The slowdown appears to have had a direct bearing on the two proposed greenfield airports at Shimoga and Gulbarga in Karnataka.
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. “Because of that, the government gave us 300 acres for retail and commercial development. Now, even the real estate market is down. So, we have put it on hold and we will review it only after six to nine months.”
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.
Two of NCC’s other projects have also been affected — a Rs 1,200 crore port at Machilipatnam and a Rs 1,680 crore hydroelectric project in Sikkim. These two projects too would come up for review in six to nine months.
But, the company is confident of meeting its revenue guidance with an order book of Rs 12,500 crore. Buildings and international business account for 22% each of the order book; roads 11%; water and environment 15%; and oil & gas 10%. Power, irrigation projects and metals are the other contributing sectors.
k_ramana@dnaindia.net
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