A project report On

Evaluation & Scope of Projects like, Buddh Formula 1 Racing Circuit in India By Shankar Mohan Singh

Project synopsis report submitted in partial fulfillment of the requirements For the degree of Master of Business Administration of Sikkim Manipal University, INDIA

INSOFT, C 2 SECTOR 10, NOIDA 201 301 CENTRE CODE 1822

Sikkim Manipal University of health, Medical and technological science Distance Education wing Syndicate House, Manipal 576104

TABLE OF CONTENTS Page No

1. Executive Summary 2. Introduction 3. Problem of the Study 4. Objective 5. Research Methodology 6. Analysis 7. Conclusions 8. Recommendation 9. Bibliography

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1. Executive Summary
From the humble origins, Formula 1 racing was born, and over the years, it has grown to be one of the most popular sports in the world. Formula 1 has grown into a billion dollar industry. It appeals to millions of fans, attracts a huge sponsorship and delivers champions who are as revered as Olympic medalists. Because Formula One racing satisfies our fundamental need -to push technology to its limits and to enjoy, even if vicariously, the thrill and excitement of high-speed travel.

Left to right: Sir Jackie Stewart Rolex Testimonee, Mr. Gian Ricardo Marini CEO Rolex, Mr. Bernie Ecclestone CEO Formula 1, Mr. Jean-Claude Killy, Rolex Testimonee

The sport has developed a global following in the last two decades largely thanks to television coverage. Many fans travel to races to mix tourism with a racing experience. Formula 1s mercurial owner, Bernie Ecclestone, is investing heavily in the sports return. It was like a dream come true for Indian Formula 1 fans when this billion dollar spots industry marked its appearance in India on 30 October 2011. Thanks to Gaurs of Jaypee Group who produced a world class formula 1 racing circuit Buddha International Circuit in India and brought India on the map of Formula 1s world. President of the Federation of Motorsports Clubs of India (FMSCI) Vicky Chandhok is the other person who played a key role in bringing Formula 1 to India and gave Indian fans for what they have dreaming fro decades. The sport is huge money spinner having turnover in billions, sufficient to run small country economy. The CEO of Formula 1 Bernie Ecclestone has shaped Formula 1 into the world's richest sport

2. Introduction
The 5.14km long Buddh International Race Circuit has been designed by renowned German architect and racetrack designer, Herman Tilke, who has also designed other world class race circuits in Malaysia, Bahrain, China, Turkey, Indonesia, the UAE, South Africa, South Korea and the US.

The Buddh International race track has been designed as one of the fastest, most exciting circuits in the world and were sure that both racers and race fans will like the circuit layout. F1's newest showpiece, Buddh International circuit, is well-suited to the requirements of powerful, high-spec racing of cars and motorcycles. After successfully hosting the inaugural F1 Indian Grand Prix on October 30, 2011, BIC will soon host some of the most challenging motorsport events on the planet. The name Buddh International Circuit has been chosen with refere nce to the area where the racetrack is situated Gautam Budh Nagar (near New Delhi, Indias capital city). Because of its location, naming the circuit was given name as Buddh International Circuit.

Established in October 2007, Jaypee Sports International Ltd is a subsidiary of Jaiprakash Associates Limited (JAL). It has developed Indias premier motorsports destination Buddh International Circuit BIC) at Greater Noida, near India's capital city New Delhi. BIC hosted Indias first ever F1 Grand Prix in 2011 to a full house. It came in for praise from F1drivers and other team members for being among the fastest and most challenging race circuit. JPSI, and its MD and CEO Mr. Sameer Gaur, have got several national and international awards for the hugely successful conduct of the F1race. In addition to F1 BIC will also host some other top-level international motorsport events such as GT1 Championship and World Superbike Series. The circuit immediately established itself as a favorite among the drivers when it made its debut on the calendar last year, drawing comparisons with Belgium's popular Spa-Francorchamps. The estimated investment it the project was $400 million dollar, the Jaypee Group is having high hopes from this project. The Project will not only provide international exposure to Jaypee Sports International Limited, On the part of the revenue BIC is expecting to continue hosting high quality motor sports. The main contributor towards the revenue generation is the sale of tickets. The stadium has 125,000 seats. The ticket slab are start from rupees 2,500 and can go up to 50 lakhs. After the grand success of Formula 1 race in India the group is expecting high growth in revenue. The Buddh International Circuit itself can hold around 150,000 spectators and despite the fact that a ticket costs the equivalent of a month's wage for India's poorer citizens, the inaugural Grand Prix was well attended and it is expected to grow further for future events. The success of this project will encourage, companies in India to venture in such large project with huge investments.

