BANGALORE: GVK Group, promoter of Bangalore International Airport Ltd (BIAL), is planning to develop real estate around the airport.
The idea is to develop an ‘airport city’ with work places, homes and social infrastructure for travelling passengers.
Speaking to reporters here on Saturday, BIAL Managing Director G.V. Sanjay Reddy said: “We have not identified the areas for realty development. First we need to develop a plan for BIAL and then go to the Government for approval.”
BIAL is also planning a second round of expansion to handle the full capacity of 55 million passengers.
“Today, Terminal 1 can handle up to 20 million passengers per year,” said Reddy.
On the budget for the expansion, Reddy said a detailed plan will be ready in 3-6 months. He further said BIAL has submitted a proposal with the Airports Economic Regulatory Authority to hike the user development fee (UDF).
“The decision to hike UDF for Bangalore airport is awaited and we expect to get the orders in 3-6 months. Currently, we are changing Rs 236 per person,” he said.
The GVK Group is exploring a stake sale at the company level and not at the airport level. Reddy said this is being done to fund the airport business in Mumbai, Bangalore and a few outside India.
“Currently, there is no plan from GVK to divest the company’s stake in BIAL. But we don’t know when the other stakeholders will do so. Siemens and Zurich AG, which hold 26 per cent and 5 per cent respectively, have a lock-in period up to 2015,” he added.
The Bangalore International Airport has been renamed Kempegowda International Airport and Terminal 1, built at a cost of Rs 1,500 crore, was inaugurated.
Speaking on the occasion, Union Civil Aviation Secretary K.N. Srivatsa urged the Karnataka Government to reduce VAT on aviation turbine fuel from 28 per cent to 5 per cent.
This reduction will make Bangalore competitive and make it an aviation hub for many companies, he said.