GMR-Terna consortium gets LoA for new Crete airport.

The Government of Greece has issued a Letter of Award to the consortium of GMR Airports Ltd. (GAL) and the Terna Group for the development, operations and management of the New International Airport of Heraklion at Crete.

GAL, a subsidiary of GMR Infrastructure Ltd., is the designated airport operator for the project. The consortium was declared a provisional contractor in June 2017. Greece is a major international tourist destination, with over 27 million tourists per annum. Crete is the largest and most visited island in Greece.

Heraklion airport, located in Crete, is the second-largest in Greece and has witnessed a CAGR traffic growth of 10 per cent over the past 3 years. The current airport, which is facing capacity constraints, will be replaced by the new facility.

The scope of the project involves design, construction, financing, operation, and maintenance of the New Heraklion Crete New International Airport. The greenfield project has a concession period of 35 years, including Phase 1 construction of 5 years. Expected capex for Phase 1 construction is €520 million.

The entire project will be funded through a mix of equity, accruals from the existing airport, and financial grant being provided by the Government of Greece. Hence, debt is not required in this project.

GMR Group’s airport portfolio has around 159 million passenger capacity in operation and under development.

HBL