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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
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Sep 2017 1
Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Contents
1. INTRODUCTION ......................................................................................................................... 5
1.1. Background ................................................................................................................................. 5
1.2. Scope of Services......................................................................................................................... 6
1.3. The Study Team .......................................................................................................................... 6
1.4. Data Collection ............................................................................................................................ 6
1.5. Report ......................................................................................................................................... 7
2. PROPOSAL BY HIAL.................................................................................................................... 9
2.1. Expansion Proposal ..................................................................................................................... 9
2.2. Capital Cost Proposal ................................................................................................................ 10
3. TRAFFIC REVIEW...................................................................................................................... 11
3.1. Project Information File ............................................................................................................ 11
3.2. Air Traffic Forecast by ICF Limited (2015) ................................................................................. 11
4. GOVERNING PARAMETERS...................................................................................................... 14
4.1. Report of the Inter Ministerial Group (IMG) on Norms & Standards for Capacity of Airport
Terminals (2009) ....................................................................................................................... 14
4.2. AERA Order No. 07/2016-17 ..................................................................................................... 15
5. EVALUATION OF THE PROPOSAL ............................................................................................. 19
5.1. Capacity Constraints ................................................................................................................. 19
5.1.1. Expansion of the Terminal Building ...................................................................................... 19
5.1.2. Capacity Calculation of Passenger Terminal Building ........................................................... 20
5.1.3. Expansion of the Kerb and Approach ramp .......................................................................... 24
5.1.4. Pier Expansion ....................................................................................................................... 26
5.1.5. Expansion of Apron ............................................................................................................... 27
5.2. The Capital Cost Proposal ......................................................................................................... 29
5.2.1. General .................................................................................................................................. 29
5.2.2. Expansion of the Terminal Building ...................................................................................... 29
5.2.3. Expansion of the Kerb & Approach Ramp ............................................................................. 31
5.2.4. Expansion of Apron ............................................................................................................... 31
5.2.5. Others ................................................................................................................................... 33
5.2.5.1. Preliminaries (Construction) ............................................................................................. 33
5.2.5.2. Insurance & Permits .......................................................................................................... 33
5.2.5.3. Design Development ......................................................................................................... 33
5.2.5.4. Supervision ........................................................................................................................ 33
5.2.5.5. Contingencies .................................................................................................................... 34
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Abbreviations
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
1. INTRODUCTION
1.1. Background
Development of new greenfield international airport at Hyderabad through PPP was awarded to
Hyderabad International Airport Limited (HIAL) and the concession agreement was signed
between HIAL and the Ministry of Civil Aviation (MoCA) on 26th December 2004. The Airport was
commissioned in 31 months, designed for a capacity of 12 million passengers per annum (mppa)
and 1,50,000 tons of cargo handling capacity per annum. The airport was inaugurated on 14th
March 2008 and started the commercial operations from 23rd March 2008.
Salient features of the concession agreement relevant to this report are highlighted below:
Concession
GoI grants HIAL the exclusive right and privilege to carry out the development, design, financing,
construction, commissioning, maintenance, operation and management of the Airport (excluding
the right to carry out the Reserved Activities and to provide communication and navigation
surveillance / air traffic management services which are required to be provided by AAI)
Scope of the Project: Development and Construction of the Airport on the site in accordance
with the provisions of the agreement, Operation and maintenance of the airport and
performance of the Airport Activities and Non-Airport Activities in accordance with the provisions
of the agreement, performance and fulfilment of all obligations of HIAL in accordance with the
provisions of the agreement
Fee: HIAL shall, in consideration for the grant by GoI of the Concession pursuant to Article 3.1,
pay to GoI a fee amounting to four per cent (4%) of Gross Revenue annually on the terms
specified.
Charges: The Airport Charges specified in Schedule 6 (Regulated Charges) shall be consistent
with ICAO (International Civil Aviation Organization) Policies. The Regulated charges set out in
Schedule 6 shall be indicative charges. Prior to Airport Opening HIAL shall seek approval from the
Ministry of Civil Aviation for the Regulated Charges, which shall be based on the final audited
project cost. From the date the Independent Regulatory Authority (IRA) has the power to
approve the Regulated Charges, HIAL shall be required to obtain approval thereof from the IRA.
Term: 30 years
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
There is a proposal for Expansion of Existing Terminal Building and Apron at Hyderabad
International Airport. The project consists of Civil, Electrical, Equipment, Air-Conditioning etc.
