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Business News/ Industry / Formula 1: Indian GP may come to a screeching halt

Formula 1: Indian GP may come to a screeching halt

F1 supremo Bernie Ecclestone says Indian race probably won?t be on calendar next year, points to taxes

Currently, a possible 22 races are jostling for space on the Formula One calendar with teams expressing a strong preference for a maximum of 20. Photo: Hindustan TimesPremium
Currently, a possible 22 races are jostling for space on the Formula One calendar with teams expressing a strong preference for a maximum of 20. Photo: Hindustan Times

Mumbai/Budapest: Just three words, and he has given us enough of a headache," said race driver
Karun Chandhok
, in an attempt to soften the blow dealt by the chief of
Formula One
(F1) racing.

Bernie Ecclestone told Reuters in Budapest, the venue of last weekend’s Hungarian Grand Prix (GP), that the Indian GP held in Noida, Uttar Pradesh, since 2011, is likely to be dropped in 2014.

Ecclestone was reacting to a direct question when he said, “Is India going to happen next year? Probably not." He said the reason was “very political", pointing to government taxes, which has been his grouse from the beginning.

The F1 chief’s reaction also comes as a result of a crowded calendar next year, with some new hosts in the fray, and the challenge of fitting it all in such a way that all racing teams are agreeable to it.

With Russia and New Jersey expected to be added to the calendar in 2014, and Austria set to return as a venue after 11 years, Ecclestone, who draws up the schedule himself, is struggling with dates. The teams would prefer the total number of races not to go over 20—it’s currently 19. The addition of the new venues would take the total number of races to 22. In this jostle for space, the Indian GP could become a victim.

A spokesperson for Jaypee Sports International Ltd, which organizes the Indian GP at the Buddh International Circuit, said it has not yet received any official intimation from F1 indicating any changes and that since the contract runs until 2015, it is keen to hold the races. Any problems will be sorted out, said Askari Zaidi, senior vice-president (corporate communications).

This year’s race is scheduled for 25-27 October. Negotiations are on to move the Indian race earlier in the season, along with some of the other Asian venues. The Malaysian GP in Kuala Lumpur and the Chinese GP in Shanghai were the second and third races of this season, held in March and April, respectively. The Singapore, South Korea and Japan GPs are held between September and October.

If that happens, then holding the 2013 edition in October and the 2014 edition in the first half of the year, so close to each other, may not be economically viable.

“With Russia in the calendar, it might make sense to slot India with Malaysia and China," said Vicky Chandhok, president of the Federation of Motor Sports Clubs of India (FMSCI). “It’s impractical to afford two races in the space of three-four months. So instead of running both years, they may choose to run only in 2015."

2010 F1 racer Chandhok declined to speculate. “It’s been widely reported as tax issues, but there is also a scheduling problem. If it’s to be done early in 2015, then one of the options is not to do it in 2014," he said.

The five-year contract with Jaypee then will automatically extend to another year, until 2016.

The Indian GP was the subject of much discussion at the Hungarian GP (26-28 July), reports Reuters.

“It would be a pity if for these (tax) reasons we don’t go there," F1 team Sauber’s Indian-born principal Monisha Kaltenborn told the agency.

“India is an important market for partners who are already in Formula 1 or who could get into Formula 1 because of that market, so it really would be a pity if we would not manage to sort out these problems," she added.

The teams are particularly concerned this year because the Indian government wants to tax the teams on the basis of their revenue rather than profit, said a person familiar with the development, who did not want to be identified. The first race in 2011 had also run into trouble initially after the government said it would impose import duty on all racing equipment.

“I think the promise that the inaugural race brought in 2011 wasn’t lived up to in the following year and we’ll have to see how things go this year," said Narain Karthikeyan, who raced in F1 in 2005, 2010 and 2011, over email. “There were some difficulties with respect to taxation and other bonds on the cars and equipment which the teams were obviously not too happy about, considering the extent to which F1 benefits the local economy and global exposure. But somehow, the local effect has remained limited even though the Jaypee group has done more than enough to promote it. The whole thing might be proving too expensive to run in terms of rights fee and so on. It would be a real shame if it’s axed after so much effort in all fronts."

But FMSCI’s Chandhok expects the matter to be resolved quickly between F1 and Jaypee, and fresh dates to be announced shortly.

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Published: 29 Jul 2013, 02:23 PM IST
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