First phase of Hyderabad airport by '07

The proposed greenfield airport in Hyderabad will cost Rs 1,418 crore and will be funded through a combination of debt and equity.

Hyderabad International Airport Ltd (HIAL), the consortium that will build and operate the airport, is currently in talks with a group of lenders, including ICICI, IDFC, IDBI and other banks.

The proposed airport will have a low-cost carrier terminal. With an initial capacity to handle 5 million passengers a year, it will eventually handle 40 million passengers.

The project is a joint venture by a consortium of companies led by GMR Group, Malaysian Airports, the government of Andhra Pradesh and the Airports Authority of India (AAI).

While the GMR Group holds 63 per cent equity in the venture, Malaysian Airport holds 11 per cent and the Andhra Pradesh government and AAI hold 13 per cent each.

The airport is targeting revenues from flight and passenger charges, cargo and ground handling, advertisements, and real estate development in the vicinity of the airport. The airport complex, which is being built over 5,400 acres, will be able to handle large aircraft like Airbus A380s.

"We have started work on the project. We expect the fist phase to be functional by 2007-08," said Kiran K Gandhi, chief executive officer, HIAL.

The connectivity to the airport is being developed. Along with a 108-km outer ring road, a multi-mode transport systems is also being put in place.

The civil aviation ministry had announced its policy on airport infrastructure in December, 1997, providing for private sector participation in airport infrastructure. This encouraged the Andhra Pradesh government to promote a greenfield airport near Hyderabad under a joint venture with private sector participation.

The Union Cabinet had, in April this year, accorded in-principle approval to the state government's airport proposal. To carry the airport project forward, a memorandum of understanding was signed between the AAI and the Andhra Pradesh government. The Cabinet had cleared the concession agreement earlier this month.

Airport on course

• The project, to be completed through private and public partnership, will cost Rs 1,418 crore. It will be funded through a mix of debt and equity
• The airport will have a low-cost carrier terminal. It will initially handle 5 million passengers a year, which will go up to 40 million. It will also be able to handle big aircraft like A380s
• The airport is targeting revenues from flight and passenger charges, cargo and ground handling, advertisement, and real estate development in the vicinity