GMR Infrastructure subsidiary GMR Airports (GAL) has received the Letter of Award (LoA) for the development and operation of a greenfield international airport at Bhogapuram in the Indian state of Andhra Pradesh.

The Andhra Pradesh Government has awarded the Bhogapuram Airport project to GMR.

Under the terms of the agreement, GMR will design, build, finance, construct, develop, upgrade and modernise the airport.

GMR Airports will operate and maintain Bhogapuram Airport for 40 years.

It is extendable by an additional 20 years through an international competitive bidding process, with the company having RoFR of 10%.

Last year, the existing civil enclave at Vishakapatnam Naval Airfield had handled 2.78 million passengers and around 4,400t of cargo. 

During the last five years, passenger traffic at Vizag Airport has increased at 21% CAGR.

According to GMR, the airport had ranked fifth amongst the custom airports in India in terms of cargo traffic.

The airport site lies on the border of Visakhapatnam and Vizianagaram districts, and is approximately 45km from Visakhapatnam city and 25km from Vizianagaram.

The proposed greenfield airport site for Bhogapuram Airport is strategically located on the east coast and aims to benefit from the vast catchment area surrounding the region.

GMR Airports business chairman GBS Raju said: “We are very happy to be partnering with Government of Andhra Pradesh to develop, operate and manage the prestigious Bhogapuram International Airport. We are excited about the potential of this region.”

In February 2019, GAL had emerged as the highest bidder for the project on a PPP basis, the company said.

In 2017, the airport received environmental clearance.