A case study on GMR Infrastructure

By R VINAY KUMAR 11MBMA63

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GMR Infrastructure GMR Group, which is headquartered in Bangalore, is one of the fastest growing infrastructure enterprises in India with interests in Airports, Energy, Highways and Urban Infrastructure sectors. The company was founded in 1978 by Grandhi Mallikarjuna Rao. Employing the Public Private Partnership model, the Group has successfully implemented several iconic infrastructure projects in India. The Group also has a global presence with infrastructure operating assets and projects in several countries including Turkey, South Africa, Indonesia, Singapore and the Maldives. GMR Infrastructure Limited is the infrastructure holding company formed to fund the capital requirements of various infrastructure projects across the sectors. It undertakes the development of the infrastructure projects through its various subsidiaries. They are also actively involved in community service as a part of Corporate Social Responsibility.[1]. The Groups commitment to inclusive growth is achieved through its Corporate Social Responsibility arm the GMR Varalakshmi Foundation (GMRVF). GMRVF works with the under-privileged sections of the community in all the locations where the Group has business interests. The company was involved in the construction of Rajiv Gandhi International Airport Hyderabad and Sabiha Gken International Airport in Turkey.[2] GMR is also involved in the expansion and modernisation of Indira Gandhi International Airport - New Delhi. Airports Operated by GMR are:

Indira Gandhi International Airport - New Delhi Rajiv Gandhi International Airport - Hyderabad Sabiha Gken International Airport - Turkey Ibrahim Nasir International Airport - Maldives

The Groups strategy of being a power generation-focused, integrated player in the Energy space has resulted in a diversified fuel as well as tariff-mix. The Group today has 6 power generating assets with a total capacity of 836.8 MW and another 6 power generation projects under various stages of implementation with a diversified fuel mix consisting of coal, natural gas, and hydro that will eventually produce an additional 5000 MW. Recently it has completed setting up of a 25 MW solar power plant in Gujarat and two wind mills of 2.1 MW in Gujarat and 1.2 MW in Tamil Nadu. Besides these the Group also has around 600 Million Tons of proven coal deposits in mines located in Indonesia and South Africa. The Group has six operating assets in the Highways sector. Four more are under construction the 181 km HyderabadVijayawada project in Andhra Pradesh on toll basis; the 29 km Chennai Outer Ring Road state project in Tamil Nadu on annuity basis, the 99 km Hungund-Hospet stretch in Karnataka on toll basis and the 555 km long Kishangarh - Udaipur - Ahmedabad highway the first brownfield mega highway project of the country on DBFOT basis. The Groups projects in the Urban Infrastructure sector include a multi-product SEZ and Large Area Development in Krishnagiri, Tamil Nadu, a captive port based multi-product SEZ in Kakinada, Andhra Pradesh, Aviation and Logistics SEZ around the Hyderabad International Airport and development of a Central Business District around the Delhi International Airport.
