Hyderabad’s New Airport Expected to Make Profit in Second Year
THE Rajiv Gandhi International Airport (RGIA) in Hyderabad, India, co-owned by Malaysia Airports Holdings Bhd (MAHB), is expected to start making profit as early as its second year of operation.
GMR Group chairman (airports) Kiran Kumar Gandhi said the newly opened airport would be a benchmark for airport privatisation in India, where the public can expect high service levels.
“We hope to start seeing profit in the second or third year (of operation),” he told visiting Malaysian journalists in Hyderabad on Saturday.
The US$600 million (RM1.91 billion) airport is developed by GMR Hyderabad International Airport Ltd, a consortium comprising India’s infrastructure giant GMR Group (63 per cent), MAHB (11 per cent), the Airports Authority of India (13 per cent) and the Government of Andhra Pradesh (13 per cent).
The airport, which was inaugurated by Indian National Congress Party leader Sonia Gandhi on Friday, is now awaiting the green light from the Indian central government to commence operation.
India’s Civil Aviation Ministry had recently announced that the operations of RGIA would be delayed by a few days due to operational reasons.
For the time being, business is as usual at the old Begumpet airport, which was supposed to cease civil aviation operations once RGIA started operation from Sunday.
For starters, aeronautical activities will contribute 70 per cent to RGIA’s revenue, while the remaining 30 per cent will come from its non-aeronautical activities, such as retail outlets at the airport.
Kiran said the contribution from these two activities is expected to be equal within the next three to five years.
He also said that the GMR Group has no intention of purchasing a stake in MAHB. Khazanah Nasional has 72 per cent stake in main- board listed MAHB.
Foreign shareholding in the airport operator stands at 12 per cent.
He added that whenever GMR Group plans to bid for airport projects, it would offer a partnership to MAHB first.
“We have excellent relations with MAHB for the last seven years… a lot of goodwill and trust,” he said, adding that the partnership with MAHB is the first the group has had with a Malaysian company.
On another development, Kiran said the GMR Group is focusing on expanding into Southeast Asian countries in infrastructure and agri- business, including Malaysia.
The Bangalore-based group – which has interests in agri- business, airports, energy, highways and urban infrastructure – is among nine firms shortlisted for the bidding process to acquire Singapore’s Tuas Power.
Tuas Power, one of the three power companies that Singapore investment arm Temasek Holdings plans to sell, is valued at some US$2 billion (RM6.38 billion).
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