"India's 1st private airport to come up in Bangalore"

Friday, September 5, 2003

India's 1st private airport to come up in Bangalore
By P Vaidyanathan Iyer in New Delhi
India - Rediff


The decks have been cleared for the first private airport in India with the
finalisation of a concession agreement between Bangalore International
Airport Ltd and the Airports Authority of India Ltd.

According to senior finance ministry officials, the private operator will
share 4 per cent of the gross annual revenue with the AAI every year of the
concession period. 

The concession agreement provides for a 30-year lease of the airport to a
Siemens-led consortium. The lease is renewable for another 30 years after
expiry.

Siemens Project Ventures GmbH of Germany holds a 40 per cent stake in BIAL,
with Larsen & Toubro and Unique Zurich Airport holding 17 per cent each. The
Karnataka State Industrial Investment and Development Corporation and the
AAI hold 13 per cent each in the company.

Civil aviation ministry sources said the freezing of the concession
agreement augured well for the financial closure of BIAL. Lenders to the
project will be on board in the next 2-3 months. ICICI Bank was likely to be
the lead lender for the Rs 1,300 crore (Rs 13 billion) project, they said.

The sources said the concession fee concept, as put in place for BIAL, would
set a precedent for other private and greenfield airports being proposed in
Hyderabad and Goa.

They said the agreement provided for a sunset clause, wherein the government
would not compensate for certain breach of contracts after the initial
30-year lease.

Initial estimates made by AAI and BIAL suggest that in the first phase the
greenfield airport would cater to 4 million passengers including one million
international passengers.

The airport would handle about 100,000 tonnes of cargo a year.

The existing Hindustan Aeronautical Ltd airport in Bangalore caters to 2.5
million passengers and 25,000 tonnes of cargo. Once the greenfield airport
is ready, the existing HAL airport would be used by HAL for defence
purposes.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dc/dcboard.php

*****************************************