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BIAL Airport Concession Agreement, Its future exapansion, UDF charges, No infusion of Capital by Promotors

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Here we have the Concession Agrement signed between BIAL Managment and GOI  on 5th July'2004

Artilce 5.2.1  and 5.2.2  of page 22 gives Exclusivity :

No new or existing airports shall be permitetd by GOI  of either Domestic or Internation  within Aerial dist of  150 Kms from BIAL  Airport before the Twenty-Fifth  Anniversary of the Airport Opening

Consultation paper on BIAL UDF charges deciding

Page No 13  /  2..2.5

Airport Exansion Plan :

Jacob Consultance report for BIAL expansion  on Page : 50,  74,  76  and 120 will give glimpse of the Ph2 expansion with 2nd Runway and looking for 3rd runway wih further land acquiring for BIAL


 Earlier Praja Reference :

BIAL Capacity only 9.87 million passengers

BIAL Whats working and Whats not working :

Retaining HAL Airport


Sanjeev's picture

UDF Charges calculation by AERA authority & expected by 1st Oct

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Ref Page No : 199 Table 128  and Page 203 table 130 give how much AERA is planning to pass the order.

BIAL Managment proposed Tariff on Page : 196 Table : 126

Page 291 : BIAL Promotors have No further equity infusion will be possible into  the Airport for Expansion

Capital amount needed was Rs 649 Crores and same BIAL managment has spent Rs 1100 crore to acquire Rs 110 Crore stake in this project

Also GOK and GOI r able to spend capital in METRO to the tune of       Rs 40,000 Crore by means of own funds and Loans,  but these not even 10% of the METRO project cost,  GOI & GOK not ready invest.  

BIAL Managment agreeing for Hybrid Till Model for UDF charges with 30% cross subsidization after AERA has taken tough stand and decision is expected after 19th Sept which last date for filling objection.

Also GOK is keeping quite on this matter means,  its agreeing to BIAL promotors decision even though it has 13% stake and given capital Rs 350 Crore without interest for 10 Years.


Sanjeev's picture

HAL Airport can be re-opened after 20 Years

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As per Concession clause mentioned above,  its 25 years other Airports are not allowed except Mysore and Hassan as Domestic within 150 Kms Aerial Dist.

GOI and GOK should make plans to re-open  HAL airport  by 2033 which is leagally allowed.. 

abidpqa's picture

Concession clause need to be

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Concession clause need to be questioned in Competition Commission. Bangalore is growing and capacity cannot be fixed arbitrarily. Other big cities have many airports. If this clause is for other reasons like traffic control, will it change after 25 years. But I dont think HAL airport need to be reopened. It needs to be completely closed down and given for real estate development.

murali772's picture


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It (HAL airport) needs to be completely closed down and given for real estate development.

Seriously??? But, don't we have enough of real estate development happening already?

Muralidhar Rao
idontspam's picture

Heard of the UDF lobbying?

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Enough with real estate & airports, everybody & his uncle wants an airport in his backyard, latest being the request for an airport in EC. FIrst put concrete roads in all of bangalore that will last 30 years at least, make pedestrians & cyclists travel safer, provision commuter rail then take up all this nonsense of additional airports

Just dont let companies set stupid clauses when no one is watching. It is not acceptable that BIA has access to so much land but are unwilling to consider non airport related revenues for UDF fixation. In which case they should not be allowed to HAVE any non air travel revenues at all.

Sanjeev's picture

Real estate lies unexplored as BIAL seeks UDF hike

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Burdened by rising air fares, passengers at the Bengaluru International Airport (BIA) could be in for a hefty hike in User Development Fee (UDF). 

But even if a Wednesday notification by the Airports Economic Regulatory Authority of India (AERA) for a fresh consultation paper offers a temporary reprieve, the air commuters would eventually end up paying for the BIAL’s inability to raise revenue from the vast real estate adjoining the airport.

Two years before the airport construction took off, the Bangalore International Airport Limited (BIAL) had taken possession of 4,008 acres of land on concessional rental terms from the State government. Besides the runway, terminal and other airport infrastructure, a big chunk of this land -- valued then at Rs 175 crore -- was earmarked for real estate that could eventually generate big ticket revenue for the shareholders. But, as airport infrastructure experts point out, the land remained largely undeveloped in the last five years.



