‘There are many challenges, including land acquisition'

Hyderabad | Updated on March 12, 2018 Published on May 30, 2012

Mr G.V.K. Reddy , Chairman GVK Group.   -  Business Line

With regard to airport expansion in Mumbai, one constraint is land. Nobody can acquire land these days. One should also understand, this is not a personal or company problem but the responsibility of the Government to find a solution. G.V.K. REDDY, CHAIRMAN, GVK GROUP

Sitting in his office chamber in the majestic Paigah House, one of the palaces of the erstwhile Nizam era, Dr G.V.K.Reddy, Chairman of the GVK Group, is busy strategising the company's next move for the Hancock coal-mine project in Australia that the group had acquired for $1.26 billion last year.

“Several companies are knocking at our doors to be part of the coal-mine located in Queensland's Galilee basin project. As it is promising, it won't be long before you learn about this,” he says.

The Head of the diversified Hyderabad-based infrastructure company is charting out plans for the $10-billion coal-mine project and related infrastructure, which is by far their biggest.

The conglomerate is into power projects, airports, roads, hospitality, particle board manufacture and handling emergency management services, operating a chain of ambulances across various States.

In addition, it has interests in oil and gas, having been allocated blocks and is into biosciences including drug discovery and research through group firms. Always open to buy outs, it has grown combining organic business growth and a string of acquisitions, be it the power sector, airports, hospitality projects and lately coal mines.

GVK has invested Rs15,000 crore in various projects and has a pipeline of projects of over Rs 30,000 crore.

During an interaction with Business Line last week, Dr Reddy spoke about the strides the group is making in various projects.

Excerpts from the interview:

Are you looking at further consolidating your stake in the Mumbai and Bangalore airport projects?

We already have a significant stake in both these projects through the holding company.

(GVK has increased its stake to 50.5 per cent in Mumbai airport and to 43 per cent in the Bengaluru airport.)

Therefore, there is no need to immediately hike stake in them.

How are you planning to take up the Mumbai airport expansion?

Even for the new airport project, we have the first right of refusal.

However, there continue to be several challenges, including acquisition of land. At the existing airport, from about 30-32 million passengers, this could go up to 45-50 million passengers per annum. That is when we will have to put a cap on additional passengers.

We have a constraint for land in Mumbai. Nobody can acquire land these days. One should also understand, this is not a personal or company problem but the responsibility of the Government to find a solution.

The new international terminal will be ready by next year. Then we will have capability to manage about 50 million passengers and with about 50-60 gates.

The new terminal will manage both domestic and international. The old one can be used for general aviation, jets and ATRs. The company is also expanding the Bangalore terminal to handle 17 million passengers by 2015. We have also been approached to develop airports in Indonesia.

What about your power business? How are you expanding this?

We were the first company to set up a private power project in the country partnering with IFC, Washington and GE. Since then we added more projects. However, we have put the gas power project expansion on hold as there is no clarity on additional supply of gas. Even the existing projects do not have adequate gas. And no one knows when the supply will get better.

Therefore, the focus will be on thermal power plants. The recent acquisition of a coal mine will enable us take up about 10,000 MW using up 20 million tonnes of coal.

We also have interests in oil and gas and have a huge area under allocation by the Government. We have partnered with BHP Billiton for the venture.

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Published on May 30, 2012
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