that.

2) The MAI, by its website as well as through efforts of certain members, still continues to attempt to co-represent motorsports in India. You may also wish to check up with the Indian Olympics Association and the Ministry of Sports on their position in context with the MAI/FMSCI issue. I did.

3) I agree, along with most others, I am not aware of what is really happening with motor-sports in India. That is what the article tries to bring out.


A potential that is probably on par with cricket manages to do worse than football, in India, is the best way to describe the state of affairs with motor-sports in India. And now we have this Formula None off Greater NOIDA making merry with a real estate porridge not too far out of Delhi, with more rivals trying to run a Formula Fun in Goa if we are to believe yet some more new motorsports news, while Formula One Grand Prix itself goes into loops outside India?

Please don't wonder about the accuracy of the rest of the article - please check it out yourself. I am absolutely correct on facts here - and have researched the subject thoroughly. And to be fair, I got the same kind of response from some people when I first opened the gates on the CWG scam, but that's OK too.

Humbly submitted, and thank you for writing in.


In Reply to malq 6 years ago

I do not know how long you have been involved with motor sport but I started in 1981 and my first major event was the 2nd Himalayan Rally in 1981. As you can see, I have been around the sport for a long time!

Try as hard as I might I am not able to comprehend your tongue-in-cheek reference to ‘Sholavaram’. Perhaps it is a case of my grey matter growing a little older!

I am partly responsible for the MAI website and was an active senior member of the MAI when it held the sporting power of the FIA untill Oct 2008. Consequently I do not agree with your statement that the website makes efforts to co-represent motor sport in India. If you have the courage to name the members who indulge in this activity, I can assure you that, if true, they will be stopped by the MAI.

I also know for a fact that the MAI has never contacted the Indian Olympic Association nor has it contacted the Government of India after October 2008. If your contacts in the Government and in the Indian Olympic Association say to the contrary, please let me have full details so that I may have the MAI pursue a proper recourse for the simple reason that it is not true.

As for the rest of the article I do question why you have placed such a major scam at so low a key – but that is up to you.


In Reply to Ketan 6 years ago

Thank you for writing in, Ketan - the MAI website is still up and running and making its claims, and copies of that are with the Ministry of Sports, claiming the same, so what more do you want?

Who is doing it? Same old, same old - why don't you file an RTI with me, and we get the proof in writing from the IndGovt?

The reference to SHOLAVARAM has to do with the fact that it attracted crowds of enthusiasts and general public - while Irunkakottai / Sriperumbudur race tracks do not.

And now the NOIDA Formula 1 has been shifted to 2nd week December 2011 - has anybody checked the met records for the dense fog that hits Greater NOIDA along the river at that time of the year, by the way?

On the real estate scams, yes, unravelling slowly slowly . . .

samar mahapatra

6 years ago

Yet another Kalmadi and another giant of a builder, the surest formula , for a land scam.


6 years ago

Ah Veeresh Malik - I should have guessed. He's back, and how! Even when he has something to say, trust him to drown it out in a pile of ranting.

So we have someone going from a land scam idea - very valid - and then bouncing from there to Bernie to CWG to mining!

Oh take it easy. I am not going to respond to your inevitable reply :D Just like that.



In Reply to Matt 6 years ago

Thank you for writing in, Matt - and most certainly, everything is linked - even if it can never be proved that Bernie may have been the getaway car driver for the Great Train Robbery or that Suresh K was the man who may have remotivated the Indian Railways cheques made out to (Ashok Travels and Tours, an ITDC company, remember??) and deposited them elsewhere.

The crooks are global, as always, it is just that with liberalisation, the scale and international movements have improved. Sumit Walia would have??


6 years ago

......and you have won the award for most idiotic article in year 2011.



In Reply to Gaurav 6 years ago

Thank you for writing in, Gaurav, and while there is still more than half the year left - I would appreciate some cogent and empirical data on what helped you come to this valiant and most affirmative conclusion. Is it that you did not understand the subtle parts, or were you upset at some of the home truths? Humbly submitted . . .


In Reply to malq 6 years ago

My comments were related to points where someone is trying to say Formula 1 real estate scam [btw everything happening in this country is scam now days :( ] 2G and CWG.


In Reply to Gaurav 6 years ago

Thank you, Gaurav - so let me get this right, is it your contention that the article is correct on facts, but just that you simply don't like the idea that well-known scams should be busted, especially if everybody on the ground, pit lanes, grid and stands knows that it is a scam already - which is why this article is idiotic because it just brings out things already known? From that point of view, agreed, the truth on real estate scams is known to everybody already - but still, we do have to work on it and let people know, right, because everybody may not be as aware as you? Humbly submitted.

Share prices on a downward trend: Monday Closing Report

The short-term support is at 5,300 on the Nifty

|The market traded lower, tracking weak Asian markets in morning trade. The decline, after two days of gains, was on account of the ongoing debt crisis in Europe and news that a ministerial panel is likely to meet this week to decide on diesel and domestic LPG prices.

The Sensex and Nifty opened at 18,269 and 5,457 respectively which were the day's high, too. The market then started its downward journey. The market fell to the day's low in the post-noon trade, after which it was range-bound till the end of the session.

The Nifty traded close to its support of 5,340. The Sensex fell 333 points to close at 17,993 while Nifty fell 100 points to close at 5,387.

