Bangalore Intl Airport may review construction features

Bangalore Intl Airport may review construction features — Air traffic study projects 7 million passengers by 2008

The Hindu Business Line

A recent air traffic study for Bangalore has come up with a surprisingly high and encouraging figure of seven million passengers by 2008 when the new international airport is due to open.

This has forced Bangalore International Airport Ltd (BIAL) to take another look at the size and provisions of some construction features, according to the BIAL CEO, Mr Albert Brunner.

It may have to bring forward some of the features planned in phase 2, but without altering the basic design, he told Business Line.

The three-year delay and the increasing passenger traffic will mean BIAL has to provide more space for more aircraft than envisaged earlier. The Rs 1,412-crore airport was designed in 2000-01 for opening in July 2005. The Hyderabad airport, too, will be in the same boat, said Mr Brunner after a presentation to a gathering of two Rotary Clubs here.

The company is still assessing its priorities and deciding which features may need to be enlarged or revised. These will certainly have an implication on the cost of the phases but Mr Brunner could not yet say how much.

The new traffic projection is 55 per cent higher than the 4.5 million passengers that BIAL was expecting to start with.

The airport will have a prime portion developed as Airport City, which will include non-aviation businesses such as hotels and shops.

BIAL is awaiting the Centre's guidelines relating to commercial activities and ground handling before calling bids for concessionaires on airport land.

House panel queries: On the recent queries raised by one of the Parliamentary standing committees about BIAL's award of EPC (engineering, procurement and construction) contracts to its shareholders, Mr Brunner justified the decisions. He said all that was sought in the Karnataka bid document of 1999-2000 was followed.

The State had set a pre-condition for having an experienced airport operator (Unique Zurich Airport) and contractor (Siemens-L&T) and the company had complied "one hundred per cent (with) what was sought at that time."

Mr Brunner said the Parliamentary committee had asked for some answers from it during May-June this year. "BIAL has conducted all its transactions in a transparent manner and is open to all queries" from the committee, he said.

Since the signing of the shareholders' agreement in 2002, the project has seen several consultants appointed by some promoter or the other. Between May and September 2002, the British firm Mott MacDonald, appointed by the Karnataka Government, vetted the scope of the shareholders' agreement. Two EPC contracts have been awarded, one worth Rs 550 crore to L&T and another worth Rs 326 crore to Siemens, for completing the project in 30 months.

"When we received the offers from our EPC contractors in December 2002, we appointed two consultants - Dorsch Consult in Germany for all off-shore parts of the contracts and C. R. Narayana Rao from Chennai for all on-shore contracts. These consultants had to scrutinise the contracts and the offers to make sure they were complete in scope and competitive in price. These two consultants advised BIAL in all negotiations with the EPC contractors (for the initial price and for the consecutive price increase negotiations after the contracts had expired)," he said in a response to a query from Business Line.

Again, the lender ICICI Bank appointed another independent consultant, Scott Wilson, to scrutinise the project for completeness and for price competitiveness.