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GMR Group chairman Grandhi Mallikarjuna Rao, a first-generation entrepreneur hailing from Srikakulam in Andhra Pradesh, pledged $340 million (Rs 1,540 crore), which is equivalent to his personal share in the infrastructure conglomerate, to improve education among the underserved sections of the society.[3] Going forward, the Group will actively seek opportunities in the core areas of infrastructure development. All these would be driven by a single minded path on translating the vision of the Group. GMR Group will be an institution in perpetuity that will build entrepreneurial organizations making a difference to society through creation of value. Overview: GMR Group is a Bangalore headquartered global infrastructure major with interests in Infrastructure. Founded in 1978, the Group is well diversified and professionally managed. The core businesses of the Group are in the sectors of Infrastructure comprising of Airports, Energy, Highways and Urban Infrastructure. The Group is also actively engaged in the areas of Education, Health and Community Services through its Foundation, reaffirming its grass root presence as a change agent of society in the field of Corporate Social Responsibility. A dedicated division - the GMR Varalakshmi Foundation, manned by committed professionals, oversee and manage these projects across the country. Having proven its credentials as a leading infrastructure conglomerate in India, GMR is expanding its operations globally. It has formed a separate division GMR International, to manage its overseas operations. The Groups specific projects are detailed below: Airports : GMR Hyderabad International Airport Limited (GHIAL): GHIAL is a joint venture between GMR Group, Malaysia Airports Holding Berhad, Government of Andhra Pradesh and Airports Authority of India. The airport has an ultimate capacity of handling 40 million passengers per annum and 1 million tonnes of cargo. The key features of the airport include an A-380 compatible runway, Modular Terminal Building with state-of-the-art IT technology, and a Business Hotel. The airport is strategically located providing excellent opportunity to develop it as a hub for domestic and international passenger and cargo traffic. The futuristic airport reflects the long term vision of its developers to build it as A major domestic and international hub. Delhi International Airport (P) Ltd (DIAL): DIAL, a joint venture between GMR Group, Airports Authority of India, Freeport, Era man Malaysia and India Development Fund has modernized and restructured the Delhi Airport.
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The airport has an ultimate design capacity to handle 100 million passengers per Annum and 2.3 million tons of cargo per annum. DIAL has commissioned the third runway which is amongst the longest in Asia. The runway and terminal is capable of handling A380 aircraft. The Group has developed a state-of-the-art integrated terminal T3 which was inaugurated on 3 July 2010. It is the biggest rd terminal in India and one of the largest in the world. GMR International : GMR Group seeks aggressive growth opportunities, by expanding its business bandwidth and presence in the global market place in the areas of its business interests. GMR International has been formed as a separate division to harness these business opportunities and is headquartered in London. The division currently manages the following projects-: Sabiha goken International Airport (SGIA) at Istanbul, Turkey: The consortium of GMR Infrastructure Limited, Limak Insaat Sanayi San Ve Tic A.S Turkey and Malaysia Airports Holdin gs Berhad, has commissioned the SGIA a year ahead of schedule. The BOT (Build Operate - Transfer) project involved the construction of a new international airport terminal with a 25 million capacity besides managing the existing domestic and international terminals. Male International Airport (MIA), Maldives: Recently the Group has won the bid to build, operate, modernize and expand the Male International Airport (MIA), Maldives on 29 June, 2010. A Joint venture between GMR Group and th Malaysian Airports Holding Berhad, the new airport will have the ultimate capacity of handling 5.2 million passengers. InterGen: As part of its business strategy to strongly position the Group in the Global Energy market, GMR acquired a 50% stake in InterGen, a leading global power generation company, headquartered in the Netherlands making it the largest ever acquisition of a global energy utility by an Indian Company. InterGen is one of the worlds leading independent power producers with a high quality asset portfolio, with an average age of operating plants of only 6 years. InterGen has operations in five countries and has 13 power plants located across the UK, the Netherlands, Mexico, Australia and Philippines, with 8,513 MW of gross operational capacity and over 5,500 MW of assets under development. Further, the Group has acquired InterGens 100% stake in Island Power a Singapore based global electrical utility. Energy GMR Power Corporation Limited, Tamil Nadu: Commissioned in 1998, the 200 MW Chennai plan t is the first Independent Power Project in Tamil Nadu. The plant has Indias first and only sophisticated sewage treatment unit, treating 7200 cubic meters of sewage per day to produce 5400 cubic meters of fresh water for plant usage. The power plant has received the renowned Dr. M. S. Swaminathan Foundation Award for Environment Protection. GMR Energy Limited, Andhra Pradesh: Commissioned in 2001, the plant is Indias first barge mounted combined cycle power plant. The 220 MW plan t