The indices also hit their two-month lows around the same time with Sensex falling to 17,971 (its lowest intra-day since 24 March 2011) and Nifty was at 5,373 (its lowest mid-session decline since 22 March 2011). The advance-decline ratio on the National Stock Exchange was 274:1122.

A gap-down opening of the key European markets, on account of debt issues of some countries in the region, and US futures trading lower also added to the woes back home.

The broader indices were equally hammered in today's trade with the BSE Mid-cap index declining 1.41% and the BSE Small-cap index falling by 1.57%.

Barring the BSE Fast Moving Consumer Goods (FMCG) and the BSE Consumer Goods (CD) indices, all other sectoral gauges settled in the red. The top losers were rate-sensitive sectors like BSE Capital Goods (down 2.95%), BSE Power (down 2.91%), BSE Bankex (down 2.85%), BSE Realty (down 2.79%) and BSE Metal (down 2.62%). BSE FMCG gained 0.59% and BSE CD rose 0.49%.

ITC (up 2.29%) was the lone gainer on the Sensex today. The top losers were BHEL (down 6.69%), ICICI Bank (down 3.61%), Reliance Infrastructure (down 3.57%), Tata Motors (down 3.36%) and Tata Steel (down 3.30%).

The government will soon finalise the roadmap to raise a whopping Rs40,000 crore through disinvestment during the current fiscal. It will include sale of equity in blue chip companies like SAIL, ONGC, Power Finance Corporation (PFC) and Hindustan Copper (HCL). The government has already raised Rs1,162 crore by divesting 5% stake in PFC in May.

The follow-on public offer of SAIL is likely to hit the market next month and ONGC in July. Share sale programme of HCL is yet to take a concrete shape.

Markets in Asia settled sharply lower on concerns that the debt crisis in Europe will hurt the outlook for exporters in the region. This apart, preliminary data showed that China's manufacturing activity fell to a 10-month low of 51.1 in May from 51.8 in April, a sign that the rate-tightening measures has resulted in a slowdown. A strike by employees at a South Korean engine-parts supplier pulled down auto stocks in Seoul.

Also, speculations of a fall in demand for crude and metals due to the European crisis, resulted in commodity-related stocks ending lower.

The Shanghai Composite sank 2.90%, the Hang Seng tumbled 2.11%, the Jakarta Composite plunged 2.44%, the KLSE Composite fell by 0.78%, the Nikkei 225 tanked 1.52%, the Straits Times contracted 1.83%, the Seoul Composite slid 2.64% and the Taiwan Weighted closed 1.01% lower.

Back home, foreign institutional investors were net sellers of stocks worth Rs181.55 crore on Friday while domestic institutional investors were net buyers of stocks worth Rs398.19 crore.


Housing societies on mill lands seek clarity on rule to hire former mill workers

Government has not worked out a policy on implementation of amendment to development control regulations; residents of Sewree housing complex get no help from government departments on application of rule

People living in buildings that are part of mill redevelopment projects must talk to the developers to employ erstwhile mill workers for various services in their residential blocks. Otherwise, they could be pulled up under the law, as has turned out to be the case for residents of Dosti Flamingoes complex, in Sewree. The residential complex has been built on land of the erstwhile Standard Industries and China Mill.

According to an amendment of the Development Control Regulations, DCR 58 of 3 October 2007, redevelopment projects must employ former mill workers or their relatives, and the responsibility rests with the mill owner, the developer and the present occupier of the premises. However, despite a high court directive, the government has not yet worked out a concrete policy to clarify the clause. This ambiguity has resulted in all parties concerned looking the other way on this matter of providing employment, while the residents have been left confused.

Residents of Dosti Flamingoes complex were surprised when they were issued a notice by the state labour commission, which stated that they must employ retired mill workers or their relatives for various services in the housing society. This was followed by visits by local labour unions demanding employment for the workers in such activities as security guards. Residents say they were not told about the rule before and that the government and developers have been passing the buck.

"It is not that we are against hiring these workers. But most of the workers are old and not fit to perform duty as guards or other laborious jobs like housekeeping. They want minimum wages and we cannot even decide the quality of work for which we would be paying, which in any case is as per market rates/minimum wages, no cost arbitrage," explained a resident of the complex.
A spokesperson of the state labour commission could not confirm the controversial legislation. It is also unclear who must inform the residents about this. Dosti Corporation, the developer of Dosti Flamingoes complex, insists it was unaware of the clause, but said that it has nonetheless employed 64 mill workers. Mill owners, on their part, do not feel they are responsible for the mill workers as they have sold the mill.

A property lawyer said, "Housing societies don't fall under the jurisdiction of the labour commission, but if there is a rule pertaining to the workers, it must be followed. However, it is unclear as to who must take the responsibility, since 'occupants' mean flat dwellers." Ideally, the occupants should be notified about this before they take possession of the properties.

Ms Neera Adarkar, urban researcher and housing activist, said, "Even the workers who have got their VRS and compensation are entitled to a job, and I don't see anything wrong in employing them. However, it is between the developer and the purchaser to decide on who is to take the responsibility, and who must crosscheck whether such rules exist."

The confusion leaves room for further debates in similar cases. The residents also approached Maharashtra Urban Development Department secretary, TC Benjamin, seeking clarity on the matter, but have not made any headway. An RTI query on the legislative status of DCR 58 has also not been answered so far.

"We are quite confused, and even though we don't have to employ more than 70 guards in two shifts, we have to hire 110 because of the pressure from the labour union," a resident said. "We paying almost one crore rupees a year, and we don't even know whether we have to do it."


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