Friday, March 25, 2005

Hyderabad beats Bangalore in airport takeoff

Tale of two cities
Will Hyderabad take the lead over Bangalore?
Devanahalli Airport Stuck On Runway, Shamshabad Takes Off
The Times of India

Bangalore: It is a study in contrast. The dreams of an international airport took wing similarly in both Bangalore and Hyderabad. Both encountered similar air pockets. In the final reckoning, though, Hyderabad seems to have stolen the runway by a few metres.
Hyderabad’s Take-off: Going by the activity level, Hyderabad is far ahead. The GMR Group-led consortium’s Hyderabad International Airport Ltd has completed building a 25-km boundary wall around the 4,500-acre land at Shamshabad. The site preparation work has commenced which entails digging up and levelling some 40 million cubic metres of earth. Once these two are completed, the next stages are airside and land-side preparation.

On the agreements side too, Hyderabad has cleared all. It has signed the land-lease agreement, the concession agreement and the state support agreement, according to a GMR official. The financial closure is expected in May with a 60% debt component against a 40% equity component.

Bangalore’s contrast: Will Devanahalli see action in the next two weeks? Albert Bruner, chief of Bangalore International Airport (BIA), said preparatory work should begin in this timeframe. State industries minister P.G.R. Sindhia said: “The airport is on track and the work will begin in 15 days to a month.”

However, what’s not cleared yet are the land lease agreement and the financial closure by BIA. The Communication and Navigation System (CNS) agreement and the operations and management services agreement are still to be signed. The shareholder agreement — a tripartite treaty amongst BIA, government of Karnakata and Airports Authority of India — is to be renewed since it has expired.
Final thorns removed? BIA has reconciled to the fact that the Karnataka government is withholding 400-acre land from the originally planned land requirement. The government also defused the standoff between BIA and AAI over latter’s land requirement for residential complex within the project area. AAI is promised land by Karnataka elsewhere for their requirements.

BIAL has made it clear in the past that work will commence only after the financial closure is attained. So, the question is will Devanahalli take off in two weeks to a month as promised? Bruner is confident all the agreements, except the financial closure, will be signed soon.

Race for regional hub: No one realised it but the two cities are now pitted against each other in a battle to become the regional hub. The scales, however, are tilted in favour of Hyderabad. For one, it has already got Sahara Airlines setting up its regional hub which includes its international flights. Jet Airways too is said to be considering Hyderabad as its regional hub.

It’s all a matter of getting the critical mass which will invest in the initial infrastructure, after which Hyderabad will outrace Bangalore which as of today is on nobody’s radar for a regional airline hub. Karnataka has a notorious record in implementing mega projects in the privatepublic partnership. Devanahalli should break this jinx.


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