GVK Power & Infrastructure Ltd has added another feather in its cap with the commissioning of the new terminal at Mumbai’s Chhatrapati Shivaji International Airport.
It now plans to make it an Aerotropolis, adding commercial space, hotels and a convention centre.
G.V.K. Reddy, Chairman of the diversified infrastructure company, is proud of the manner in which his team executed the expansion project. The team faced several challenges, including lack of land and having to work without disrupting ongoing airport operations.
After a tour of the swanky new terminal, Reddy settled down near a cascading fountain, pleasant music playing in the background, for an interview. Edited excerpts:
T2 — how does it feel?
We are extremely happy that we have completed the Rs 5,500-crore project, which is part of the overall investment of Rs 12,500 crore we have made in the airport since we took over.
There have been innumerable challenges during the course of execution. About 1,000 acres of the 2,000 acres allotted were occupied. In the end, we are pleased with the way the airport has turned out. We hope Mumbaikars and all those who use this have an enjoyable experience.
Among your various divisions, the airport vertical has been profitable. Why are you then looking at divesting a stake?
The airport vertical has been profitable both in Bangalore and Mumbai. Having completed T2, we are now in a position to have better valuation of the airport vertical.
When we increased our stake in the Bangalore and Mumbai airports, we had borrowed money. We are keen to reduce the Rs 2,500-crore debt.
The airport vertical is in the process of consolidation. We will have capacity for about 45 million passengers a year in Mumbai, up from 30 million now. In Bangalore, we will increase capacity to 20 million and later to 40 million within 3-5 years.
What about the Navi Mumbai airport?
We will exercise the first right of refusal for the Navi Mumbai airport project when it comes up for bidding. The airport may come up for bidding during the year.
Will you bid for upcoming airport projects?
At least six new airports are coming up for bids. Of this, we can bid for only two and will certainly exercise that option. These include Chennai, Kolkata, Guwahati, Ahmedabad, Jaipur and Lucknow.
How do you plan to handle encroachments around the Mumbai airport?
The rehabilitation of people living on about 330 acres will be addressed in co-ordination with the Government. Of the 85,000 families, so far 18,000 have been covered. The rest will also be covered.
You are in the process of monetising some assets. What is their status now?
We have the right to monetise 10 per cent of the 2,000 acres we have been allocated (for Mumbai airport).
This zone will be referred to as GVK Skycity. It will have hotels, malls, entertainment centres and a large convention centre.
We have invited tenders for the development of the commercial zone. They will be finalised within three weeks.
You have fixed issues with the airports vertical. What about the power sector?
The country’s power sector is in a shambles due to delays in clearances and inadequate supply of fuel to run projects.
In the case of gas projects, the Government had promised to supply gas and it has failed. We are entitled to fixed costs.
The other option is to use costlier fuels — liquefied natural gas, naptha or diesel — and generate and claim higher costs. The Government is not willing. Hope things will get better.
rishikumar.vundi@thehindu.co.in