By Aglaia Staff

A Hyderabad-based company, GVK, has given Mumbai a spanking new international airport and it took almost seven years. At a cost of Rs 12,500 crore, 4.4 million square feet and Mumbai now has a new international airport.

In an interview with the media, the group’s chairman GVK Reddy and vice chairman Sanjay Reddy discuss what went behind the scenes to put the marvel together.

Below is the transcript of the interview.

Q: The Mumbai airport is finally taking off. Airports have now started to contribute almost 70 to 80 percent of the group’s overall revenues, contributing a majority of the group’s operating profits as well and that was a very different story seven years ago. Is this now going to be in that sense the driver as far as the growth phase for GVK is concerned in the future? GVK Reddy: It is an excellent opportunity for us to grow further. We have been in the infrastructure business. Now the airports have become major business for us and it is going to grow our business very much. We are planning to expand, not only here but in other parts of the world.

Q: How soon are you at looking at international expansion because your contemporaries and your peers within India have already done that? They have gone international, the experience hasn’t been particularly great but nevertheless they have chosen to go international. How soon can we see GVK go international? GVK Reddy: We are already developing two airports in Indonesia. They are in initial stages.

Q: It’s a complicated business developing, running, managing airports. Would you like to position GVK as the airport specialist in the future? GVK Reddy: The thing is what you say is very difficult and a complicated business. We started first with this airport and without any knowhow, today we have got an excellent team and excellent knowhow. We are doing extremely well and the airport itself is an example. Now we will extend the knowhow to other areas.

Q: The last conversation that we had at an airport was six years ago at the old terminal and you were talking to me about the constraints and challenges of being able to develop this airport. Instead of expanding horizontally you actually had to expand vertically because of the nature of the constraints that you have been faced with. What has been the biggest challenge of putting the Mumbai airport together? Sanjay Reddy: This project was extremely complicated — the mother of all challenges. The key being that everything revolves around the lack of land. We had very limited land, which was also occupied. So the question was how…

Q: [Interrupts] so you wanted to demolish and drive before you actually even started construction? Sanjay Reddy: We actually demolished more than we actually built in this project so it was a challenge to move people. With the challenges, the question was how do we differentiate ourselves from the rest in India and globally because the vision was Mumbai one of the best airports in the world. My father has always said that whatever we do we have to do the best — no compromise on quality or design, etc. So, we thought of art, which is very close to my heart, and something we could showcase because India has so much of it. So starting from Maharashtra and across from Kashmir to Kanyakumari, Rajasthan to Nagaland, we showcased Indian art through a three-kilometer-long art wall. The focus for us is not really foreigners, the focus was Indians because we have forgotten what India is. It becomes very important that in a public place like an airport, they will see and enjoy art and take back some of that mentally with them. So they continue to appreciate what India is about.

Q: I will talk to you more about the design aesthetics and of course the peacock motive which is evident to all through and in fact that is the centerpiece as far as your design esthetic is concerned. But I want to talk to you about the economics: this is smaller than the Delhi airport, smaller than the T3, which is the international airport in Delhi. You are going to be able to carry 40 million passengers, which is higher than Delhi, which is at 34. How does the cost and the economics work? Sanjay Reddy: I think economics is extremely important. The second aspect that we looked at other than showcasing art was because we had limited land and we want to differentiate ourselves both in terms of efficiency and cost – that was another focus area where we designed the terminal in such a way that it is one of the most efficient terminals in the world. As you mentioned the Mumbai terminal size is 4.4 million square feet compared to Delhi, which is 5.4 million square feet. Its 20 percent smaller but it can actually handle 20 percent more passengers.

Q: How have you done that? Sanjay Reddy: As you mentioned, we went vertical and we have reengineered the way airports have been built all over the world. Instead of having domestic and international next to each other, we have domestic in level three and international at level four. So, what happens with that is that all the boarding gates — they are called swing gates — we can use them during the day time for domestic flights and night for international flights. So, the whole efficiency paradigm is completely changed and more importantly what that does for us is the cost per passenger comes down.

Q: What would be the lowest cost for passenger here at Mumbai you think? Sanjay Reddy: Not only in India, anywhere in the world. If you compare with any European airports, it is only about 15-20 percent of the cost per passenger. Even compared to Asian airports like Beijing, Hong Kong and Singapore, they are only 30 percent of the cost. Compared to Indian airports of similar size, we are only 70 percent of the cost even though our finishes are far better than any of these places. So we have been able to manage that with a lot of ingenuity and engineering.