3. Problem of Study Scope of Project

Since the project involves mega budget the evaluation and study of scope is necessary, to find if the country is prepared for such mega budget projects or not. In spite of having most of the odds against and the greater challenge in front of owners, it is commendable the outcome they produced. The first Formula 1racing was grand success in India; it also saw the attendance of viewers more than 100,000. The world class quality produced in short span of time was commendable. After the grand success of first two editions of Indian Grand Prix this project has silenced the critics to an extent. The Indian GP boosted the economy, as it saw major boost in hotel industry. The hotel charges in Delhi and NOIDA were increased by 50% to 80% during the event. Travel and transportation services also made merry, while there was huge consumption increase for food and beverages. The formula 1 motor sport is huge money spinner and it is expected to bring more money in future. The assumption for revenues from F1's commercial rights will reach $3.3bn in 2016, according to a report by Formula Money with sponsorship in 2011 returning fast. The research, based on data contained in the new edition of the annual Formula Money report, predicts that revenues for the sport's commercial rights holder, the Formula One Group, will rise at a rate of 12.7 percent a year reaching $3,253m in five years' time. Buddh International Circuit project was questioned as it was build keeping in the mind of Formula 1 Racing where Indian presentation is very less. There is only one Indian Team Force India co-owned by Dr. Vijay Malya that too has all foreign drivers. The only Indian driver who features in Formula 1 race is Narain Karthikeyan who drives for HRT. Seeing the response of first two F1 races experts are very much hope full about the success of such projects. Motor sport will develop in India; however, it will take time, Dr. Malya in an exclusive interview quoted F1is not short term project, he gave example of champion team Red bull and the progress they made in 7 years. The other countries like Malaysia and China have already ventured into Formula 1 race business. Most of the countries see it as investment to boost their tourism sector more than the sporting activity and indeed it does help in generating revenue in foreign currency as sport is having global presence and fans and followers in large numbers who travel across the globe for the love of sport.

Economic Activity
The project started with a mega budget of $400 million dollar. It had a great impact upon the economy. It brought India on the map of global motor sport, which is considered to be the biggest money spinning sport in the world according to study conducted, the popularity of the sport can be measured by the fact that it had television viewers of 527 million Formula One world championship. Formula Ones economic effects and creation of jobs are significant, and its financial and political battles are widely reported. Its high profile and popularity make it a merchandising environment, which results in great investments from sponsors and budgets in the hundreds of millions for the constructors. Critics may question this project as the cost of the project is very high the track alone cost around $120 million and the operational cost of the circuit is $15 million to $20 million. Apart from the huge investment that Budhh International project has incurred, it is delivering rich dividends. The huge success of inaugural Indian Grand Prix which was full house already indicated the future of such projects in India. It has helped India gaining revenue from foreign countries. It will also give India exposure to high technology.

The Site
Buddh International Circuit is located in Greater Noida in the outskirts of Delhi. Greater Noida falls within the National Capital Region of Indias capital - New Delhi and is adjacent to Noida, one of the largest industrial townships in Asia. It is located 40 kilometers (25 mi) to the south-east of New Delhi and 20 kilometers (12 mi) southeast of Noida. The Government of Uttar Pradesh then decided to incorporate the city of Greater Noida, as an extension to Noida, but with better planning, incorporating the lessons learned from the Noida development. The place is a perfect location for Budhh International Circuit as it takes only about 2.5 hours of road travel from Delhi making it easier even for fans of formula 1 coming for outside of the country for the love sport. Connecting the city to Agra is Yamuna Express way a six lane express way which was formerly known as Taj Expressway.

