The Hindu Business Line : GMR begins work on Hyderabad airport project

Grand vision
Phase I of the project to be completed by the first quarter of 2008 at Rs 1,760 cr
Phase I will have capacity to handle about 7 mn passengers; will go up to 40 mn passengers after the entire project is wrapped up
Runway will be 4,260 metres, making it the longest runway in India

Shamshabad (AP) , May 17

Barely a year ago, it was a dry and rocky patch of land. Today, the 5,000-acre land at Shamshabad, about 22 km from Hyderabad, in Andhra Pradesh, is mostly flat.

Huge construction cranes and heavy-duty construction equipment work at a frenzied pace, as engineers and workers hop from one work site to another.

About two years from now, the place will be transformed into a sprawling international airport, which will be able to accommodate wide-bodied aircraft like Airbus A-380s.

In fact, the GMR Hyderabad International Airport, being developed by GMR Infrastructure Ltd, will be more than just an airport.

"We want to develop it as an airport village, with hotels, malls, theme parks and restaurants, besides the airport. When these facilities are fully developed, the revenue from the non-aero stream will be as much as 65-70 per cent," Mr G.B.S. Raju, director of the group, told a visiting team of presspersons from Mumbai.

First phase

After the first phase of the project is completed by the first quarter of 2008 at a cost of Rs 1,760 crore, the existing airport at Begumpet will be closed down for commercial operations and the entire traffic diverted to the new facility.

The first phase of the airport project will have the capacity to handle about 7 million passengers, which will go up to 40 million passengers after the entire project is wrapped up.

Says Mr Madhu Terdal, CFO of the company: "At present, the Begumpet airport handles four million passengers. We expect to handle 6.5 million passengers and one lakh tonnes of cargo in our first year of operation."

The first phase of the project will consist of a single runway, a passenger terminal building and a cargo terminal building.

The runway is planned to be 4,260 metres, making it the longest runway in India — its width will be 75 metres so that it can accommodate the wide-bodied aircraft used by airlines like Emirates and Lufthansa.

Subsequent phases

"As per the terms of our concession contract, we are required to construct a second runway when traffic volume exceeds 15 million passengers a year and at this point, the terminal building will be expanded in modular fashion to accommodate up to 20 million passengers.

In subsequent phases, a second terminal building, capable of accommodating another 20 million passengers, will be set up," Mr Raju said.

The company expects to earn a revenue of Rs 400 crore in the first year of operation, based on the revenue earnings of the existing Begumpet airport and growth projections.

This will include the aero charges such as landing charge, handling charge and user development charge, apart from non-aero revenue such as cargo handling, aircraft maintenance and commercial projects.

GMR is going by a well laid-out time schedule.

Having completed site preparation work last month, the company plans to complete the shell of the passenger terminal building, air traffic control tower, a majority of the runway work, fuel farm and retain concessionaires in the current fiscal.

Other plans

Mr Raju said the company would be looking at other airport development projects in India and abroad.

GMR Infrastructure, which has interests in road and power projects as well, has filed a draft red herring prospectus with the Securities and Exchange Board of India in connection with its proposed initial public offering.

The total capital contribution to the first phase of the airport project is estimated at Rs 238 crore, out of which Rs 135 crore has already been infused as of March 31, 2006. The rest is proposed to be funded out of the issue proceeds.

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