GHIAL has submitted their capital cost proposal to AERA for the second control period
(01/04/2016 to 31/03/2021). AERA has appointed RITES vide letter dt. 12th June 2017 to examine
the same.
a) To examine the proposal of the airport and assess the need for the proposed project and
its capacity/scope with reference to Passenger growth/Cargo Volumes/Air Traffic
Movement and also to suggest cost effective alternatives
b) To examine the building standards and designs proposed by the airport operator in line
with IMG norms/IATA/ICAO norms
c) To analyze the reasonableness of the proposed cost with reference to the tentative
ceiling decided by Authority vide order no. 7 dated 13/06/2016 based on the details of
the rates and quantity as per government/industry approved norms and advise the
Authority on the reasonableness of the costs
d) To review designs and specifications proposed in case the costs are assessed to be
excessive where the Projects are already in progress or the contracts are already
awarded. Further to examine whether proper procedures have been followed in the
award of the work
e) To assist AERA in case any litigation arises in future in connection with the
reasonableness of the cost estimates
f) To review and justify the reasonableness of time schedule of completion of work of
proposed by HIAL
g) To perform any other duties as may be deemed necessary and specified in the award
letter
The following team has been formed by RITES to undertake the assignment:
SN Name Designation
1. Mr.Pawan Chowdhry Group General Manager/Airports
2. Mr.N.Ganesh Babu Jt.General Manager/Airports
3. Mr.N.S.Rawat Jt.General Manager/Airports
4. Mr.Abhas Kumar Sr.Dy.General Manager/Airports
5. Mr.Ashuthosh Jaspal Sr.Dy.General Manager/Airports
6. Mr.V.S.Solanki Sr.Dy.General Manager/Airports
7. Mr.Vivek Kumar Assistant Manager/Airports
8. Mr.Saurabh Pareek Assistant Manager/Airports
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Airport Expansion & Capex Proposal, Project Information File (PIF) for Airport Users
Consultation, September 2015 submitted by GMR Hyderabad International Airport
Limited
Concession Agreement for the Development, Construction, Operation and Maintenance
of the Hyderabad International Airport between Ministry of Civil Aviation, Government
of India and Hyderabad International Airport Limited dt. 20th Dec. 2004
Order No. 07/2016-17 dt. 13th June 2016 issued by AERA in the matter of Normative
Approach to Building Blocks in Economic Regulation of Major Airports – Capital Costs
Reg.
Letter No. GHIAL/2016-17/SPG/1298 dt. 22nd March 2017 by GMR forwarding the
descriptions for the various elements of the project along with area and cost estimates
Letter No. GHIAL/2017-18/SPG/1303 dt. 29th April 2017 by GMR forwarding the detailed
project cost break-up along with quantities and unit rates & drawings
Cost estimate for RGIA expansion project
Final Report on Hyderabad International Airport Traffic Study by ICF Limited, January
2015
Geo technical investigation report by Geo Technologies, Nov – Dec 2016
RGIA Update Master Plan – 2014, Summary Report by GMR, Jan. 2015
Master Plan Review 2016, Final Report, RGIA by Landrum-brown, April 2017
Request made by various Airlines for night parking
Planned Work Schedule submitted by GHIAL
1.5. Report
Based on the study of data provided by HIAL and field visit to Hyderabad, the draft report was
prepared and submitted to AERA on 14/07/2017, followed by a power point presentation on
20/07/2017. As advised by AERA vide letter dt. 3/8/17, the findings were also discussed with HIAL
on 08/08/17. The following additional data has been submitted by HIAL on 11/08/2017.
This report sets out the findings by RITES of the need for expansion of existing infrastructure and
capital cost thereof at Hyderabad International Airport on behalf of the AERA. This exercise is
undertaken to assist AERA in assessment of capital expenditure and determination of UDF
thereof. It is important to note that the findings and outputs are provisional and that the capacity
analysis is subject to consultation and refinement.
The remainder of this report is structured as follows. Section Two describes briefly the proposal
submitted by HIAL; Section Three analysis of the Air Traffic; Section Four the governing
parameters; Section Five the Evaluation of the proposal and Section Six the Findings.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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2. PROPOSAL BY HIAL
2.1. Expansion Proposal
The submission made by GHIAL has been forwarded to RITES by AERA. The major components of
the proposed capital expenses include the following heads:
Terminal Forecourt
o Expansion of Airport Forecourt by two modules
o Weather-proofing of Airport Forecourt
o Additional 3rd connecting bridge and central opening at departure level
o Increasing the circulation space at Airport Forecourt departure level by
providing a cantilever slab on the south side of ramp
o Four additional lanes for up and down ramp including associated works
Expansion of the terminal
o East side expansion by 1 check-in module, leading to additional space of
14,806 sqm
o West-side expansion by 2 check-in modules, with additional space of 35,350
sqm
Pier Expansion
o East-side pier expansion (addl. Space of 34,507 sqm) to accommodate 12
contact stands
o West-side pier expansion (addl. space of 16,512 sqm) to accommodate 5
contact stands
Apron Expansion
o West side covering an area of 1,26,437 sqm for stands and access taxi
provision
Expansion of the approach ramp & Kerb
The total capital cost for expansion of the airport during the second control period is
estimated by GHIAL at Rs. 2224.26 Crores inclusive of insurance & permits, preliminaries
(construction), design development, supervision, contingencies and interest during
construction as per the break up given below. The proposal submitted by GHIAL is enclosed
at Annex ‘A’.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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3. TRAFFIC REVIEW
3.1. Project Information File
In the project information file submitted by GMR Hyderabad International Airports Ltd. in
September 2015, the following has been stated:
ICF Base case forecasts for Hyderabad airport reach 43 million total passengers by
2038 at a CAGR of 6.9% from 2014. The growth rate adopted is as given below:
As per the forecast, the passenger traffic will reach 18.445 million by 2021, with
13.638 million domestic passengers and 4.807 million international passengers.
