The concession agreement for the Rs 1,300-crore (Rs 13-billion) Bangalore International Airport Ltd is likely to be finalised shortly with the Siemens-led consortium agreeing to most of the demands of the government.

The Prime Minister's Office is slated to review the progress of the project during this week.

According to the Airports Authority of India officials, the consortium has agreed to pay liquidated damages if the construction work is not completed within the stipulated period due to reasons that could be attributed to the consortium.

The government, on its part, has softened its stand on the issue of compensation to be paid to airlines for the termination of bilateral rights after the closure of the existing Bangalore airport.

The only clause that BIAL has not agreed to, as yet, is that of paying a concession fee. The civil aviation ministry was discussing the issue with BIAL, officials said.

Last month, the Siemens-led consortium had said it would walk out of the project on the issues of liquidated damages and concession fee.

The finance and civil aviation ministries held a series of meetings with BIAL promoters to reach a consensus.

The finance ministry had earlier raised objections to various concessions that were being provided to BIAL.

One of them was that BIAL would be compensated if there were any changes in the civil aviation policy that affected the viability of the project.

BIAL was also being exempted from the compensation to be paid to airlines for the termination of bilateral rights.

Now, a formulation is being worked out whereby both the private consortium and the government will shoulder the burden, sources said.

The project has Karnataka State Industrial Investment & Development Corporation as a stakeholder with a 13 per cent equity, the AAI has another 13 per cent while the Siemens-led consortium has a 74 per cent stake.

The consortium consists of Siemens Project Ventures GmbH of Germany, which has 40 per cent stake, while Larsen & Toubro and Unique Zurich Airport have 17 per cent each.

The ministry of civil aviation and BIAL have conducted a number of meetings on the agreement from May last year.

This is the fourth draft concession agreement that the ministry has drawn up.