Clearances in place, work on Bangalore airport to begin now

Clearances in place, work on Bangalore airport to begin now
Financial Express

BANGALORE, MARCH 17: Preliminary ground work for the Bangalore international airport is finally kicking off this week, with all crucial formalities being completed over the past two weeks. The nodal agency for the project, Bangalore International Airport Ltd (BIAL), has said that preliminary work would start ‘within the next few days’. Officially, full-fledged work on the project is expected to begin by May.



The overall project cost is now estimated to be Rs 1,411 crore, with an escalation of Rs 261 crore in the past four years, compared to Rs 1,150 crore in 2001. The escalation is due to increase in development costs, legal fees and other costs such as pre-operational/trial costs.

“We have signed the financial agreement with ICICI Bank and other lender banks last week. Financial closure would be achieved by end of March,” said BIAL CEO Albert Brunner.

On Monday, BIAL also renewed the EPC contract with its contractors Siemens and L&T at an escalated cost of Rs 884 crore (compared to Rs 823 crore that lapsed in September 2004), Mr Brunner said. “The renewed contract is valid for three years,” he said, adding the escalations in the contract cost included ST, import duties and taxes and the price escalation in building materials.

The EPC contract of the much delayed project is being renewed for the third time since the project was conceptualised in the early nineties.

The Karnataka Cabinet had cleared the project on December 2004 including a support of Rs 350 crore soft loan (Rs 275 crore base support and Rs 75 crore contingency) and land lease agreement for over 4,000 acres of land for the airport.