Cochin Intl Airport Project Cost Set To Go Up By Rs 100 Cr

Initially pegged to cost Rs 300 crore, the project cost now seems to come around Rs 400 crore. The revision of the project cost is likely to be discussed and approved in the board meeting in the second week of November at Cochin.

Sources added that the meeting would look into ways of keeping the project cost escalation to the minimum, as it would have an impact on its forthcoming public issue.

The increase in the project outlay is significant as the project is the first to envisage tapping of the capital market through a public issue for funding. Earlier, CIAL had planned to come out with a public issue of Rs 140-crore. However, the revised outlay may envisage a higher amount to be raised from the capital market.

 

The issue was to be done by divesting 25 per cent of its equity to the public. The project involves the construction of a 3,700 metre-long runway along with facilities to allow technical halts for refuelling aircrafts.

The entire project is spread over 1,100 acres of land which CIAL is in the process of acquiring. The airport is expected to go on stream by the end of 1997.

The decision to go public was taken in March 1996 and the entire project cost has been split into two phases. As part of the first phase, CIAL has already raised Rs 162 crore by way of equity and term loans. Out of this amount, Rs 64 crore is through equity while the remaining Rs 98 crore is a two-tranche term loan given by HUDCO.

CIAL has already started the basic groundwork for the project and has also withdrawn some amount from the term loan.

Kerala government, one of the major shareholder has got 26.2 per cent stake at Rs 16.80 crore. The country's national carrier, Air India has also picked up a 28 per cent stake while Uco Bank has picked up equity worth Rs 4 crore. CIAL has also placed shares worth Rs 14 crore privately.

The revision of the project cost, according to sources, has been necessitated due to the increasing delay in finalising the public issue. CIAL has been holding back a plunge in the capital market due to unfavourable conditions in the market. Once the issue is finalised, the shares would be listed on the Cochin stock exchange.