Hyderabad: As many as 37 infrastructure firms have put in bids to develop eight regional airports in Andhra Pradesh, according to a top official.
The state government will finalize the list of developers for the airports located at the so-called tier-IV cities by September, said the senior executive of Infrastructure Corp. of Andhra Pradesh (Incap), who did not want to be identified as he is not authorized to speak to the media.
The state had called for bids in January to develop airports at Nellore in Nellore district, Ongole in Prakasam district, Ramagundam in Karimnagar district, Kothagudem in Khammam district, Kurnool in Kurnool district, Tadepalligudem in West Godavari district, Nizamabad in Nizamabad district, and Badangi in Vijayanagaram district.
State-owned Incap promotes infrastructure projects in Andhra Pradesh.
India currently has 80 fully functional airports equipped to handle commercial, charter and defence flights, according to a report released by Centre for Asia Pacific Aviation (Capa) in February this year.
However, of these, 24 major airports together account for 94% of the air traffic, while the remaining traffic is shared by smaller or regional airports.
The companies that have shown interest in developing the airports include UK-based Caparo Group Ltd, GMR Infrastructure Ltd, Lanco Infratech Ltd, IVRCL Infrastructures and Projects Ltd, Maytas Infra Ltd, Mukesh Ambani-promoted Reliance Industries Ltd, Anil Ambani-led Reliance Airport Developers Pvt. Ltd, Unitech Ltd and Hindustan Construction Co. Ltd.
Other players that have expressed interest include Navayuga Engineering Co. Ltd, Ramky Infrastructure Ltd, Gayatri Projects Ltd, Soma Enterprise Ltd, Indu Projects Ltd, Progressive Construction Pvt. Ltd, MSK Projects (India) Ltd, Marg Ltd, and Shivani Oil and Gas Exploration Services Ltd.
Interestingly, GVK Power and Infrastructure Ltd, which operates the Mumbai international airport, did not participate in the bids, said the Incap official.
This despite the fact that GVK had in the past partnered with Deccan Aviation Ltd to build low-cost airports in small Indian towns. However, it later pulled out of the consortium after Kingfisher Airlines Ltd of the UB Group acquired Deccan Aviation.
“We did not participate in the bids for regional airports in Andhra Pradesh since we are keen on developing airports in smaller cities only if they have some kind of existing runway,” said G.V. Sanjay Reddy, vice-chairman of GVK Industries Ltd and managing director of Mumbai International Airport Ltd.
“We have expressed our interest to develop these regional airports but may not take up all eight,” said Kiran Kumar Grandhi, chairman of airports at GMR, which operates the New Delhi and Hyderabad international airports.
IVRCL, which had earlier built passenger terminal buildings of the old airports at Hyderabad and Bangalore, is keen on developing the regional airports more due to the potential development revenues outside the airports rather than their aeronautical revenues, according to its chairman, E. Sudhir Reddy.
IVRCL has tied up with an unnamed Spanish airports company and has also bid for the Amritsar, Chennai and Kolkata airport development projects.
Confirming that Lanco Infratech has submitted its expression of interest to develop regional airports in the state, its chairman, Lagadapati Madhusudhan Rao, said the government may not award all the airport projects to a single developer. Last August, Lanco obtained a Rs83 crore contract to modernize the airport at Varanasi in Uttar Pradesh. It has also submitted bids to develop the Amritsar airport.
“Incap, along with district officials concerned, has already identified 300-500 acres of land for each of these regional airports, wherein the project would include city-side development that involve retail and real estate components,” said the Incap official.
Each of the regional airports would have a 2,500m runway to accommodate small aircraft and would require an investment of around Rs100 crore each, the official added.
Kapil Kaul, chief executive of consulting firm Capa, had earlier told Mint, “(Airports) will be natural extension for infrastrcture and construction companies since it provides for real estate opportunities.”
The regional airports in Andhra are aimed at triggering further economic growth in these tier-IV cities and also to meet the growing demand for quick transportation, said Manmohan Singh, principal secretary at the state’s department of infrastructure and investment.
It may take around six months for a developer, from the date of being awarded an airport project, to achieve financial closure and another 18 months or so from then to complete the project, the Incap official said.