BIAL has now linked revenue from an increased UDF with its airport expansion plans. At a stakeholder consultation meeting convened by the Authority on July 22 this year, BIAL had cited the requirement for an additional equity infusion of Rs 649 crore to finance the airport’s future expansion. All the shareholders, including the Centre, State and the private promoters had expressed their inability to infuse any additional equity. Land monetization, BIAL had maintained, might not generate enough funds in the current market situation. 

The Concession Agreement (CA) had given BIAL the rights to generate its own revenue by developing commercial ventures on the allotted land. The suggested list included projects such as “hotels, restaurants, conference venues, meeting facilities, business centres, trade fairs, real estate, theme parks, amusement arcades, golf courses and other sports and/or entertainment facilities, banks and exchanges and shopping malls.”

Infrastructure experts contended that if BIAL had taken up these projects in right earnest, it wouldn’t have had a reason to depend on a UDF hike to raise funds. 

Single-till model

AERA insists that single-till model to calculate UDF is the best for passengers as under this, they had to pay the least. In this model, both aeronautical and non-aeronautical charges are considered to calculate the airport charges. The dual-till model considers only aeronautical activities, while a hybrid model takes into account all the aeronautical and 30 per cent of the non-aeronautical revenue.

BIAL had stoutly refused the single-till model, citing the CA, before agreeing for a 30 per cent cross subsidisation under the hybrid-till model. However, it sought a special consideration to raise funds for further expansion and debt repayment.

Under the airport’s current share-holding pattern, the private promoters hold 74 per cent. These include the GVK Group (43 per cent), Siemens (26 per cent) and Zurich Airport (5 per cent). The Airports Authority of India (AAI) and Karnataka State Industrial and Infrastructure Development Corporation (KSIIDC) hold 13 per cent each.  

The State government had extended an interest-free capital of Rs 350 crore for ten years to BIAL under a State Support Agreement. However, it turned down a request for another Rs 150 crore equity participation. Many infrastructure experts find this hard to digest. Contended one of 

them: “The State and Centre are able to spend Rs 40,000 crore through own funds and loans on the Metro project. But they are shying away from investing in an airport, the cost of which is pittance compared to the Metro project. They could get much higher returns here, every year. This should have been a great opportunity.”

Good article by DH,  will GOK and GOI wake up on how BIAL is sitting on gold mine.

With AERA going for one more round of consultation fees,  Commuters travelling via BIAL will not charged more for some more time.   So it may take another 1/2 months time.


Sanjeev's picture

Hosur Aerodrome close to Electornic City capabale of 737 Boeing

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Taneja Aerospace TAAL owns a private airfield (Licensed) located at Hosur, 50 km from Bangalore city. The airfield enjoys a strategic location - it is a twenty-minute drive away from Electronic City, the hub of the software industry in Bangalore. In terms of time, the airfield is actually closer to Electronic City than Bangalore Airport. The airfield is capable of receiving Airbus A 320 and Boeing 200-900 / B737 – 200 -900 class of aircraft and is equipped with a Night Landing Facility as well as with basic Navigation Aids. Support services available at the airfield include refueling, Fire Fighting equipments, parking, aircraft hangar accommodation, crew rest area, guest house, aircraft maintenance facilities, aircraft cleaning services etc.

Airfield & MRO facility agreement with Air Works India (Engg) for establishment of commercial Aircraft Maintenance and Operating Aviation Infrastructure - Airfield & MRO Division services at TAAL's private airfield (Licensed) at Hosur, near Bangalore. The runway at this airfield is capable of accepting Airbus A 320 and Boeing 737 Series class of aircraft and the hanger is capable of accommodating Narrow Body aircraft.

With Runway : 2287 Mtrs and 45 meter wide   as against BIAL airport runway : 4000 meters and 60 meter width.

Hosur Airodrome has 22.25 Meter ATC tower against 65 Meter tower of BIAL.

Now if one looks back why Infosys Cheif Murthy was asking about airport at Hosur close to Electronic city.

Any way,  Bangalore has  five runways :

BIAL, Yelahanka, Jakkur, HAL and Taneja at  Karnataka Boarder. 

Will BIAL Bangalore able to get MRO business,  already Hyderabad has, Delhi, Mumbai and now Hosur taking off.
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