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FEBRUARY 12, 2005

Time is the question for an Indian F1 deal

It does not take a rocket scientist to work out that with Narain Karthikeyan in an Formula 1 car this year, albeit at the back of the grid, there will be increased interest in Formula 1 in India. However, translating that into a Formula 1 Grand Prix is quite another matter as F1 found out last year when it tried to put together a deal to run a race in Bangalore. The government of the state of Andhra Pradesh had a plan all ready but the defeat of the state's chief minister resulted in the whole idea being axed. Other states are now looking for the money to put together projects but finding money is hard particularly when the long-term future of Formula 1 is so uncertain at the moment. The investment necessary for a Grand Prix is around $20m a year (probably more) and that is without the cost of the new infrastructure that needs to be built. Governments are willing to come up with this sort of money if they can be convinced that they will make money in the long-term with the influx of tourists and new business which F1 claims to bring. However, the Formula One group has to be careful not to make commitments which it cannot fulfil (that might lead to expensive litigation at a later date) and so negotiating such deals is not going to be easy.

Assuming of course that the locals are aware of all that is going on in F1 at the moment.