Karnataka Government Grants Long-Term Lease To Bengaluru Airport Till 2068

In a significant development for aviation in Karnataka, the state has officially agreed to extend the concession agreement with Bangalore International Airport Ltd (BIAL) by an additional 30 years post-2038.

BIAL, the operator of Kempegowda International Airport (KIA), one of India's busiest airports, located on the outskirts of Bangalore, had requested the extension.

The decision was confirmed by officials in the Infrastructure Development Department, stating that the state government had issued a notification, fulfilling the request made by BIAL. Although an order to extend the lease had been issued in October 2020, it required a gazette notification for formalisation, which has now been completed, as per legal requirements.

BIAL highlighted the necessity for the extension from a financial standpoint, particularly for lenders, ensuring a clear term period beyond the repayment period of project loans. Additionally, substantial investments in airport expansion and related infrastructure were cited as contributing factors, reports Deccan Herald.

As per the agreement, the concession period has been prolonged from May 2038 to May 2068. Moreover, the land lease agreement has been revised, increasing the site cost to a maximum of Rs 302.15 crore from the current Rs 211.78 crore.

Silence Surrounds HAL Airport

While the extension agreement was originally accompanied by a clause permitting BIAL to operate the HAL airport for civilian use, the recent notification does not mention this provision. This decision diverges from the October 2020 state Cabinet's consent, which had included the clause.

The clause granting BIAL the option to manage the HAL airport was primarily to circumvent the 150-km clause regarding the operation of a second airport within Bengaluru. However, Hindustan Aeronautics Limited (HAL) authorities have reportedly shown disinterest in reopening the HAL airport for general public use.

"A study was conducted, but HAL expressed reluctance. Consequently, the proposal has been abandoned," stated a senior government official, shedding light on the situation.