Proposal to amend airport concession agreement cleared

Proposal to amend airport concession agreement cleared

The Hindu

This will enable redesigning of the airport project's first phase

# In the re-designed set-up, the built-up area of the passenger terminal building will be 71,000 sq.m.
# Projected cost will go up from Rs. 1,411.79 cr. to Rs. 1,930.29 cr.
# 8.4 million passengers estimated to travel to and from Bangalore in 2010

NEW DELHI: The Union Government on Thursday approved the proposed amendment to the concession agreement of Bangalore International Airport Limited (BIAL) to enable the joint venture company to redesign the initial phase of the project to cater to 8.4 million passengers by 2010 as against the earlier target of 2020.

Boom in air travel

The amendment will allow the firm to re-design the airport under construction at Devanahalli, near Bangalore.

It was felt that the facilities in the initial phase of the project would be grossly inadequate at the time of opening of the airport and hence the need to re-design was recognised.

Traffic estimates in 2000 showed that 8.4 million passengers would travel to and from Bangalore in 2020.

But the boom in air travel meant that the figure would be reached in 2010 itself.

As against the initial forecast of 41,000 aircraft movements a year in 2010, the latest projection is 1,06,000 movements in a year. This has forced BIAL to re-design the airport by merging the second phase of construction with that of the first phase to be completed by 2010. In the re-designed set-up, the built-up area of the passenger terminal building will be 71,000 sq.m. as against the 55,850 sq.m. projected earlier.

Two pacts to be inked

The Union Cabinet, at its meeting on Thursday, granted approval to signing of two agreements with the firm to modify the concession agreement to factor in changes in the project design.

The projected cost, taking into account the redesigning, will go up from Rs. 1,411.79 crore to Rs. 1,930.29 crore, an increase of Rs. 518.5 crore, which will be funded through additional debt.

The additional amount would be raised by BIAL through loans and advances from third-party service providers such as those who would be involved in cargo handling or fuel supply, and not through additional equity or State support. Of the additional amount, Rs. 450 crore would be borrowed and Rs. 68.5 crore from service providers, an official spokesperson said.