The government of Turkey has handed over a second airport in Istanbul to a consortium led by Hyderabad-based GMR Infrastructure Limited for modernising and operating it for a 20-year period.
The handing over of the license to operate the Sabiha Gokcen International Airport on Saturday paves the way for the consortium, which also includes Turkey's state-owned Limak Holdings and Malaysia Airports Holdings Berhad Ltd, to start upgradation work.
The consortium will invest Rs 1,575 crore rupees or 250 million euros in the project. It consortium won the bid last July by committing to the highest operating rental of 1.93 billion Euors or about Rs 11,978 crores for a 15-year period.
Its revenue stream will comprise duty free shops, ground handling and cargo handling, besides money from levy of a passenger fee of 12 Euro for every international passenger and 3 euros per domestic passenger
The GMR-led consortium was earlier asked to complete the project in 30 months including construction of new terminal buildings, shopping complexes, car parking and other additional infrastructure.
But Turkish Prime Minister Recep Tayyip Erdogan on Saturday asked the developers to expedite work and complete the upgrade in 18 months.
After the upgrade the airport will be able to handle 15 million passengers by 2010, up from 8.5 million passengers now. Traffic in Turkey is expected to grow by 500 per cent by 2028, or the end of concession period.
"We expect the traffic to grow to 45 million passengers in the next 20 years," G.M Rao, group chairman, GMR Group said.
Rao said the consortium will raise funds from Turkish banks and the ABN Amro Bank through a combination of debt and equity of 75:25. He added the consortium will achieve financial closure after one year in operation.