Q: Talking about the finishes and it is an interesting comment to make because this art wall is showcasing India and the India story but there is very little else that we can see that we can see that is made in India as far as this airport is concerned. Is that disappointing and it is a scale issue, we do not have companies that design and manufacture to be able to address this kind of scale and also precision? Sanjay Reddy: We needed 22 lakh square feet of granite of the same colour, same consistency and delivered in a short time. Unfortunately, in India, we do not have the ability to deliver on that scale and precision. So, we went to the best [abroad] to see that we do not compromise on quality.

Q: Were there moments over the last six-seven years where you thought that this was not worth the headache, it was not worth the trouble? GVK Reddy: I never think like that. People from Mumbai never expected that there is going to be [such] a new terminal. I told Sanjay that as humans we won’t be here forever, but the airport will remain forever. We have to do something for the city so we took a challenge to do that. Q: Are you willing to take more challenges, do you have more appetite for risk? GVK Reddy: Always.

Q: So the next [Navi] Mumbai airport is on the cards. I know you have the right of first refusal — in the sense you have to match the highest bid [to get it] but is that something that you would consider or are you looking at? GVK Reddy: We would not like to discuss that.

Q: You are a proud father today. GVK Reddy: Yes, because this is a thing which is not possible. We cannot repeat it again. Q: The same question that I just asked your father and that is whether you have more appetite for risk and if the Navi Mumbai airport is something that would interest you given the experience that you had with this one? Sanjay Reddy: As far as we are concerned, right from the first business my father entered into, risk and challenges are part of our DNA. He has not a single project that I can think of, which came to us easily and that is why I said this project has been the mother of all challenges. Now once we have reached the peak of challenges, anything else which we look at will be relatively easy because I cannot think of anything more complicated than this.

Q: You are not giving me a straight answer on whether you are going to go for Navi Mumbai? Sanjay Reddy: We are going to bid for Navi Mumbai like everybody else but we will see how it goes because we do not know the terms. We have no idea about the project.

Q: Since we are talking about what passengers are going to experience, let’s talk about what this airport is going to mean as far as GVK is concerned. There are question marks on what happens as far as real estate is concerned as part of your agreement, 10 percent of the land acquired can be used for non-aeronautical purposes. How soon can we expect that to takeoff, the monetization of the real estate to takeoff? Sanjay Reddy: We have gone through the process. We have got all approvals right now. We are in the final stages.

Q: But it has been delayed? Sanjay Reddy: It’s been delayed but now we are at a stage where all approvals are in place. We have already gone through the first phase of monetisation bidding and very shortly maybe in few months, if not weeks, we should be able to come out with the first set of monetisation.

Q: How soon can we expect you to see returns on account of that? Sanjay Reddy: Real estate is a big element of our project and it will continue to come in but the most important thing was the first step because if the first step is done right then other steps will become much easier.

Q: Give me a sense of what we can expect over the next few years as far as real estate piece is concerned? Sanjay Reddy: Immediately within the next few months we can expect monetisation of about 1.5 to 2 million square feet, which is quite significant.

Q: Larsen and Toubro (L&T) is the contractor as far as this particular project is concerned. I believe they have 25,000 people working on this project onsite. Take us through a day in the life of T2? Sanjay Reddy: It was very exciting. From GVK’s side, we have about close to 300 people driven to build this project.

So, we handpicked these people very carefully and the results show. Q: What are you most worried about? I know terminal three in Delhi faced the wrath of the monsoon and Delhi monsoon is not even comparable to what happens in Mumbai. Is that a big concern for you? Sanjay Reddy: We know monsoon is a challenge in Mumbai and we planned for that. I am not saying that we will not face issues but all I can say that the engineering has taken everything into consideration

. If there are some gaps that have been not properly finished or something like that that will be fixed.

Q: There is going to be questions and criticism about whether we really need such opulence. At the end of the day, it is an airport, you check in, you checkout and you are not going to be spending long hours over here. How did you react and respond to criticism of this sort? Sanjay Reddy: If someone in a desert did not think of doing something like what they did in Dubai, or creating such projects in Singapore and Hong Kong, those cities and countries would not exist. Airports are more important for an economy than one can imagine and people do not realise how important airports are. They actually drive economies of whole country. I do not think this is about opulence or showcasing glamour but it is about the country, its people, aspirations. So from my father’s perspective, from GVK’s perspective, this is a gift to the city of Mumbai. Once people start enjoying it, they will want to enjoy more and more.

 

 Mumbai Airport: Mother Of All Challenges
share save 171 16 Mumbai Airport: Mother Of All Challenges