The circuit is part of the 2,500 acres (10 km2) Jaypee Greens Sports City, Greens Sports City home which also includes a 100,000 seat cricket stadium, 18-hole golf course, 25,000 seat field hockey stadium and a sports academy have been planned. The sports complex is expected to cost 40 billion ($820 million) and generate $170m of revenue annually, and employ 10,000 people.

Future of Formula 1 Race in India

The first Grand Prix in motor sport was held in Le Mans, France in 1901. Formula 1s roots, however, lie in the European Grand Prix Motor Racing that became the rage in 1920-30. After Second World War, the Federation Internationale dAutomobile, the global governing body for motor racing with 213 member nation, was formed in 1946. And the first F1 world championship was held in 1950. Worlds rich and stunning motorsport piece, Formula One World Championship race was initially staged in India, 2011 October and successfully made the event and they are awarded the 'Motorsport Facility of the Year' award at the Professional Motorsport World Expo 2011 at Germany.

The sport is widely popular in European countries; in India it had great inauguration in year 2011regestering attendance of more than 100,000 thousand. However, the sport is still trying to make its way to Asia. Most of the Asian countries including India are developing nation, it would be interesting to see, if they are ready for a sport which demands high investments. Costs and logistical constraints may come in the way of India's Buddh International Circuit (BIC) as the fact that most teams on the gird are Europe-based. Teams use road for transporting equipment during the European races while they send most of the stuff by air during the Asian and American rounds. Despite the fact doubt the whether in India is a lot better than the snowy conditions Europe, but the cost involved is something most teams are not ready for.

Indian Presence at Formula 1

When it comes to the sports presence, India has only one driver formula 1driver Narain Karthikeyan who is driving for HRT. However, there is one Indian Team by the name of Sahara Force India which co-owned by UB group owner Mr. Vijay Malya. Sahara Force India Formula One Team is one of just 11 competitors in the FIA Formula One World Championship. The cars incorporate the colors of the Indian flag and the team is a sporting representation of the emerging generation of young, apparitional Indians, and the growing strength of India as a nation. The Sahara Force India team was born in late 2007 after Dr Vijay Malya, Chairman of Indias iconic UB Group and Kingfisher Airlines, joined forces with the Mol family, the co-owners of what was then the Spyker team.

Infrastructural Development
The projects like BIC boost infrastructural development in the area. It has encouraged the urbanization of the area. It is sign of fast developmental growth of the area. With infrastructure giant like Jaypee Group entering in the area, they can take the development to whole new level. The Jaypee Group is a conglomerate based in Noida, India. It was founded by Jaiprakash Gaur which is involved in well diversified infrastructure conglomerate with business interests in Engineering & Construction, Power, Cement, Real Estate and Hospitality. The project BIC has improved the interest of the people in considering Greater Noida as residential place. The other industries have also acknowledged the development in the area and now they are seeking this as an opportunity to grow their business and moving their business to the town.

Such Mega projects not only require big budgets, they also required enhanced technology in order to finis the project on time. The Mega projects like BIC can not be accomplished without the use of high technology in other words; these projects also introduced high technologies to this area in order to boos the urbanization at fast pace. The urbanization of the area is helping in improving the quality of life of the people living in the area as they get to enjoy world class facility. The service level and quality of various important services such as hospitals and educational institutes has improved to great deal. The urbanization always attracts investment from company which will mean consumer will have more option and better quality of service.

