HIAL achieves financial closure

First flight to take off during first quarter of 2008

The Rs 1,760-crore Hyderabad International Airport project has achieved financial closure on Monday. The new airport, coming up over an area of 5,500 acres at Shamshabad near here, is scheduled to commence operations during first quarter of 2008.

The site preparation works of the project, being executed by the Hyderabad International Airport Limited (HIAL), are being completed two months ahead of schedule.

Turnkey contracts were awarded on August 12, 2005 to L&T Ltd for airside and landside works and to China State Engineering (Hong Kong) Ltd for passenger terminal building works.

The contractors have been given notice to take up the works from September 1, 2005. "The first flight will take off from the airport during the first quarter of 2008," HIAL managing director Kiran K Grandhi said, adding that the project was expected to achieve break even in 8-10 years.

He told newspersons here on Tuesday that the project was being financed through an equity of Rs 378 crore, debt of Rs 960 crore, interest-free loan from the Andhra Pradesh government (APG) to an extent of Rs 315 crore and a state support grant of Rs 107 crore. The project cost of Rs 1,760 crore, having a debt-equity ratio of 1.2:1, includes an additional contingency of Rs 97 crore.

The tenure for the repayment of loans from the opening of the new airport is 16 years. The interest-free loan of Rs 315 crore from APG is repayable during the operations of the project. The project being a public-private partnership initiative, APG is providing a cash grant of Rs 107 crore.

HIAL is a joint venture of GMR Infrastructure Ltd, Malaysia Airport Holdings Berhad (MAHB), Airports Authority of India (AAI) and APG. While GMR has a 63 per cent stake in the project, MAHB has 11 per cent equity holding and AAI and APG have 13 per cent shareholding each.

Grandhi said that the debt totalling Rs 960 crore had been tied-up with Infrastructure Development Finance Company Ltd as the lead lender of the consortium.

The other members of the consortium included Allahabad Bank, Bank of Baroda, Canara Bank, Industrial Development Bank of India, Oriental Bank of Commerce, State Bank of Hyderabad and Vijaya Bank.

The capacity of the project has been increased to 7 million passengers per year during the first phase as against the earlier estimate of 5 million passengers. The airport capacity, according to Grandhi, can be scaled up to handle 40 million-50 million passengers per year.

The capacity of the airport was enhanced keeping in view the increase in traffic and growing number of international airlines operating from Hyderabad. The passenger traffic touched the 3-million mark in 2004-05, registering a growth rate of 28 per cent.

The passenger traffic from the city this year was expected to be around 3.7 million. "By the time the airport opens, we are expecting that there will be passenger traffic of 4.5 million to 5 million," Grandhi said.

He said that HIAL was currently holding discussions with the Andhra government regarding building up an elevated expressway on a BOT (build, operate and transfer) basis from Mehdipatnam to AsamGarh crossroads to ensure smooth flow of traffic between the city and the new airport.

Once completed, the new airport will have 30 aircraft parking stands including 10 passenger boarding facilities, 60 check-in counters, 18 immigration counters, a business hotel, a luxury hotel, convention centres, industrial and business parks, free trade zones, a logistics park, golf courses and an airport village for "meeters and greeters".

This apart, an extent of 38 acres has been earmarked for setting up hangars to be utilised by maintenance, repair and overhaul companies. City check-in facility would also be provided at hotels, railways stations, shopping malls and other establishments.

"Our vision is to put Hyderabad International Airport on the global aviation map and our mission is to build, finance, operate and maintain a greenfield airport with levels of service standard and infrastructure on par with any global benchmark," Grandhi said.