F1 in India has lots of hurdles before 2010 debut
Businessman Dominic Cabral from the Western Indian state of Goa is an avid motor racing fan, one among a growing legion in India who follow the sport with a passion. Once a year, Cabral travels to at least one race at which 28-year-old Narain Karthikeyan — the first Indian Formula One driver — is participating. Last year that took him to the Malaysian circuit. This year he plans to travel to Bahrain in April.
Cabral was not the only one in Malaysia waving the Indian tri-color flag. Around 500 Indians attended the race. The motor sport craze has come of age in India.
In 2010, Cabral and other Indian motor sports fans will be in for a treat closer to home. That is when the country with the second largest population in the world will host its first Formula One Grand Prix.
India has a great fan following for this sport and F1 is set to provide yet another boost to the economy. As an example, the small country of Bahrain in the Persian Gulf region made a small investment $150 million in the sport three years ago. Today, it is reaping huge returns.
The Bahrain International Circuit, a state-of-the-art race venue, took in $664 million over the last three years. Last year's turnover alone stood at $394 million.
Many teams would like to compete in India's booming market and the people at Formula One know it. No wonder Bernie Ecclestone, the F1 supremo, told the Bloomberg News Service: "India is a country that is probably going to grow quicker than China."
Indian motor sport enthusiasts are in an upbeat mood as the country prepares to put down the red carpet for the who's who of motor racing three years from now. The race to make things happen, right from building a track circuit to a host of allied infrastructure which goes along with Formula One, has already started.
India had been toying with the idea of having its own grand prix since Karthikeyan became the first Indian to become an F1 driver in 2005. He is currently with Williams as test driver. Besides Karthikeyan, Karun Chandhok, is India’s leading driver and currently racing in the GP2 series.
And for his part, Ecclestone is keen to expand the sport’s reach further in Asia. India, with a booming economy and more than 500 million people under the age of 20, has been a strong candidate for a long time. But the magnitude and the cost of bringing the mega event to the sub-continent are mind-boggling.
To bring the circus called motor sport to India will entail huge investment of something in the range of about Rs 1500 crore ($375 million). The track cost projection is expected to be in the range of Rs 500-550 crore ($125 million to $137.5 million). Further, the cost of the land, the infrastructure cost is likely to shoot up to over Rs 1550 crore ($387.5 million). India’s bureaucracy means that land deals can take years.
The Formula One Administration (FOA) charges the hosts rights fees which hover between $15.75 million (Rs 63 crore) and $52.5 million (Rs 210 crore). The total land needed to set up the facility is estimated at 750 acres with the track, pits, paddocks, and stands accounting for approximately 300 acres. And to recover the amount invested a good business model has to be in place.
Returns on investment of this magnitude are equally impressive. An F1 race in India can generate revenues of more than Rs 50 crore ($12.5 million) besides creating more than 10,000 direct and indirect jobs, according to projected estimates. Besides the track, the supporting infrastructure must also be up to international standards — a mammoth task indeed awaits India.
But the prospect of seeing the magnificent machines streaking across a track close to the capital Delhi along with the glamorous paraphernalia of the F1 circus is one which excites all motor sports fans who are waiting in anticipation. In Delhi, a newly modernized international airport, good roads and a whole host of new hotels will help it score over rival cities.
Bernie Ecclestone has told potential investors that a multi-utility sports complex, which combines sport and fun, with the Formula One race being just an incidental activity, would be needed to make it successful.
There is much to be done before the lights signal the start of the first Indian Grand Prix. ohmynews.com