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achieves maximum thermal efficiency with virtually no sludge. The plant has been relocated to Kakinada. GMR Vemagiri Power Generation Limited, Andhra Pradesh: The Groups third power generation project with a capacity of 388.5 MW is located at Vemagiri in Andhra Pradesh. The plant uses natural gas as fuel and operates on a combined cycle technology. GMR Rajahmundry Energy Limited, Andhra Pradesh: The 768 MW gas based, thermal power project is being set up in Rajahmundry, Andhra Pradesh. The project is in advanced stage of development and is expected to go onstream by 2012. GMR (Badrinath) Hydro Power Generation Private Limited, Uttarakhand: This 300 MW Hydro Electric power project is the Groups maiden venture into Hydro Power generation and is expected to be operational by 2015. Kamalanga Thermal Power Project, Orissa: The 1400 MW coal based thermal power plant, in Kamalanga, is expected to achieve commercial operation by 2012. Talong Hydro Power Project, Arunachal Pradesh: The 160 MW hydro power project is located in the East Kemeng district and is expected to be commissioned by end 2016. Thermal Power Project in Chhattisgarh: GMR Energy signed a Memorandum of Understanding (MoU) with the Government of Chhattisgarh for implementation, operation and maintenance of a 1370 MW Coal based, Thermal Power Plant in the state. Bajoli Holi Hydro Power Project, Himachal Pradesh: The 180 MW hydro power project is a Run of the River project on River Ravi in the Chamba district of Himachal Pradesh. EMCO Energy Ltd., Maharashtra: The Group through its ownership of EMCO Energy Ltd. is developing a 600 MW coal based power plant in Warora, Maharashtra. SJK Powergen, Madhya Pradesh: GMR Energy Limited acquired SJK Powergen Ltd in 2009. SJK Powergen is developing a 1370 MW power plant in Shahdol, Madhya Pradesh. Upper Karnali Hydro Power Project, Nepal: The 900 MW hydro power project is being developed by GMR Group on a Build, Operate, Own and Transfer basis (BOOT) in Nepal. Upper Marsyangdi Hydro Power Project, Nepal: GMR has acquired 80% stake in Himtal Hydro Power Company Pvt. Ltd. who are developing the 600 MW Hydro power project on the Marsyangdi River in Nepal. Island Power Project, Singapore: An 800 MW natural gas based combined cycle plant is being set up in Singapores Jurong Island. In line with the Groups strategy to scale up its energy business and secure fuel supply the Group has acquired PT Barasentosa Lestari (PT BSL), an Indonesian Greenfield coal mining company. It has also picked up a 3 8.55% stake in Homeland Energy Group Ltd. (HEG), a listed company which owns coal properties in South Africa through its subsidiary the Homeland Mining and Energy (HMESA).
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Highways : The Groups Highway business has 6 assets and 3 projects totalling a length of 730 km. Four projects are on annuity model and five others are toll based. It Has commissioned six projects totaling 421 km. The 59 km, 4 lane highway between Tuni-Anakapalli on NH-5 in Andhra Pradesh, The 93 km stretch between Tambaram-Tindivanam on NH-45 in Tamil Nadu, the 35 km Tambala-Chandigarh project, the 58 km stretch between ThondapalliJadcherla and the 103 km Adloor Gundla Pochanpalli project on NH-7, the 73 Km Tindivanam - Ulundurpet BOT (annuity) project are already operational. Its three recent projects are the 181 km toll based Hyderabad-Vijayawada stretch in Andhra Pradesh; the 29 km annuity based Chennai Outer Ring Road project in Tamil Nadu and the 99 km toll based Hungund-Hospet project in Bangalore. Going forward the Group aims to expand its portfolio of assets in the Highways sector. Urban Infrastructure: The Urban Infrastructure sector was carved to manage the Groups foray into The businesses of SEZs, Property Development and construction. Multi Product SEZ in Krishnagiri, Tamil Nadu GMR is developing a multi product SEZ through a Joint Venture with Tamil Nadu Industrial Development Corporation (TIDCO) in Tamil Nadus Krishnagiri District. Spread over an area of over 3300 acres, this eco-friendly project will house Biotechnology, IT and ITES, traditional electronics besides diverse Manufacturing companies. The Group has also received in-principle approvals for setting up two other SEZs near the Hyderabad International Airport. GMR Projects - Construction : The Groups experience as one of the largest developers of Highways in the country has lead it to expand into the Construction business. This expansion gives the Group a strategic edge by reducing its dependency on sub-contractors, Centralizing procurement processes across projects and sectors and above all Makes the group highly competitive. GMR Property - Property Development: India is likely to maintain its leadership position in the IT/ITES domain and remain as one of the fastest growing economies of the world, driving up Business activity and the demand for commercial and hospitality assets too. With this business insight and also to meet the requirements from within the organization, GMR has set up the Property Development division, a natural Extension of its business capabilities. Vision: 'GMR Group will be an Institution in Perpetuity that will build Entrepreneurial Organizations making a difference to society through Creation of Value'.