Trade and Tourisms

The Buddh circuit has been built as a flagship development for a bigger project: a new town with a population of several hundred thousand, which will have malls, sports and education facilities, and will sit astride a new motorway linking it to Delhi, 32km away, and Agra, 190km away. The Buddh International circuit has brought, boost to the tourism and trade both as it has increased the number of foreign visitors who come follow the Formula 1 race. The world class architecture and the facilities available at the circuit give fans run for their money. The hospitality sector has gained a lot from the projects like Budhh International Circuit. Because of the number of event this circuit is hosting, they getting increase numbers of foreign visitors. Hospitality sector will improve their status, as the auto-racing events might bring in great effects of tourism into the country. It promotes the country not only as one of the tourist attraction but will also attract sport lovers from all over the world. Hotel industry is expecting growth in their business as the people who come to watch events like Formula One try to find accommodation in near by location. It is also generating business opportunities for other sectors related to travel and transportation. The teams carry their own machines and equipments while venturing in such competitions which require good and fast moving transportation facilities. Hotel and the hospitality industry will benefit greatly from Formula One Entertainment as they would provide accommodation and food for their staff. The number of visitors expected to increase as the BIC is all set to stage Superbike World Championship (WSBK) in 2013. Increase number of events will definitely boost the foreign currency inflow to the country and will help to build and promote Indian tourism Industry.

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Environmental Effects
Despite all the benefits from the BIC, there are several undeniable impacts it has on the environment. The new development will mean more pollution issues. The population are concerned that their health will be jeopardized by there recent increase of development. The motorsport adds to air and noise pollution as the roaring sound of the engine creates noise pollution, as result you may find most of the people watching formula 1 race in circuit wearing ear plugs. And this is a life threatening sport as cars run at alarming speed at which accident can easily take place jeopardizing the life or car drivers and others.

Cultural Effects
The development projects like BIC have changed the environment from agriculture base to new developed town. The state government has taken land from framers for this Mega project, which is a part bigger infrastructural development in this part of the state. The development has produced both employment and unemployment. Even though there are a lot of job opportunities since so much of development has happened, people facing challenge as they have re-skill themselves.

Developments in area, which once lack of modern facilities has offered more schools for the childrens education, better hospital facilities, and more job opportunities. With the area getting international exposure more and more companies willing to invest in land here. Real estate business in the area has really picked up the pace as the rate of the land moving up high, creating business opportunities, as more and more people willing to invest in land here. Most of the Formula 1 fans are from western countries and the Indian will get too much exposure from the western cultures and values. This does not imply that the western cultures and values are negative but rather does not fit into the way of life of the Indian cultures. This might created what is called the generation gap between the younger generations and the older generations as the younger generations are influenced by western cultures while the older generations are by the traditional Indian cultures.

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The Controversy
The disparity between headline-grabbing projects such as the Buddh circuit and the poverty that surrounds them has been well documented. But the myriad conflicts generated by the transformation of India are heard about less often. The track has been greeted with fanfare in journalist and sporting circles, and with legislation and protests elsewhere. Public-interest litigation was filed against the government of Uttar Pradesh, the state where the complex is located, and the Jaypee Group. The PIL claimed that because Formula One is an elitist sport, the state government has no right to exempt Jaypee from paying entertainment taxes, alleging that the exemption was granted only because the company is very close to the political leadership. In order to construct the circuit, the lands of some three hundred farmers were purchased by the state government. However, in August 2011 three months before the inaugural race the farmers in question expressed dissatisfaction with the project and threatened to dismantle the circuit "with force if necessary", demanding more money and stating that they felt the land should have been zoned for industrial estates to generate more employment in the area. Meanwhile, farmers on whose land the circuit now stands continue to protest. The land was bought by the state government in 2007 for the development of roads and industry. Farmers complained they had not received the compensation or jobs they were promised. Bhatta-Parsaul made headlines in the summer when police attacked farmers who had been protesting about the compulsory purchase of their lands by the government of Uttar Pradesh. Allegations of police brutality and violence provoked by land disputes are commonplace. This is particularly true on the outskirts of cities where exploding populations, growing wealth and rampant property speculation combine with repressive colonial-era laws and corrupt officials.

