Small airport project fails to take off as GVK pulls out

Bangalore/Hyderabad: A plan to build low-cost airports in small Indian towns through a consortium led by Deccan Aviation Ltd, which runs budget carrier Deccan, has collapsed after one partner, the GVK Group, pulled out.
GVK’s action stems from UB Group, a conglomerate that also owns Kingfisher Airlines Ltd, agreeing to merge both airlines into one company.
The Deccan-led consortium had also included the private equity arm of Infrastructure Development Finance Co. Ltd (IDFC) and K Raheja Corp., a Mumbai construction firm. All four were equal partners in the venture.
The Deccan-led consortium had also included the private equity arm of Infrastructure Development Finance Co. Ltd (IDFC) and K Raheja Corp., a Mumbai construction firm. All four were equal partners in the venture.
GVK, which operates the international airport in Mumbai, was to build and operate the airport; the Rahejas were to build shopping malls and industrial parks; and Deccan would operate dedicated flights to the airport from other cities, according to an initial agreement of the partners. IDFC’s private equity arm was to fund the venture.
The consortium was to bid for new airport projects in small towns in Karnataka, Andhra Pradesh and Maharashtra on ‘build, operate and transfer’ or BOT models.
An official from the Hyderabad-based GVK, who requested anonymity, said the partners never found a “great opportunity” in building airports in smaller towns.
25/12/07 C.R. Sukumar and K. Raghu/Livemint

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Categories: Airports Dec 2007, Merchant Airports Dec 2007, New Dec 2007, Simplifly Deccan Dec 2007