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GMR INFRASTRUCTURE AIR PORT BUSINESS Delhi International Airport Limited (DIAL) Additional revenue potential from development of real estate asset Hyderabad International Airport (GHIAL) Development & Operation of the fastest growing Airport in the Country Uniquely positioned to capitalize on the current growth Key Project Features The second longest runway (4,260 m) in India with 10 entry/exit points (including 4 Rapid Exit). 42 aircraft parking stands; 12 Contact stands, 30 remote stands & 5 dedicated stands for cargo. 146 check-in counters, 16 of which are self check-in. 46 immigration counters; In-line baggage screening. 3 x 90 Mtr & 1 x 70 Mtr long baggage carousels, capable of handling 3 flights at a time on each. Business Hotel / Luxury Hotel / Convention Centre all in Novotel Hotel run by Accor Group. Facilities in Place : 28 beds slumber room & Spa Car park facility for 3700 cars Facilities in Place : 28 beds slumber room & Spa , Car park facility for 3700 cars. First Airport in India to get LEEDS (Leadership in Energy & Environmental Design) Silver rating. Initial Cargo Capacity of 100,000MT /annum; ultimate over 1.0Mn MT. 17 bedded Apollo Hospital at Passenger Terminal Building. Has a fuel farm with Open Access to 5 Oil Companies. GMR INFRA - ENERGY BUSINESS For Improving performance and competitiveness of a existing business GMR group started Acquisition of Coal Mines Secure fuel for thermal power plants through acquisition / joint development of domestic and international coal mines. Exploring opportunities in coal rich countries like Indonesia ,South-Africa and Austraila Acquired 10% stake in South African coal mining company with an option of additional stake of 40%, gaining more than 300MT of mine-able coal reserve. Alternate fuel opportunities Explore options for alternate fuel to reduce the reliance on a type of fuel . Leverage expertise to capture future growth in India and abroad Add further Energy assets diversified across fuel types in India. Bid for UMPPs where fuel supply has been secured. Invest in IPPs in neighboring developing countries with need for infrastructure expansion. Government support Explore brown field opportunities through acquisitions of development rights and operating assets. Exploring opportunities in Nuclear Energy.
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Diversified into allied energy infrastructure business Actively explore opportunities in domestic Energy distribution states of gujrat Karnataka and Maharashtra have initiated private participation Participate in Energy transmission opportunities in INDIA Obtained Power Trading Licence and active participation trading business Foundation Blocks For GMR INFRA ENERGY ARE Diversified fuel mix Projects distributed across all the fuel types Hydro, Thermal & Gas Diversified revenue mix Mix of short-term & long-term short long Energy Purchase Agreements (PPAs) International Business Ambitions with Risk Management ,transforming itself into a global infrastructure player GMR is the larget airport developer in INDIA GMR OPERATIONS IN SGIA Istanbul Turkey It started Development of new international projects, terminal & operation of existing facility,will together handle 20 Mn. Taken over the facility for development and operations since May, 2008.Passengers,Concession of 20 years with investment of USD 650 Mn. GMR OPERATIONS Intergen N.V. Acquisition of 50% equity stake in Intergen N.V. InterGen has 12 Power Plants .Installed production capacity of app.energy generated.5000 MW capacity under development. New assets and assured off-take of 7700 MW in 5 countries. Strategy for transforming itself into a global infrastructure player Diversification of geographical risk. Exploit expertise gained during domestic projects Access to global resources and best-practices in all focus areas. Airports (including Airport Real Estate) and Energy are focus areas in the short to medium term Strategy in Global investment Invest in assets in developing countries with High growth potential Need for infrastructure expansion Enhance understanding of the sector without taking on substantial developer role. De-risk from India-centric business. Develop structural and organizational capabilities globally Stake acquisition in global infrastructure facilities for future expansion strategy.