As per actual, the total passenger traffic handled by the airport in the FY 2017 stood
at 15.10 million as against the forecast of 12.827 million. The international
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
passengers handled remained at 3.37 million and the domestic 11.732 million as
against the forecast of 3.340 million and 9.487 million respectively.
As per the forecast, by 2038, the airport will handle over 300,000 aircraft movements.
The growth rate adopted for air traffic movement is as given below.
As per the forecast, the airport will handle 1,58,000 aircraft movement by 2021, with
1,27,000 domestic and 28,000 international passengers.
It has been observed that the growth in international, domestic and total passengers
remained at 10%, 12.3% and 11.7% respectively during the period 2009 to 2017.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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120000
100000
80000
60000
40000
20000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
It has been observed that the growth in international, domestic and total passengers
remained at 7.9%, 5.9% and 6.2% during the period 2009 to 2017.
Average passenger per aircraft stands at appx. 150 for international flight and 108 for
domestic flight.
As per actual, the airport handled 22,261 international aircraft movements and
1,08,452 domestic aircraft movements in the FY 2017 vis a vis 20,000 and 91,000
predicted for the year. Thus, the traffic growth is more than projected.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
4. GOVERNING PARAMETERS
4.1. Report of the Inter-Ministerial Group (IMG) on Norms & Standards for Capacity of
Airport Terminals (2009)
IMG has deliberated in detail on various key issues and made following recommendations:
Keeping in view the trend in air traffic in last few years, a span of five years be adopted for the
projects planned during the current five-year plan period, i.e., up to 2011-12. Thereafter, as
the growth rate stabilizes, the span for making projections should be increased to 7 years for
a more realistic assessment.
_ Smaller airports (< 5.0 mppa) – 10th year from Planning year.
_ Bigger airports (> 5.0 mppa) – 7th year from Planning year.
Methodology given in ICAO Manual on Air Traffic Forecasting by finding ratios from historical
data and recent studies be adopted. As per ICAO Manual, forecasts of peak period passengers
are to be obtained from annual forecasts by applying ratios of busy period traffic to annual
traffic derived from actual data at various airports.
Actual data for the past five years should be analyzed to determine the Peak Hour Traffic and
the trend growth thereof. Projections for the Design Year should be made based on the trend
growth in the past. AAI should make arrangements for data collection of Peak Hour Traffic in
respect of all non-metro Airports, so that same is available at the time of planning expansion
of these Airports.
In absence of actual data, the Peak Hour Traffic may be estimated based on ratios given in
Table below.
In the event that requisite data is not available for airports with traffic above 5 million
passengers per annum, the above ratio-based norms may be considered in the interim.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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Level of Services ‘C’ as per IATA Airport Development Reference Manual (Jan 2004) denotes
good service at a reasonable cost. Therefore, this level could be used for design for target
demand in the design year. The unit area specified in paragraph E below represents Level of
Service ‘C’. Net impact of this norm would be that in the initial years, the passengers may
experience LOS ‘A’ or ‘B’ and as the traffic increases LOS ‘C’ would be achieved.
Overall space/area norm should be such as to provide a reasonable level of service for all
components required in a Terminal Building. Commercial or Retail area providing amenities
like food & beverages, book shops, counters for car rental, vending machines, public rest
rooms etc., normally require 8-12 per cent of the overall area, and should be planned and
provided accordingly. In bigger airports, i.e., with annual passenger traffic exceeding 10
million, commercial area could be up to 20 per cent of overall area. Keeping in view the IATA
norms and discussion above, the norms as given in Table 4, are considered appropriate for
Indian Airports.
IMG recommended that the Appraisal Committee should specify the ceiling unit cost and the
architects/engineers of AAI should plan and implement the project within the ceiling, subject
to revision on account of increase in WPI.
In the case of airports developed through Public Private Partnerships, the project authorities
may adopt a case by case approach with respect to norms relating to unit area and unit costs.
Based on the judicious consideration of international best practices and financial viability, the
norms may be specified in each case prior to inviting bids for private participation.
i) Pending finalization of a norm in this regard after going through a more rigorous
process, the tentative ceiling cost of Rs.65000/- per sqm of the terminal building and
Rs. 4700 per sqm for the Runway/taxiway/Apron (excluding earthwork up to sub
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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ii) The airport operators are advised to relook at the costs proposed in their submissions
and justify the increase, if any, over and above the ceiling rates as indicated above.
iii) The Airport operators are expected to evaluate the costs in adoption of various
alternatives finishes and the corresponding benefits that accrue to users in case of
adoption of such alternative higher specifications.
iv) In case the rates are higher than the ceiling rate approved by the Authority, the
justifications, so submitted by the airport operators on actual incurrence of the cost
shall be examined by a duly constituted Committee of experts to be constituted by
Authority and based on their recommendations the final costs will be adopted.
v) These ceiling rates shall apply only in case of new projects where the works are yet to
be awarded. In case of awarded projects, the capital costs will need to be examined
by the committee approved for the purpose.
