Bangalore intl airport to take off in May

The construction work of the much-delayed greenfield Bangalore International Airport will begin next month and the project's chief executive officer hopes the first flight would take off by February 2008.

"Nearly 99 per cent of the legal formalities are completed and even signed. We have to sign a land lease deed, which I am confident to do in the next few days. We should be in a position to start construction within a month from now," Bangalore International Airport Ltd CEO Albert Brunner said in Bangalore.

BIAL is the company formed to execute the airport project at Devanahalli, about 35 kms from the city with its Chairman being N R Narayana Murthy, Infosys founder and chief mentor.

The Siemens-led private consortium holds a 74 per cent equity stake in the project that consists European airport operator -- Unique (Zurich airport) of Switzerland and the Indian engineering and construction giant L&T.

The Airport Authority of India (AAI) and the Karnataka State Industrial Investment Development Corporation (KSIIDC), nodal agencies of the Centre and the state -- each hold 13 per cent equity stake in the project.

Brunner said the final cost of the Devanahalli airport has escalated to Rs 1,411 crore (Rs 14.11 billion), that includes about Rs 100 crore (Rs 10 billion) in tax and duties, as against the earlier projections of Rs 1,330 crore (Rs 13.30 billion).

"We hope to have our first flight in 33 months, by February 2008. It will be ahead of the Hyderabad airport," Brunner said.

He said while BIAL has a negotiated, finalised and signed engineering contract, the GMR Vasavi-led consortium for the Hyderabad airport was yet to sign an EPC contract.

The GMR Vasavi and Malayasian Airport Holding (MAHB) consortia will build the Rs 1,400 crore (Rs 14 billion) Greenfiled airport at Shamshabad on the outskirts of Hyderabad.

The Bangalore airport, conceived in the early 1990s has been hit by delays but a directive from Prime Minister Manmohan Singh late last year following cries for improved air connectivity to India's hi-tech hub put the project back on the 'fast track.'

The airport by the Siemens consortium was conceived to be operational by end 2005. Brunner said several agreements have been signed in the last one month including the one on air traffic management with AAI and the contract deal with Zurich Airport, besides the EPC contract with L&T.

He said the bank guarantees from all shareholders had been received but the state support from Karnataka was pending.

Brunner said the concession agreement was renewed in January and it would last till about May or June.

The airport, expected to employ 300 people, is to handle around 3.7 million to 4.1 million passengers and about 140,000 tonnes of cargo per annum with one runway in the first phase.

The Siemens consortium will operate the airport under the Build, Operate and Transfer (BOT) basis for 30 years initially, with a clause of extending it for another 30 years.

Financing will be done through debt of Rs 630 crore (Rs 6.30 billion), Equity Rs 320 crore (Rs 3.20 billion) and state support of Rs 350 crore (Rs 3.50 billion).