Nagarjuna Cons puts two airports on backburner

Hyderabad: The slowdown appears to have had a direct bearing on the two proposed greenfield airports at Shimoga and Gulbarga in Karnataka.
The projects have been put on hold for now and the developers would evaluate their feasibility only after six to nine months.
Hyderabad-based Nagarjuna Construction Company (NCC), along with Maytas and Vienna International Airport through its arm VIE India Project Development and Holding LLC, won the bids called by the Karnataka government some months ago.
Each of the airports was expected to cost about Rs 100 crore and the consortium took up the projects on build, own and transfer (BOT) basis. But, with the changing market scenario and difficulties in achieving financial closure for the projects, the developers have decided to defer the execution of these projects.
Y D Murthy, senior vice-president, NCC, told DNA Money that the airports are not viable on a standalone basis.
Though located in tier II cities, the airports, once built, are expected to drive tourism and business. The government is also looking at incremental benefits such as general growth in infrastructure and development in the form of hotels, recreation facilities and a boost to the construction sector.
15/12/08 K V Ramana/Daily News & Analysis

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Categories: Airports Dec 2008, Merchant Airports Dec 2008, New Dec 2008