While arriving at Rs. 65,000/sqm for the terminal building and Rs. 4,700 per sqm for the
runway/taxiway/apron, the cost of construction at Cochin International Airport has been
taken as bench mark as given below:
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
HIAL has proposed to expand the terminal building by 1,01,175 sqm to handle around 20
million passengers per annum. The break up details of the proposed expansion is as under:
The existing terminal building built in the year 2008 is spread over an area of 1,17,339 sqm.
The building has been designed to cater 3200 php and to handle 12 million passengers per
annum.
The additional area now proposed is 1,01,175 sqm to handle additional 8 million passengers
per annum.
While evaluating the proposal, the following aspects have been taken into consideration:
1. The existing terminal building was commissioned in 2008 before issue of guidelines on
area norms by the Inter-Ministerial Group and therefore the area norms of 25
sqm/passenger for the integrated terminal suggested by IMG cannot be applied either
individually for the additional capacity or overall.
2. The existing building is planned such that the expansion of the terminal can be undertaken
in modules of 36 m.
3. The pier expansion is guided by the area requirement of departure lounge for
international and domestic passengers and the gate requirements.
4. The expansion has to be undertaken matching with the existing plan.
A team from RITES visited the Airport and noted that make shift arrangements are being made
to meet the peak hour passenger demand in the check in area.
The passenger terminal building is seven level building, two levels for arrival process, two for
departures and three levels for baggage makeup/sorting and backup offices/services. The PTB
has handled approximately 15 MPPA traffic last year (2016) and the dwell times at check-in,
Security/Immigration/Baggage Claim processes are constrained, particularly during
consecutive 4-5 hour peaks in domestic process at morning/evening and at international
peaks observed late night/early mornings. These peaks get further aggravated during early
morning hours when domestic & international peaks overlap and also during festival seasons
and other important events in the project zone. Also, it is observed that the domestic &
international piers/hold areas are segregated in the existing PTB, thereby reducing utilization
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
for domestic traffic during non-peak hours on the international side. There is capacity
constraint and the need for expansion of the terminal is felt.
The expansion possibilities to a passenger terminal building in an operating airport can only
be along the sides i.e. parallel to runway as the building depth is restricted by apron on one
side and departure/arrival ramps on the other side. Therefore, the proposed expansion
modules as planned are the only areas where expansion is possible.
The traffic data shows that the domestic traffic has grown at a faster rate as compared to
international, the split is approximately 80:20 at present and a 64:36 split in traffic is projected
between domestic & international traffic for the year 2021 assuming that growth in domestic
traffic will stabilize due to large base size and the international traffic will increase further due
to small base size.
Area Per Peak Hour Passenger = Total Build-up Area / Total Peak Hour Passenger
Unit area per Peak Hour Passenger (PHP) = 117339 Sqm / 6560 Sqm = 17.88 Sqm or say 18
Sqm.
which is well within the Inter-Ministerial Group (IMG) & IATA norms of 24-25 sqm per peak
hour passenger for an integrated airport terminal.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Unit area per Peak Hour Passenger (PHP) = 220339 Sqm / 8991 Sqm = 24.5 Sqm
which again is as per Inter-Ministerial Group (IMG) & IATA norms of 24-25 sqm.
It is also seen that the SQM Area Per Peak Hour Passenger has increased from 18 sqm per pax in
the existing building to approximately 24.5 sqm in the proposed expansion. But the same is
within the specified IMG/IATA norms and this increase in PHP area per pax (as compared to
existing) will also add flexibility to absorb additional traffic growth in future.
The required number of gates at an airport can be determined using the following equation:
𝑣𝑡
𝑛=
𝑢
Where:
Gate Demand Based on Enplaned Passenger per gate approach and Departures per gate
approach
The following gate demand has been worked out based on recommendations of IATA and TRB.
The Number of Contact gates required for International movement is worked out using
Enplaned passengers per gate and the same is tabulated below.
Similarly, the number of gates required for International movement were worked out using
the Departures per gate approach
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
It could be seen that the number of contact gates required for International movements works
out to the same value i.e. 10 (in C configuration).
On the similar grounds, the calculation for domestic gates has been calculated keeping in mind
that currently about 70 % of domestic passengers are moved through contact gates and this
figure is supposed to go up to 85% in design year.
It could be seen that as gate demand is projected based on assumption that enplaned pax per
gate would increase in the similar fashion. However average enplaned passengers per
departure would not increase substantially in near future unless the mix of wide bodied
carriers is increased quite significantly and that too in the given period under consideration.
Thus, the gate demand calculated from Departures per gate is more realistic which is
tabulated below.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Thus, the total demand of contact gates for the demand year works out to be 22.
