Ahead of the Delhi airport, which was privatised simultaneously, the Mumbai airport has achieved financial closure. A consortium of banks and financial institutions led by IDBI has committed to lend Rs 4,200 crore.
GVK led Mumbai International Airport Pvt. Ltd (MIAL) which is running Mumbai airport announced on Tuesday the formal signing of the loan agreement for meeting long term capital requirement.
In a statement MIAL chairman G V Krishna Reddy said, "Our vision is to transform CSIA into an airport which is benchmarked on global standards of airport operations and service. Achieving financial closure is a significant milestone in realising this vision."
MIAL in October 2006 announced a capital investment of Rs 5,200 crore in the first phase of modernization. Apart from the loan amount, the balance Rs 1,000 crore will be through equity contribution from members of the consortium. The Airports Authority of India (AAI), which has a 26 per cent stake in MIAL will not pay anything towards the capital investment.
The loan tenure is for a period of 17 years, door to door, covering a seven-year loan drawl period. The repayment will commence from the end of the seventh year and will be repaid in 120 monthly payments thereafter.
The financial closure means that the pace of modernisation of the airport will gain momentum from June onwards. Funds will be utilised to convert CSIA into a world-class airport with a capacity to handle 40 million passenger traffic per annum by 2012.
MIAL will build a common integrated terminal for both domestic and international passengers at the Sahar side of the airport with large shopping space. It will upgrade and develop the runway system with taxiways and rapid exit taxiways to increase runway efficiency. It will also develop infrastructure on the city-side by creating efficient access to the terminals.