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GVK signs deal with Indonesian airports authority

Firm also developing an international greenfield airport in Central Java
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First Published: Thu, Nov 08 2012. 02 40 PM IST
G.V. Sanjay Reddy, vice-chairman of GVK Power and Infrastructure. Photo: Pradeep Gaur/Mint
G.V. Sanjay Reddy, vice-chairman of GVK Power and Infrastructure. Photo: Pradeep Gaur/Mint
Updated: Thu, Nov 08 2012. 07 33 PM IST
Mumbai: GVK Power and Infrastructure Ltd, which operates airports in Mumbai and Bangalore, on Thursday signed an operations and management contract with the state-owned Airports Authority of Indonesia to manage the non-aeronautical commercial operations at Indonesia’s second-busiest Bali (Denpasar) International airport.
The scope includes the existing terminals and the new international terminal, which is currently under construction and is expected to open in the third quarter of 2013 with a major makeover. The contract period is for three years and GVK will have the first right of refusal for an extension, said a senior GVK executive, requesting anonymity.
‘’This is management and operation contracts and does not envisage any investment from GVK. The correct traffic at Denpasar Airport is 10.1 million (2011) and is likely to grow 10-12% per annum. GVK is expected to generate and maximize the non-aero revenue. GVK will manage close to 240,000 sq. ft commercial area,’’ the executive said.
Bali is a prime destination for overseas tourists. However, airport infrastructure and the revenue from non-aeronautical sources such as retail, food and beverages, duty-free shops and other services hasn’t kept pace with the exponential growth in passenger traffic, GVK said in a statement.
“We are very excited by the opportunity to provide passengers at the Denpasar Airport in Bali a truly world-class shopping experience, across brands, product variety and price points. This is also in line with our stated endeavour to take this airport to international standards and help Indonesia in realizing its growing potential as a key destination in the region,” said G.V. Sanjay Reddy, vice-chairman of GVK Power and Infrastructure.
The financial details were not disclosed.
GVK is also developing an international greenfield airport in Yogyakarta in Central Java in collaboration with the government of Indonesia. This follows the memorandum of understanding that GVK had signed in January 2011 with the government of Indonesia.
GVK’s airports in Mumbai and Bangalore handled passenger traffic of about 44 million in the year 2011-12.
Shares of GVK Power fell 1.91% to Rs.12.81 on BSE. The exchange’s benchmark Sensex lost 0.30% to close at 18,846.26 points.
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First Published: Thu, Nov 08 2012. 02 40 PM IST
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