The existing kerb has a length of 220 m and handling capacity of 1100 vehicles /hour in the
departure and 600 vehicles/hour in the arrival. Evaluation of the kerb capacity indicates that
the existing capacity is inadequate to meet the present-day traffic during peak hour. The
proposal for expansion of the kerb is considered essential. To accommodate expansion of the
kerb, widening of the approach ramp becomes a necessity.
The present level of service based on the curb length available and existing traffic mix has
been assessed and tabulated below for both the Arrival and Departure Ramp.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Both the Arrival and Departure Ramps are near saturation and future growth of traffic would
future reduce the LOS to lower level.
The assessment of LOS is also done for the future traffic after additional Ramps for both arrival
and departure. The design peak traffic mix is kept the same while the kerb length has been
doubled after addition of ramp for both Departures and Arrivals. The design capacity for
arrivals is kept 1100 while that for Departures has been increased to 2000 vehicles.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
It should be noted that the Arrival Ramp would be reaching LOS C soon after 2021.
The pier expansion is worked out based on the TRB Models keeping in mind that the expansion
if required had to be done in modular templates as the Ultimate Master plan. The calculations
for area required are tabulated below.
Therefore, the expansion on East-side pier (addl. Space of 34,507 sqm) to accommodate 12
contact stands and West-side pier expansion (addl. space of 16,512 sqm) to accommodate 5
contact stands is justified
The airport at present has 42 stands of which 12 are contact stands (6 + 3x2).
To cater to increased traffic and requirements of night parking, the total stand requirement
for the year 2020-21 is proposed to be 52 apron stands. Hence, an additional requirement of
10 new apron stands have been proposed.
As per ICAO guidelines, the required number of aircraft stands at passenger terminal may be
estimated by the following formula:
Considering total peak hour ATM of 34 in the design year with total peak hour arrival of 14
domestic and 3 international aircraft and a turnaround time of 45 minutes for domestic flight
and 120 minutes for international flight the approximate aircraft stand requirement for the
design year works out as under:
S = 45/60 x 14 + 1 = 12 stands
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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S = 120/60 x 3 + 1 = 7 stands
Thus, the demand for total aircraft stand requirement of 52 projected by GHIAL is considered
reasonable as some of the contact gates will also utilized for night parking.
Area Requirement
The approximate area required for remote stands for Code ‘C’ type of aircraft is 3700 sqm per
aircraft. Thus, the total area of additional stands works to 37,000 sqm. However, keeping the
expansion of apron in symmetry with the existing configuration and as proposed in the Apron
development plan drawing GADL/PTB/2017/A/001 dt. 26.04.2017 submitted by HIAL, the
pavement area of rigid pavement works out to 46,000 sqm as against 72,450 sqm proposed
and the remaining area of associated flexible pavement for taxiways & vehicle movement area
works out to 72,734 sqm against 46,284 sqm.
HIAL vide their additional submissions have submitted apron development plan showing the
area break up of apron, taxiway & road pavement. It has been observed that an area of 15,025
sqm is earmarked for apron in between the HOS roads. The plan does not show planned
aircraft parking in this area. Part of this area was earlier earmarked for GSE in the initial
submission made by HIAL. The area between HOS roads earmarked as apron is not conducive
for parking of narrow/wide bodied aircraft having wing span more than 25m. The area for
rigid pavement for apron and flexible pavement for taxiway movement has accordingly been
considered as 46,000 sqm and 72,734 sqm respectively.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
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5.2.1. General
The capital cost proposal has been prepared by HIAL by adopting the following methodology:
Detailed rate analysis has been submitted by the firm for some of the items based on
present market rates
For some of the items, rates of the contract executed in 2005 has been adopted duly
applying escalation based on the indices published by Construction Industry
Development Council.
In the analysis of rates, the following charges have been adopted
o Water charges @ 5% for items of building works
o Water charges @ 1% for items of pavement works
o Overhead Charges @ 10%
o Contractor’s profit @ 10%
o Working in operational area @ 5% for some items and 10% for some items of
work
Cost of equipment works based on vendor quotations
Escalation @ 5% per annum has been adopted on item rates which are based on
contract executed in 2005 and market rates/quotations obtained in 2015
Escalation has been adopted for the equipment and finishing items till 2021 i.e. till the
anticipated completion of the project
An amount of Rs. 1449.83 Crores is catered in the proposal for expansion of the passenger
terminal building which includes Civil and Finishes, MEP Systems, Airport Systems and IT
systems which constitutes to 65% of the total capital cost proposal.
