Govt wants Bangalore airport ready by 2010

Govt wants Bangalore airport ready by 2010
Business Standard

The Centre wants a new airport coming up in Devanahalli near Bangalore completed by 2010, five years ahead of schedule, in view of a much faster rise in traffic than what had been anticipated.

For this, the Centre has asked Bangalore International Airport Ltd (BIAL), which is executing the project, to ensure that the new deadline is met.

The ministry also wants modifications in the proposed airport terminal building to make it more “modern”. The new airport was to be built in two phases — 2005 to 2010 and 2010 to 2015.

“We have asked the company to co-develop the first and second phases,” Civil Aviation Minister Praful Patel told Business Standard, acknowledging that this would push up the cost of execution for BIAL.

German multinational Siemens holds 40 per cent in BIAL, while Unique Zurich and Larsen & Toubro hold 17 per cent each. The Karnataka government, through Karnataka State Industrial Investment Development Corporation, and Airports Authority of India, together hold the remaining 26 per cent.

Patel said the increase in cost would be shared by all the consortium partners. He pointed out that the volume of traffic projected by the executing consortium for 2010 had been achieved this year itself. The traffic volume projected for 2015 is likely to be reached by 2008. Therefore, the two phases of the project must be executed simultaneously.

“The company had not taken the real traffic potential into consideration.... The airport builder should co-develop the second phase along with the first,” Patel said.

According to initial estimates, the new airport was to have a minimum handling capacity of 20 aircraft. It was to handle 5 million passengers by the end of the first phase and 40 million by 2015. The 5-million traffic figure was achieved this year.

The civil aviation ministry has called a meeting with the executives of BIAL to discuss the issue.

About the terminal building, Patel said, “We want it to be a modern building with some modifications in the structure.”

Building the airport is estimated to cost Rs 1,411 crore. The Karnataka government has provided a soft loan of Rs 350 crore to BIAL and a budgetary support of Rs 400 crore. The funding also includes a debt component of Rs 735 crore.

Earlier this year, the Parliamentary Standing Committee on Transport and Tourism headed by CPI (M) Member of Parliament Nilotpal Basu had demanded a probe by an independent agency into the contracts awarded by BIAL to its shareholders.

The contracts recommended for probe included a Rs 884-crore construction and electric system contract awarded to L&T and Siemens.

GET SET GO

May 3, 1999: AAI and KSIIDC sign MoU for the airport project

August 1999: Global tendering begins

June 2001: BIAL selected as the consortium to execute

January 2002: Shareholders agreement executed

2003: AAI Act amended to permit private participation in airports

January 2004: PMO sets up a working group to finalise draft concession agreement

June 2004: Cabinet approves concession agreement

July 5, 2004: Concession agreement signed