New Delhi is set to host a grand prix in 2009 after the Indian Olympic Association announced a preliminary deal with formula one boss Bernie Ecclestone. IOA president Suresh Kalmadi confirmed at a news conference that the agreement was conditional on having a venue approved, and that a suitable location around New Delhi is being sought.

In a letter to Kalmadi, Ecclestone said: “I am writing to confirm the basis of our common understanding on the way forward to bring to fruition our shared aim that a Formula One Grand Prix of India event be staged as a round of the FIA Formula One World Championship.”

Formula One reported that the plan gained traction after India opted to build a track near New Delhi rather than push ahead with their original plan for a street race; F1 obviously worried about the competition New Delhi’s tuk tuks would give to the McLarens and Ferraris. The IOA is set to promote the race and money will be raised through the government or private funding, giving the Indians 24 months in which to raise the money and construct the track, not exactly an easy task.

Indian officials are no doubt looking at the benefits that a marquee event like a grand prix can bring to New Delhi. As Kamadi stated, “There will be big bucks and that would be diverted back to the Olympic sports and to the National Federation and to the State Olympic Associations.” But none of this is going to come cheap. At least 600 acres of land is required for building the F1 circuit, the cost of which is likely to run into the hundreds of millions. The Shanghai track and related infrastructure cost upwards of US$1 billion to develop.

In China, the man who pushed through the plans and subsequently became the general manager of the international speedway, Yu Zhifei, was recently fired after being caught up in the Shanghai pension fund scandal. While it is unlikely that such a scandal will tarnish any Indian attempt, and the cost of a track is expected to be about a third of the Shanghai circuit, the challenges remain.

According to the Guardian, should the Indian grand prix organizers meet Formula One’s demands, the race would become the fifth new venue to be added to the calendar in recent months. Valencia and Singapore will hold races for the first time in 2008, while Abu Dhabi will enter the fray in 2009 followed by South Korea a year later.

Asia currently hosts four Formula One events;  in Malaysia (Sepang International Circuit in Kuala Lumpur), Bahrain (Bahrain International Circuit in Sakhir), Japan (Fuji Speedway in Oyama) and China (Shanghai International Circuit in Shanghai).

This entry was posted on Monday, June 18th, 2007 at 3:06 pm and is filed under Business, Investment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.