GHIAL has submitted along with their proposal the analysis in respect of the items for arriving
at the cost. The details provided for major items has been scrutinized and the observations
are as under:
a) For the Civil & Finishing works, GHIAL has adopted the rates of the previous contract
executed in 2005 and updated the cost by adopting escalation @ 5% per annum. In
support of the claim for escalation, GHIAL has submitted the indices published by
Construction Industry Development Council (CIDC). It has been observed that the CAGR
of price escalation for the period from Oct. 2007 to September 2015 works out to 4.45%.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Further, the escalation has been re-calculated based on the indices available up to
September 2016 which comes out to 4.03%. Accordingly, the escalation adopted has been
modified. HIAL vide its further submission, submitted the calculation of cost indices and
requested for review. The calculations have been reviewed and the proposed rate revision
of 4.03% by RITES is found to be in order.
b) The market rate of steel reinforcement has been taken on a higher side and the same has
been modified with the prevalent market rates.
c) The rate analysis submitted by the firm indicate inclusion of 10% towards overheads,10%
towards profit and 5% towards water charges. Overheads & profit @ 15% is generally
allowed by Government Departments like CPWD. Hence the claim of 20% towards the
same needs to be restricted to 15%. HIAL vide its further submission requested for review
in consideration of operational constraints of working in operational airport. This aspect
has already been considered separately where applicable and 5% has already been
allowed towards the same.
d) The water charges are taken at 5% in some of the items whereas the permissible % as per
CPWD norms is 1%. Hence the water charge has been revised accordingly. HIAL vide its
further submissions, submitted copies of water bills to elaborate the rationale behind the
higher water charges taken for Hyderabad Airport. However, water charges @ 1% is
considered adequate.
Based on the above observations, the cost of the Civil and Finishes has been reworked to
Rs. 709.98 Crores as per the details enclosed as against Rs. 783.62 Crores.
MEP Systems
A total cost of Rs. 125.18 crores has been proposed in the estimate towards HVAC and
Electrical works which works out to 15.97% of the estimated cost of civil works. These costs
have been arrived at based on vendor quotations. As per practice followed by CPWD, 15% of
the basic cost is allowed in the estimates towards internal electrification excluding air-
conditioning. Hence the estimated cost of Rs. 125.18 Crores is considered reasonable.
Airport Systems
A total cost of Rs. 453.11 Crores is catered towards airport systems including Passenger
Boarding Bridges, Screening system, Baggage Handling System, People Movers (Elevators,
Escalators and Travellators).
The Baggage Handling System (BHS) including baggage screening system is estimated to cost
Rs. 217.79 Crores. The passenger boarding bridge and passenger screening systems put
together cost 112.48 Crores. The costs are based on the vendor quotations duly escalated till
the completion period.
The cost of the baggage handling system is high due to the reason that the baggage processing
functions are distributed over 5 levels of the building, i.e., check in process at Level F and
baggage make up at Level C, the conveyors laid from Level F and spiralled down to Level C+
and further laid up to baggage make up area and to Level 4 room. The arrival baggage is
handled from baggage break up area located in level C and transported to Level D (Baggage
reclaim hall) through conveyors passing through Level C+. Further, baggage screening system
has also been proposed. The additional length of conveyor proposed is approx. 4000 m. The
vendor has supplied a quotation for Rs. 156.5 Cr. in July 2015 and the same has been escalated
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
till the proposed completion period i.e. till 2021. In the absence of a detailed work plans, in-
depth analysis and verification of the costs for such special equipment works is not feasible.
The proposed cost of people mover (escalator, elevator, travellator etc.) is Rs. 122.84 Crores
and the cost of passenger boarding bridge is Rs. 67.29 Crores.
The estimated cost of proposed equipment is supported by quotation from single vendor for
major items such as baggage conveyors, people movers, passenger boarding bridges etc.
obtained in 2015-16 duly escalated for the year 2020-21. Most likely, the cost of equipment
proposed is likely to cost less when the open bids are invited on a competitive basis. Further,
the cost escalation on the equipment is not likely to be at par with other construction
materials. It will therefore be prudential to consider the basic cost of equipment without
application of any escalation. Thus, the revised cost of airport systems works out to Rs.355
Cr.
IT Systems
Rs. 48.89 crores has been catered towards IT systems which is 6.5% of the cost of civil and
finishing works. This is considered reasonable in comparison with the provisions at NSCBI
Terminal Building, Kolkata in the year 2008 – 2010.
Thus, the revised cost of Passenger Terminal Building works out as below:
An amount of Rs. 108.50 Crores is catered in the proposal for expansion of the upper and
lower forecourt and connecting roads. This constitutes approx. 5% of the total cost proposal.
Based on the observations mentioned at para 5.2.2, the cost of expansion of the kerb &
approach ramp stands revised to Rs. 98.83 Cr.
An amount of Rs.129.38 Crore is catered in the proposal for expansion of apron and associated
works. The major constituents include:
Drain - 12.98 Cr
Others - 14.76 Cr
410 mm thick Pavement Quality Concrete laid over 200 mm thick dry lean concrete, 250 mm
sub-base of select fill material having CBR 12% at 98% MMDD and compacted sub-grade.
It has been proposed by GHIAL to provide 350 – 400 mm thick PQC over 170 mm thick dry
lean concrete with drainage layer of 400 mm thick over sub-grade.
The taxiway is proposed to comprise 110 mm thick bituminous concrete over 125 mm Dense
Bituminous Macadam, 150 mm WMM, 200 mm GSB and compacted subgrade.
The pavement section proposed for rigid and flexible pavements are similar to the existing
pavement.