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GMR Industries Ltd., - Agriculture Business Emphasizing an integrated cane processing play across the value-chain Expansion + Diversification Outlook Upward movement in Sugar prices in the long term However there is also need to reduce the possibility of downside in sugar through Diversification Strategy: Gradual expansion in capacities by 2012 Balanced mix of products (Sugar, Cogen, Distillery) to tide over industry cyclicality Optimize by-product mix through introduction of MDF (Medium Density Fiberboard) capacity Addition of value added products such as Refined Sugar in the portfolio Higher outputs through better cane management Improved yields Modern harvesting techniques Centralized procurement. GMR AVIATIONS PVT. LIMITED Brief overview of the business Fleet expansion plan GMR Aviation was established in 2006 to Fleet Present Planned Meet internal requirements of the Group companies Exploit opportunity in commercial market Strength of GAPL includes Support of strong GMR brand Young fleet with experienced crew and well trainedoperational staff. It has plans to diversify into allied aviation services at appropriate time.

Growth aspirations of GMR Aviation Limited include Consolidate its Air charter operations to meet global benchmarks in operational efficiency and service quality. Increase global footprints by focusing on international charters and eventually emerge as a leading business aviation service provider in the Asia-pacific region in the long term. Effective use of technology to provide entire spectrum of services in business aviation. GMR Groups achievements & recognitions during 2008 KPMG - Infrastructure Today Awards 2008 KPMG - Infrastructure Today Awards 2008 Most Admired Company in the Transport Developer category & the Infra Person of the year Most Admired Company in the Transport Developer category & the Infra Person of the year
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Routes Orbis Award through GMR Varalakshmi Foundation in enhancing the quality of life in the Routes Orbis Award through GMR Varalakshmi Foundation in enhancing the quality of life in the Communities living around the new Rajiv Gandhi International Airport at Hyderabad. Communities living around the new Rajiv Gandhi International Airport at Hyderabad. Award at the European Parliament, Brussels Award at the European Parliament, Brussels Award at the European Parliament, Brussels Award at the European Parliament, Brussels Outstanding Organization for Ethics in Business - Outstanding Organization for Ethics in Business SAP ACE 2008 Award Best GRC Implementation. SAP ACE 2008 Award Best GRC Implementation. 2008 CIO 100 Award - Operational and strategic excellence in IT. 2008 CIO 100 Award Operational and strategic excellence in IT. Economic Times Awards for Corporate Excellence 200607 - Entrepreneur of the year Economic Times Awards for Corporate Excellence 200607 - Entrepreneur of the year Indian Business Leader Awards 2007 by CNBC TV18 Most Promising Entrant to the Big League Indian Business Leader Awards 2007 by CNBC TV18 Most Promising Entrant to the Big League CNBC TV18 Sir M. Visveswaraiah Award 2008 Sir M. Visveswaraiah Award 2008 by the Federation of Karnataka Chamber Of Commerce and Industry (FKCCI) by the Federation of Karnataka Chamber Of Commerce and Industry (FKCCI) Most Inspiring Entrepreneur of the Year 2008 Most Inspiring Entrepreneur of the Year 2008 award by National Institute of Industrial Engineering (NITIE), Mumbai award by National Institute of Industrial Engineering (NITIE), Mumbai

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