GMR Hyderabad International Airport Limited

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GMR Hyderabad International Airport Limited (GHIAL) signed a 30 year build-own-operate-transfer (BOOT) contract with the Ministry of Civil Aviation, Government of India (GOI) in December 2004, to develop a greenfield international airport at Shamshabad, near the city of Hyderabad, Andhra Pradesh, India. GMR Hyderabad International Airport (GHIA) was designed to have an ultimate capacity of 40 million passengers per annum. At the time of its opening in March 2008, GHIA was expected to serve 7 million passengers per year. The new international airport was designed to overcome the capacity constraints faced by Hyderabad’s existing airport at Begumpet and to attract foreign investors to the hi-tech city of Hyderabad. Once operational, GHIA was expected to replace the existing airport that handled both domestic and international flights. This BOOT contract was the result of Government of India’s (GOI) commitment to encourage private sector participation to expand India’s airport infrastructure. GOI passed the Airport Authority of India Amendment Act 2003, which defined institutional and legal framework for private investments and paved the way for greenfield airports to be set up in private sector. The project company, GHIAL, was a public-private joint venture between GMR Group (63%), Malaysia Airports Holdings Berhad (MAHB) (11%), Government of India’s Airports Authority of India (13%) and State Government of Andhra Pradesh (GoAP) (13%). The private consortium led by GMR Group was selected as the preferred bidder in an international competitive tender conducted by the GoAP in May 2001. GHIAL was subsequently formed in June 2002. The total cost of the airport was estimated at US$ 399.1 million, including a contingency of US$ 22 million. The project reached financial closure in August 2005, with a debt equity ratio of 1.2:1. The debt totalling US$ 217.7 million was tied-up with IDFC as the lead lender of the consortium. The other participating banks included Allahabad Bank, Bank of Baroda, Canara Bank, IDBI, Oriental Bank of Commerce, State Bank of Hyderabad and Vijaya Bank. The Government of Andhra Pradesh gave a grant of US$ 24.26 million to the project, in addition to an interest free loan of US$ 71.4 million. The remaining funds came in the form of equity from the consortium partners. Airports Authority of India (AAI), the apex statutory organization under the administrative control of Ministry of Civil Aviation, GOI, is responsible for the regulation and management of all the air traffic services in India. Construction began in September 2005 and the airport was expected to begin commercial operations in the first quarter of 2008. Project company, GHIAL's official website - http://newhyderabadairport.com/airways/airway.html