BIAL inks pact with cargo concessionaires

Two separate consortia led by Singapore Airport Terminal Services (SATS) and UK-based Menzies Aviation respectively have been selected for the new Bangalore International Airport's (BIAL) cargo operations. The airport operations are scheduled to commence on April 2, 2008.

On Tuesday, the BIAL signed the agreement with the two cargo concessionaires. While SATS partners Air India, Menzies Aviation has tied up with the Bangalore-based Bobba Group. As many as six firms had submitted their bids and the Anil Ambani promoted Reliance Infrastructure was among those which lost out.

BIAL chief commercial officer Stephan Widrig told a news conference here that the two consortia have been selected on the basis of their experience in the aviation industry. "An extensive technical and financial evaluation was carried out before selecting the concessionaires. The evaluation focussed primarily on the overall feasibility of the business plan and the tenderer's ability to finance and develop a cost effective facility," he added.

Each of the selected consortium will be responsible for the design, construction, financing and operation of a cargo facility of international standards on a 7.3 acre plot. The combined investment will be approximately Rs 150 crore and the duration of the contract is 20 years.

The SATS-Air India consortium has projected the annual cargo movement (both export and import) at the new international airport at between 2.50 lakh and 3 lakh tonnes during the first three years. The other consortium "" Menzies Aviation and Bobba Group "" has projected the annual cargo movement at 2 lakh tonnes.

"A third player will be selected once the cargo movement reaches 3.5 lakh tonnes. But that may not be in the near future," Widrig stated.

SATS provides integrated ground handling and airline catering services at Singapore Changi Airport. Its operations spans 15 overseas investments covering more than 20 airports in the Asia Pacific Region. Menzies Aviation is in charge of ground handling in 98 stations in 25 countries.

BIAL chief executive officer Albert Brunner said four more agreements will be signed by the year-end. They include ground handling operations, inflight catering, hotel, retail and restaurants. "We have already signed the agreement for central fuel infrastructure with Indian Oil. The agreement with the cargo concessionaires is the second. The remaining agreements will be concluded by year end," he added.

BIAL will design, build, own and operate the first greenfield private sector-owned and operated airport in the country. The private promoters hold a 74 per cent stake while the state holds the remaining 26 per cent. The financial closure for the Rs 1,930 crore project was achieved last year.