The total area proposed for expansion is 118,734 including apron and associated taxiway
pavements. The overall cost per sqm works out to Rs. 10,896. This is inclusive of all other
associated works such as high mast lighting, drain, fuel hydrant, boundary fence etc.
The cost of rigid pavement for apron is proposed at Rs. 7,050/sqm and the cost of bituminous
pavement for taxiways at Rs. 3,600/sqm. The average cost of aircraft movement area
(pavements) works to Rs. 67.74 Cores i.e. Rs. 5,705/sqm as against AERA norms of Rs.
4,700/sqm.
For arriving at the cost, GHIAL has adopted market rates prevalent in 2015 duly escalated till
the anticipated completion. The rates analysis submitted by the firm indicate inclusion of 10%
towards overheads, 10% towards profit and 10% towards working in operational area.
Overheads & profit @ 15% is generally allowed by Government Departments like CPWD.
Hence the claim of 20% towards the same needs to be restricted to 15%.
Further, the claim for 10% extra for working in operational area does not justify as the
substantial cost goes towards the cost of materials. However, in consideration of the fact that
working in operational & restricted area requires extra efforts and additional safety measures
to be undertaken by the contractor. Hence the claim on this account may be restricted to 5%
Taking the above into cognizance, the rate of Rs. 7,050 per sqm and Rs. 3,600 per sqm for rigid
and flexible pavement will get reduced to Rs. 6,508 per sqm and Rs. 3,323 per sqm approx.
Accordingly, the cost of pavement works stands revised as under:
Total = 54.11 Cr
Similarly, the cost of drainage stands revised to Rs. 11.98 Cr and equipment & other works to
Rs. 44.91 Cr.
Thus, the total cost of pavement works heads stands revised as under:
5.2.5. Others
The capital cost proposal submitted by HIAL comprise the following provisions:
An amount of Rs. 34.00 crores is provisioned in the capital cost proposal towards preliminaries
@ 2% of the estimated cost of works. This is catered towards provision of barricading to the
work area, scaffolding for removal of existing glass façade etc., Operation readiness and
Airport Transfer, Labour camp for 4000 labour force, dust arresters, housekeeping, traffic
management systems, Temporary signage, temporary roads & access gates etc.
These are provisional sums and generally vary between 1% to 5% depending on the total
estimated cost of works. As per prevalent practices in India, these are in-built into the unit
rates to be quoted by the bidder for various work items or measured and paid separately. In
the global tenders, the preliminary items are costed separately. It has been observed that in
the earlier contract executed between L & T and China State, the cost of preliminary items
worked out to 11.72% of the total cost of Rs.262.87 Crores. Thus, the provision of 2% is
considered reasonable.
An amount of Rs. 20.00 crores is provisioned in the capital cost proposal @ approx. 1.5% of
the estimated cost of works towards insurance & permits which include CAR policy for entire
project cost, permits, licenses, inspection fee, certifications viz. Airport Certification, ICAO
validation, DGCA inspection, MIDT & OAG Data, PESO, PCA/ECA and all applicable statutory
fee.
An amount of Rs. 50.00 crores is provisioned in the capital cost proposal @ 3% of the
estimated cost of works towards design development.
5.2.5.4. Supervision
An amount of Rs. 92.20 crores is provisioned in the capital cost proposal @ 5.5% of the
estimated cost of works towards project management consultancy.
The quotes received for Design and Project Management consultancy in some of the recently
invited bids by Airports Authority of India for expansion of terminal buildings at major airports
are tabulated as under:
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Airport Est. Cost Area Appx. Cost PMC fee including Time
per sqm design and schedule
(Rs. (Sqm) excl.
construction
Crores) basement (Rs.) (deign +
supervision as per
constn.)
Quote received
through open bid on
QCBS
Jaipur 9+36
Airport 1177.74 125000 94,219 3.47% months
Chennai 9+36
Airport 2100 168800 1,24,407 2.79% months
Guwahati 9+36
Airport 913 77500 1,17,806 3.90% months
Trichy 9+36
Airport 764 60723 1,25,817 6.40% months
Lucknow 9+36
Airport 878.25 100000 87,825 6.94% months
HIAL vide its further submissions, submitted the details of design works already awarded
amounting to Rs.37.07 Crores supported with copies of work orders and planned for award
amounting to Rs.11.76 Crores totaling to Rs.48.83 Crores.
Towards the PMC, HIAL has indicated to deploy approx. 36-72 expert manpower for the period
commencing 2017-2021 (5 years) totaling to 3700 – 3800 man-months including planning
period from Sept 14 -16. Towards supervision, Rs. 92.20 crores is catered in the estimate. HIAL
has also stated that historically they have incurred 11.29% of the base cost on account of
project management and consultancies.
There is a need to restraint the cost incurred on design and project management. In
consideration of the similar works taken up by AAI through open competitive bidding, the fee
of 8.5% considered for design development and supervision by GHIAL appears to be on the
higher side.
