Rammohan revives hopes on Bhogapuram airport

Is the civil aviation sector in Andhra Pradesh and Telangana all set to leap? Hopes soared high following Srikakulam Member of Parliament Kinjarapu Ram Mohan Naidu has been given Civil aviation portfolio in Narendra Modi 3.0 Cabinet on Monday.

Bhogapuram International Airport Limited (BIAL) in Vizianagaram district is one of the many airports that have been languishing for the past 10 years.

The BIAL, rechristened GMR Visakhapatnam International Airport Limited (GVIAL), was the major civil aviation project for developing the ‘Bhogapuram Aerotropolis Project.’ It comprises an international airport, a Maintenance, Repair and Overhaul (MRO) facility and an Aviation Academy.

Early on, the Andhra Pradesh government had given its nod to provide a guarantee for the HUDCO loan for Rs 854 crore for the development of Bhogapuram International Airport. This, by way of the formation of an SPV named Bhogapuram International Airport Corporation Limited (BIACL) under the Companies Act, a 100 per cent owned by the Government of Andhra Pradesh, for speedy implementation of Bhogapuram Aerotropolis Project comprising international airport, MRO facility and an Aviation Academy.

Further, the HUDCO had also come forward to fund the land acquisition and pre-development activities for the airport and sanctioned Rs 1,500 crore for the same. It was against this backdrop that the first out of three phases of work of the airport was intended to be taken up within three years from 2016. For this, the Bhogapuram International Airport Corporation Limited (BIACL) had requested the government to give a guarantee of Rs 854 crore.

However, the first phase of the implementation of works suffered due to abnormal delays going beyond the initially proposed three-year time period.

However, the rechristened entity, GVIAL in May 2023 had estimated the first phase of works needed Rs 4,727 crore, including Rs 135 core funded works. Accordingly, it has increased the company's borrowing limits to Rs 4,000 crore, including a term loan of Rs 3,700 crore to part finance the phase-I development works with around 10 per cent cushion.

At a time when the pace of the first phase of works picking up, the new dispensation taking charge and Rammohan Naidu becoming the Civil Aviation minister is like a shot in the arm for the early completion of works.

The GVIAL signed the concession agreement with Andhra Pradesh Airports Development Corporation Limited (APADCL) under private, public partnership mode and on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. The first phase of the airport is projected to serve six million passengers annually. Besides, handling the domestic and international air traffic, it was also meant to become a cargo hub. Early completion of the first phase works also expected to decongest the increasing pressure on the current Visakhapatnam Airport, which is primarily an airport to serve the Indian Airforce and Navy, sharing its space to meet the civilian air traffic.