GMR, Limak win Istanbul airport deal

GMR Infrastructure, which is currently modernising the Delhi airport and building the greenfield airport at Hyderabad, has bagged the tender for developing the Sabiha Gokcen International Airport (SGA) at Istanbul, Turkey.

GMR claimed that it was the first time any Indian airport developer had bagged the tender for the development of an international airport under the build operate and transfer (BOT) model.

The $400 million modernisation project will be developed by a consortium including GMR (with a stake of 40%), Limak (40%), a construction company in Turkey and Malaysia Airports Holdings Berhad (MAHB) (20%), which is GMR's  partner for the Hyderabad airport.

According to sources in GMR, the project will be implemented through a special purpose vehicle, and a seperate company will be formed in the subsequent quarter for the project.

The development project involves construction of a new international airport terminal after which the total passenger capacity at the airport will stand at 10 million per annum. Current passenger capacity stands at 3.5 million per annum. Until the new terminal is built, the developers will manage the two existing terminals. Once the international terminal comes into place, the two existing terminals (international and domestic) would be merged into one domestic terminal.

The term of concession would be for twenty years. Instead of a revenue sharing model like the Delhi airport, the developers have to pay a concession fee of $2.7 billion over the 20-year period. They, however, do not have to pay any fees in the initial three years.

The bidding process was conducted by the Under Secretariat of Defence Industries, Turkey on the basis of technical and financial evaluation. Competitors for the project included major airport developers like Fraport (Germany), Venice Airport (Italy), and Chicago Airport (USA). ABN Amro was the financial advisor on the transaction for the GMR consortium.