In consideration of the fee quote tabulated above, a fee of 5% is considered reasonable for
design development and PMC for this magnitude of work.
5.2.5.5. Contingencies
Generally, contingencies for projects of this magnitude are catered at 3% of the estimated
cost.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
HIAL vide its further submissions, submitted extracts from project investment file & tariff
order published by AERA in respect of Cochin, RBI guidelines, Bureau of Indian Standard, and
technical audit report of MIAL in support of their claim for Contingencies.
The same have been studied and it has been observed that the amount of deviation of cost
from the initial estimate and revised cost is quoted as reasons for provisions towards
contingencies. Although, the details of the cost deviations are not explicit, predominantly it
appears on account of increase in escalation of cost. It may be clarified that in the proposed
cost estimate submitted by HIAL, the contingencies on account of price escalation is already
catered and in built into the rates till the date of completion of work. The provision of
contingencies @ 3% is towards physical contingencies including any modification to the scope
of work and unforeseen items. The draft BIS quoted by HIAL also indicate a range of 3 to 5%.
Considering the magnitude of the project, the provision of 3% towards contingencies is
considered adequate as presently followed by the government organizations such as AAI and
CPWD.
An amount of Rs.235.26 Crores towards interest during construction. This aspect may be
reviewed by AERA.
An attempt has been made to compare the cost of the new terminal building constructed at
Cochin and the proposed expansion of existing terminal building at Hyderabad as below:
As desired by AERA, a field visit was undertaken to Cochin by RITES expert on 20 th Sept 2017
to understand the design & specifications adopted by Cochin International Airport for the
construction of new international terminal building. Based on the data collected, the
difference in the construction cost between the new international passenger terminal
buildings at Cochin and the proposed expansion at Hyderabad has been broadly analyzed and
the major reasons are brought out as under:
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
Further, it has also been observed that the area of the new international terminal building at
Cochin is appx. 1,40,000 sqm and not 1,50,000 sqm as claimed.
A sub-head wise broad comparison of cost of the terminal buildings at Cochin, terminal
constructed at Kolkata by AAI, proposed terminal expansion at Hyderabad is given below.
Cost Difference from Cochin
Cochin Hyderabad Kolkata (Rs./Sqm)
Cost Rs. Per Cost Per Cost Banga Hydera-
Sub Head Cr % sqm Rs.Cr % sqm Rs. Cr % Per sqm -lore bad Kolkata
Civil Works 401.47 47% 26765 335.43 23% 32566 957.16 43% 48173
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
It can be seen from the above that the major difference is due to the exterior and interior
special finishes and the cost of Airports systems including baggage conveyor, escalator,
travellator etc. These mainly depend on the design of the terminal building and the type of
building structure i.e. whether RCC or steel structure and the number of floors. A detailed
comparison can be undertaken only when the detailed drawings and BoQ are available.
GHIAL has submitted the overall implementation schedule with expected date of
commencement as March 16 and completion in April 2020 i.e. spanning over a period of 4
years. The construction period starting July 2017 to April 2020.
The time for construction stipulated by AAI in some of the tenders for airport terminal building
projects for Project Management Consultancy including design and supervision is 9 months
planning & design and 36 months for construction.
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
6. FINDINGS
6.1 Findings
The findings of the exercise with reference to scope are summarized as under:
a) To examine the proposal of the airport and assess the need for the proposed project and
its capacity/scope with reference to Passenger growth/Cargo Volumes/Air Traffic
Movement and also to suggest cost effective alternatives
The proposal for expansion of the terminal building, apron and approach ramps submitted
by GHIAL is justified in view of the traffic trend and the growth witnessed in the recent
years at Hyderabad airport as discussed in Chapter 3.
b) To examine the building standards and designs proposed by the airport operator in line
with IMG norms/IATA/ICAO norms
The airport was commissioned in 2008, i.e. prior to issue of IMG norms. Hence, the area
standards recommended by IMG did not apply to the existing terminal building. However,
the total area of terminal building including the proposed expansion is within the norms
prescribed as discussed in Chapter 5. (para 5.1.2)
c) To analyze the reasonableness of the proposed cost with reference to the tentative
ceiling decided by Authority vide order no. 7 dated 13/06/2016 based on the details of
the rates and quantity as per government/industry approved norms and advise the
Authority on the reasonableness of the costs
A macro level examination of the capital cost estimate submitted by GHIAL has been
conducted based on the information provided by GHIAL and engineering in practice. The
revision to total capital cost is recommended as under:
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Analysis of Capital Expenditure on expansion of Terminal Building and Apron at Rajiv Gandhi International Airport,
Shamshabad, Hyderabad for second control period (01/04/2016 to 31/03/2021)
d) To review designs and specifications proposed in case the costs are assessed to be
excessive where the Projects are already in progress or the contracts are already
awarded. Further to examine whether proper procedures have been followed in the
award of the work.
The proposal is for extension of the existing terminal building and hence the specifications
of the proposed terminal building have to match with the existing building to provide
uniformity. The works are yet to be undertaken GHIAL.
***
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Sep 2017 39