Mercedes have been given a special dispensation to supply engines to the former Honda Formula One team this season, Force India owner Vijay Mallya said on Monday.

The Indian billionaire, whose team are also powered by the German manufacturer and could have objected to them supplying other rivals, added in an interview with Reuters that he expected 10 teams to be back on the starting grid in Australia on March 29.

"Under the FIA (International Automobile Federation) regulations, an engine supplier can supply two teams," Mallya said. "So logically that would have been Mercedes supplying (their partners) McLaren and Force India.

"The FIA, I believe, have given special dispensation to Mercedes to supply an engine only to the former Honda team for one year.

"I'm quite happy to just accept that in the interests of the sport because we've had one team disappear from the grid, Super Aguri in 2008, and I'd hate to see another team disappear in 2009.

"If Honda, in whatever new shape or form, can remain on the grid in 2009 then it's good for the sport of Formula One."

Speaking by telephone from his team's first test of the new VJM02 car at the Jerez circuit in southern Spain, Mallya said his understanding was that Honda would remain in the sport under a new name.

"It isn't as if it is disappearing, which is very good news," he added.

COST CUTS

Mallya, a billionaire whose Kingfisher beer and airline brand appears prominently on the car, said his team had not been immune from the global credit crunch and welcomed cost-cutting measures agreed by the teams and governing FIA.

"We have to make sure that we are tight and manage our cash well," he said, when asked about the stability of the team's funding.

"We had several commitments for sponsorship for 2009, some of which will not come through because of the recession. Others seem to be on track, people have confirmed to me that they still want to go ahead.

"There is no point in anybody denying the fact that there has been a great economic meltdown and Formula One is bound to be affected," he added.

"That's why I completely support and welcome these major cost reduction initiatives that are now being taken."

Mallya said Formula One had yet to reach anything like the popularity of cricket in India but local companies were expressing interest.

"Indian companies are coming forward slowly, there isn't a line outside my door, but they are coming on board," he said.

"I have had commitments from a much larger number than I believe will actually show up on the car finally, but in these economic circumstances that is only to be expected."

The team owner, who took over from the departed Colin Kolles as principal last season, expected Italian Giancarlo Fisichella and German Adrian Sutil to score regular points this season after failing to score in 2008.

"Regular points is something that I absolutely insist on and I think the whole team knows it," he said.

"Having said that, I don't think we can expect miracles early in the season. I don't expect the car to go out in Australia and score points in race one but...by the time we get to Europe there is no reason why I shouldn't be expecting being in the points."

The season starts with four long-haul races before the first European race in Spain on May 10.

Mallya said the first signs from Jerez, despite steady rain on Monday, were encouraging.

"Fisichella did 52 laps today and I thought put in some decent times. For a car that's straight out of the box with no performance setup or anything, I think the timings are pretty impressive," he said.