Only a new airport will now be built at Bhogapuram near port city Visakhapatnam as the Andhra Pradesh government dropped the proposal to develop an aerotropolis, official sources said.
GMR Airports Limited, which signed the concession agreement with the state government two days ago, confirmed it would be building only an airport and not the other facilities as previously planned.
In January 2018, the then Chandrababu Naidu government had said it wanted to build an aerotropolis that would include aviation-linked manufacturing units, aircraft maintenance, repair and overhaul (MRO) facility, research and development centre and test laboratories, multi-modal logistics, exhibition and conference centers, leisure and entertainment facilities, aviation education and training facilities.
The grandiose plan also included development of the airport with one runway, parallel taxiway and other infrastructure capable of servicing worlds largest aircrafts.
In the subsequent tenders floated by the AP Airports Development Corporation Limited (APADCL), GMR emerged as the winner and the successor government of YS Jagan Mohan Reddy also gave the go-ahead to GMR for the project development.
It has kept the concession agreement with GMR confidential and no details of the project were made public.
Sources in the APADCL, however, said the scope of the project has been completely altered and only the international airport would now be developed.
The APADCL Board had felt that the proposed aero city and aviation academy may not be feasible at this point of time. This was communicated to the state government. Accordingly, the other components of the plan were dropped, a top official of APADCL told PTI.
Consequently, the state government decided to retain 500 of the total 2,703 acres of land acquired for the aerotropolis, and hand over only 2,203 acres to GMR for development of the greenfield international airport.
A release from GMR said the project involves designing, building, financing, constructing, developing, operating and maintaining the greenfield international airport for 40 years, which could be extended by an additional 20 years through international competitive bidding.
An SPV GMR Visakhapatnam International Airport Limited (GVIAL) has been floated to take up the development.
As per the latest development model, GMR offered to pay Rs 303 PPF (per passenger fee) to the state government.
As per projections, the number of passengers is expected to be 3.1 million by 2021 and nine million by the year 2036.
The existing airport in Visakhapatnam, owned by the Navy, handled 2.78 million passengers in 2019 besides 4,400 tonnes of cargo.