Bangalore: Bangalore International Airport Ltd, or Bial, in which GVK Power and Infrastructure Ltd is the second largest shareholder, has revived its expansion plans and will add a second terminal to handle up to 36 million passengers a year.

The terminal will be completed in four years, G.V.K. Reddy, chairman of GVK Power, said on Tuesday while announcing the expansion.

Increasing capacity: GVK Power chairman G.V.K. Reddy. The firm has hired US firm HOK for expanding the airport’s first terminal. Bharath Sai / Mint

But GVK, which bought a 29% stake in Bial late in 2009 valuing the airport at at least $1 billion (Rs4,560 crore), is adding capacity because it sees higher passenger growth as the economy revives.

Bial isn’t the only airport looking to take advantage of the projected revival.

On Monday, the Karnataka government signed a pact with Chennai-based infrastructure firm MARG Ltd to build a new airport in Bijapur, a tourist town in the northern part of the state. Karnataka has also invited bids for new airports in Hassan, Bellary and Shimoga.

“We should see more of this kind of activity," said Rajeev Batra, executive director at audit and consulting firm KPMG Advisory Services Pvt. Ltd. “The non-metro airports, which were held back due to funding issues—I think that will get back on track."

Batra added that the revival of the Bangalore airport’s expansion programme would give an impetus to other new airports such as the one planned at Navi Mumbai.

The number of air travellers rose 7.5% in 2009 from the year before, when domestic aviation slumped. Nearly 3.07 million additional passengers flew by air last year, taking the total carried to 43.84 million, up from 40.77 million in 2008 and 42.85 million in 2007, the Directorate General of Civil Aviation, India’s airline regulator, said on 13 January. Bangalore airport handled 9.4 million passengers last year.

The first terminal will be expanded and more facilities added ahead of the second one being built, Reddy said. “We will address every single need of the passengers and local people."

GVK Power has hired US architecture and engineering firm HOK, which is building the Delhi airport’s Terminal 3, for expanding Bangalore’s first terminal to handle 15 million passengers.

The second terminal will be tendered out for global bidding, Reddy said, without specifying financial details.

In 2008, Bial had estimated an investment of at least Rs2,500 crore for building the second terminal. The first phase cost Rs1,930.39 crore.

Siemens Project Ventures GmbH is the highest stakeholder in Bial, with a 40% holding. GVK, which already runs the Mumbai airport, gained management control of Bial late 2009 when it bought Larsen and Toubro Ltd’s 17% stake and a 12% holding from Unique Zurich Airport.

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