HYDERABAD: GMR Airports, a subsidiary of infrastructure major GMR Infrastructure Ltd, Friday signed a concession agreement with Terna Group for the construction of a new international airport at Kastelli, Heraklion, in Grecian island Crete. The Rs 4,034 crore-project heralds GMR’s foray into the European Union region and would complement the group’s profitable airports business that could be hived off into a standalone entity.
The concession agreement includes design, construction, financing, operation and maintenance, as well as exploration of the new Heraklion international airport. The construction period spans 35 years, including five years for Phase-1. According to GMR, the consortium intends to invest over 500 million euros (approx Rs 4,034.28 crore), which will be completely funded through a mix of equity, accruals from the existing airport and financial grant being provided by the government of Greece. Therefore, debt isn’t required for the project.
Shares of GMR Infra rose nearly 3 per cent on Friday, following the announcement. On NSE, the scrip reached an intraday high of Rs 16.25 — also the stock’s two-weeks high — from the previous close of Rs 16.15, a rise of 3 per cent. On BSE, it closed at Rs 16.45, 2.2 per cent up from its previous close of `16.10.
Greece is one of the leading international tourist destinations, attracting nearly 27 million tourists per annum. Crete is the largest and most-visited island in Greece. The current airport at Heraklion is the second largest airport in Greece and has registered traffic growth at a CAGR of 10 per cent per annum over the last three years. However, it is facing a severe capacity constraint and hence, will be backed by a new airport at Kastelli.
“This is GMR Group’s first foray in the EU region and we eagerly look forward to expanding our footprint in the EU. The signing of the concession agreement is a significant milestone in the growth journey of GMR Airports and reinforces our leadership position,” said Srinivas Bommidala, Business Chairman, Energy and International Airports, GMR.