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4. Objective
The objective of the study is to evaluate the project and check the feasibility of such mega budget project and to see if India the country which is still going through economical reforms and the county which having high Power Distance Index is ready for such mega budget projects. The study focuses upon the scope that project such as Buddh International Circuit carries. It takes upon the Formula 1 motor sports, potential for generating revenue and its scope in India. It also takes on its impact of economy and revenue generation. The number of business and employment opportunity it provides. Also take on its impact on the tourism industry in India and other sub industry in India. Bearing the fact in min it provides excellent international exposure for India as the sports is banking upon huge media coverage. It is having such a large viewership which only considered second to Olympic. Formula One can be seen live or tape delayed in almost every country and territory around the world and attracts one of the largest global television audiences. The 2008 season attracted a global audience of 600 million people per race. According to the reports year 2011 saw global viewers 515 million. The precise figures for year 2012 are not available. However, there seems to be decline in the number of viewers for year 2012. The study also takes a look at the Indian representation at Formula 1. The only Indian Formula 1 driver Narain Karthikeyan who drives for HRT in an interview said it is very difficult to break in to Formula 1 circuit. However, the future of this sport is bright in India as, people in India have more knowledge about the sport unlike China where it is limited to Shanghai only. The Indian Team Force India performed well in the both the edition of the Indian Grand Prix. However, the performance was better in the inaugural Grand Prix. The study also focuses upon the F1s impact on culture, environment and controversy related to the BIC project, the controversy which created political issues in the territory.

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5. Research Methodology
The research form used in the project is Exploratory. It is based upon the study of fairly new subject Formula 1 Racing Circuits in India. It explores this subject in order to find the feasibility and scope for such mega budget product with and endeavor to improve knowledge about the Formula 1 sport and the opportunity it posses.

Research Design
The major portion of this research design consist of the study of Concerning Literature and Analyses of Insight Stimulating Examples

Sampling
Sampling used for preparing this report are Purposive or Judgment Sampling Convenience or Accidental Sampling and Quota sampling.

Source of Data
The major portion of this study is formed by the secondary source of data. The data for developing the report is dominantly secondary in nature. Primary data is used; however, the use of primary data is significantly less in comparison to secondary data.

Observation
The observation methods used are Non Participant Observation and Indirect Observation

Interview Method
Interview method applied for the study Focused Interview Telephonic Interview and Group Interview

Report Type
The report type used is Popular Report it focuses on the outcome and ideas related to projects like BIC and future of such mega budget projects and future of sports industry in India.

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6. Analysis
On the analysis of the sport we can find that Formula 1 is money draining spots, it requires large budget as an average formula one car can easily cost around $100 million dollar. On the contrary it has huge fan following, the sport is one the richest and one the viewed sports of the televisions, having viewership in hundreds of millions, making it big money spinning sport. According to sources the revenue generated by F1 from commercial right in year 2010 was an astonishing amount of $1.587 billion, which is expected to grow further in future. The sport promises to be the huge money spinner. The analysis of the BIC infrastructure and the world class facility it contains, one can say this is a worth project. BIC has successfully hosted the Indian Grand Prix twice and received and accolade from international fraternity. The CEO of F1 Mr. Bernie Ecclestone has already acknowledged BIC as one the best racing circuits of the world. The investment and operational cost analysis of BIC projects shows that it requires mega budget and the operational cost of the circuit is also very high which is almost around $15 million to $20million per year. The state of art and world class facility of this circuit makes it suitable for events, which are very necessary for preventing it from becoming white elephant. The circuit is also about to host World Superbike Series. The analysis of impacts of BIC it has some positive and some negative impact. It has really boosted the infrastructural development in the area. The events like F1 race giving India Global exposure and thereby giving Indian tourism and hospitality industry a chance to grow further. The Formula 1fans follow this sport from across the globe and most of them are wealthy and ready spend for luxuries. In that way project BIC has opened gate for foreign currency inflow. The projects also have some negative impact also it started on the land bought from farmers, which created controversy later and became big political issue, apart from this the owner group also came under scanner for tax exemption. This project was also seen as threat to environment as it causes both air and noise pollution. BIC has been successful in hosting two of the mega event it has also given India a great recognition on the global world motor sport map. It is also creating employment and business opportunities.

