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GMR team bags airport project in Istanbul

India's GMR Group, which is restructuring the Delhi international airport, has bagged a prestigious airport deal in Turkey as part of a consortium.
Hindustan Times | By Arun Kumar, Istanbul
UPDATED ON JUL 11, 2007 01:56 AM IST

GMR Infrastructure, in consortium, has bagged the concession for upgrading the second airport in Istanbul. This is the GMR group’s third airport after those in Hyderabad and Delhi.

The consortium will pay 1.932 billion euros over the 20-year concession starting from fourth year and will invest 400 million euros over the next three years to build a separate runway and infrastructure at the Sabiha Gokeen International Airport on the Asia side of Istanbul.

The project would have a debt-equity gearing of 80:20, said Madhu Tredal, chief financial officer of the GMR group.

The equity investment in the project will be 80 million euros, which will be funded by the three partners in the consortium. GMR and Limak Insaat Sanayi, a Turkish construction company, own 40 per cent stakes each and Malaysia Airports Holdings Berhad the remaining 20 per cent in the special purpose vehicle.

“With this deal, we have made our footprint global," Terdal said. "We have to take over the airport within the next three months. This is the gateway for the Europe. Going forward, we will bid for many more airports in Europe and other countries,” he added.

The airport would be constructed on a build-operate-transfer basis, within 30 months, Terdal said.

The GMR consortium won from among a pack of six bidders, including Fraport of Germany, Venice Airport, Chicago Airport and TAV of Turkey. The second highest bid was by the Fraport consortium at 1.9 billion euro.

The Sabiha Gokeen International Airport has a capacity of 3.2 million passengers a year and is operating at full. It manages 3.5 million passengers, which will increase to 4 million by the end of this year. Last year the airport earned revenues of 88 million euros.

Istanbul’s main airport, the Ataturk Airport, has a capacity of 20 million, which can go up to around 23 million passengers, but it cannot expand beyond that. At the Sabiha Gokeen International Airport, the consortium will build another runway with, adding a capacity for 10 million passengers, which can be increased to 15 million with marginal investment. Once the second runway is operational, the existing one will be used for domestic passengers.

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