The Hindu Business Line : `Bangalore airport must open in 33 months of financial closure'

THE concession agreement for construction of the greenfield international airport at Bangalore, which was approved by the Union Cabinet late on Tuesday, makes it obligatory on Bangalore International Airport Ltd (BIAL) to open the airport within 33 months of financial closure, subject to certain exceptions.

Addressing a press conference here on Wednesday, the Minister for Civil Aviation, Mr Rajiv Pratap Rudy, said that the agreement which stipulates that a concession fee of four per cent of the gross revenue will be payable to the Government, will also be applicable for the new airport projects coming up in Hyderabad and Goa. The BIAL concession agreement, it is expected, will be executed shortly, officials said. The BIAL concession agreement also provides for levy of liquidated damages by the Centre for the airport not opening within 33 months of financial closure.

However, the exclusivity clause which states that no new domestic (except Mysore and Hassan) and international airports will be set up within an aerial distance of 150 km before the expiry of 25 years, will only apply to this project, Ministry officials said.

The issue of exclusivity clause for the other airport projects will be decided on a case-to-case basis, officials added. The agreement also states that the existing HAL airport will be closed for commercial aviation.

The Rs 1,300-crore project is jointly promoted by Siemens holding a 40 per cent stake, while Unique Zurich and L&T hold 17 per cent each. Besides, the Karnataka Government and Airports Authority of India will together hold 26 per cent. The project is to be implemented on a Build-Operate-Transfer (BOT) basis with public-private participation.

The concession agreement also states that Siemens will have to hold at least 26 per cent of the paid-up capital for seven years of the airport opening, while Unique Zurich will have to hold five per cent till three years of the opening of the airport.

The agreement also caps the compensation payable by the Indian Government on breach at Rs 100 crore in respect of slots, day-and-night time operations and airport charges.

Meanwhile, the Union Cabinet is expected to take up next week a proposal for improving international air connectivity, the Minister said.

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