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7. Conclusion
The grand success to first two event hosted by BIC in spite of having bigger challenge in front of them has definitely made this project a worth. BIC has incurred a huge investment also the sport it going cater demands huge investments. The amount of money involved in Formula 1 racing is sufficient enough to run the economy of small country. A country like where people still struggle even for basic amenities, such huge investment was a big risk. The Gaurs of Jaypee Group took the risk and brought India to the map of global motor sport. The big question was if the country was ready for such mega projects with high investments that too for a sport in which they do nt even have proper presentation. The Indian audience took the event in very positive, the opening response to the Formula 1 event left encouraging signs. The more positive signs encouragement came as most of drivers were all praised for the circuit and the CEO Bernie Ecclestone also praised the circuit and said it one the best in world. There were few controversies with the projects; the major one was regarding the land acquisition for the project. The land was bought from farmers by state government in year 2007 which created a controversy later and became political issue. The tax exemption also created a buzz of controversy. Few alarm for the environment were also raised. Farmer protested for against the land acquisition. After all the controversies none can deny the impact it created on the development and urbanization of the area, it has also created business and employment opportunity in the India. Given boost to the tourism sectors by hosting event like Formula 1 Grand Prix which followed large number of tourist in India. The founder of Jaypee Group Jai Prakash Gaur said that venturing into F1 was challenge for them, he asked his sons take it as a challenge and build best track in the world that wipe out all the shame of Commonwealth games. Indeed so far the project has lived up to its expectation; it has already got national and international accolades. Making signs of encouragement for such mega budget projects in India.

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8. Recommendation
Buddh International Circuit project is successful project. It is expected to boost the economy of India. The success of this project will encourage the initiation of such mega budget projects. Following are some recommendation for such projects 1- Such project needs to take step for promoting motor sports among the Indians. 2- Providing them training and knowledge about the sport which will help in increasing interest related to this sport and encourage more attendance during the event. 3- They need to organize training sessions in order to make the root of this sport deeper in the country. 4- Long term planning needs to be laid out as it takes time to make mark in Formula one circuit. 5- They need to improve the utility of the BIC in order to cope with the huge operational cost, so that the project does not prove to be white elephant. 6- Project need to provider employment to the localities which will create sense of good will, and improve the image of such projects. 7- Location selection should be done very carefully, while choosing the land for such projects. Acquisition of Controversial land must be avoided. 8- Agriculture is still one of the prime occupations in India; fertile lands must not be compromised for such projects. 9- It would be great if the land which is not of great value, in terms of agricultural utility, utilized for such mega project this will not only boost development but also give options of employment to the people living in near by area. 10- Such mega project should follow green culture, they must plant trees to compensate the environment, help reducing pollution and green environment give pleasing effect to the viewer. 11- Such mega project must follow all the safety guidelines, ensuring safety measure if the area falls in seismic zone. 12- The site of such mega project should be as which easily reachable, people coming to watch mega events can commute easily to destination.

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Bibliography
Reference taken from websites http://en.wikipedia.org/wiki/Wiki http://www.formula1.com/default.html http://www.jaypeesports.com/jaypee-race-circuit.shtml http://buddhinternationalcircuit.in/ http://www.bbc.co.uk/news/ http://www.guardian.co.uk/ http://articles.economictimes.indiatimes.com/

Magazines
The Week Top Gear Zigwheels India Today

News Paper
Times of India Hindustan Times Economics Times Visited Buddh International Circuit

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