GMR takes over Istanbul airport for modernisation and operations
05 May 2008
Turkey: The Government of Turkey has handed over a second airport in Istanbul for modernisation and operations for a 20-year period, to a consortium of led by Hyderabad-based GMR Infrastructure Limited. Turkey's state-owned Limak Holdings, and Malaysia Airports Holdings Berhad Ltd are GMR's consortium partners in the project.
The license to operate the Sabiha Gokcen International Airport was handed over to the consortium on Saturday. The consortium will now commence work for upgrading the airport, with an investment of Rs1,575 crore (€250 million).
The consortium won the bid in July 2007, having committed the highest operating rental of Rs11,978 crore (€1.93 billion) for 15 years. The project's revenues will come from duty free shops, ground handling and cargo handling, and a passenger fee that would be levied to the tune of €12 for an international passenger, and €3 for a domestic passenger. Aeronautical revenues, however, which accrue from charging airlines for landing and parking, will go to the Turkish government.
The consortium expects duty-free shopping to account for almost 25 per cent of the airport's revenues.
Turkish Prime Minister Recep Tayyip Erdogan on Saturday, asked the consortium to expedite their development and complete the upgrade of the airport in 18 months, against the original deadline of 30 months. This includes the construction of new terminal buildings, shopping complexes, car parking facilities and other additional infrastructure such as a 60-room hotel. The terminal and facilities will cover a total area of 320,000 square metres, and will have 96 check-in points, 30 online check-in points, a total of 32 x-ray units, and a 13,700 square metre, two-storey VIP terminal.
Once the upgrade is complete, the airport will be able to handle 15 million passengers by 2010. Currently, it handles half that number. Traffic in Turkey is estimated to grow by 500 per cent by year 2028, when the concession period comes to an end. Over the 20 year period, traffic is estimated to grow to 45 million.
The consortium plans to raise funds from Turkish banks and the ABN Amro Bank through a combination of debt and equity in the ratio of 75:25, and plans to achieve financial closure after one year in operation.
GMR Infrastructure Ltd holds 40 per cent in the consortium, while partners Limak Holdings and Malaysia Airports Holdings Berhad hold 40 per cent and 20 per cent, respectively.
