New Hyderabad airport by mid-2008

Tuesday, 21 December 2004, 08:00 Hrs
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NEW DELHI: A new international airport being built at Hyderabad with Malaysian help would be operational by mid-2008 and see investment of nearly 15 billion (over $320 million) in the first phase, the project's promoters said.

Situated 21 km from Begumpet airport in Hyderabad, the new airport is being developed as the nucleus of a commercial hub, Kiran Kumar Grandhi, managing director of Hyderabad International Airport Ltd (HAIL) said.

The announcement coincided with HAIL -- a joint venture of infrastructure major GMR Group, Malaysia Airport Holdings Berhad (MAHB), Airports Authority of India (AAI) and the Andhra Pradesh government -- signing a concession agreement with the Indian government for the construction and maintenance of the new airport.

GMR with 63 percent stake in the project has been entrusted the responsibility for design, finance, construction, operation, maintenance and management of the Hyderabad International Airport Project through the special purpose company HAIL, Grandhi told a press conference.

"The project is proceeding according to schedule. We hope to achieve financial closure by June 2005 and have been given 36 months after that to get the airport operational," he said.

The new airport with modern facilities and better management is expected to handle up to five million passengers a year on completion of the first phase and this capacity is expected to go up considerable with the addition of newer facilities as traffic increases.

Besides the country's longest runway of 4,260 metres and a width of 60 metres to allow for wide-body aircraft, HAIL plans to set up a terminal for the specific needs of low-cost carriers, an airport village for passengers and visitors and a second runway and terminal at a later date.

The 5,400-acre complex is expected to see substantial investment inflow for setting up hotels, convention centres and business parks as well as a railway terminal for passengers and goods in keeping with plans to develop a cargo transhipment hub.

The concession agreement signed Monday comes with an exclusivity contract that no new airport will be developed within a 150-km radius of the Hyderabad international airport in the next 25 years.

"The government has already agreed to closing the existing airport at Begumpet for all civil commercial operations once the new airport is operational," said Grandhi.

In turn, HAIL will pay the central government a fixed concession fee of four percent.

The consortium is looking to raise 60 percent of the proposed 14.18 billion of investment for the first phase through market borrowings, with 40 percent being raised through equity.

It is hopeful of achieving financial closure by the second quarter of 2005.

"Once financial closure has been achieved, we hope to complete the airport project's first phase by the second quarter of 2008," he said.

HAIL has started the tendering process and completed around 85 percent of the construction of a boundary wall around the 5,400 acres of land leased to it by the Andhra Pradesh government at Shamshadbad for 30 years, extendable for another 30 years.

Source: IANS
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