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GVK effects an intelligent re-jig of BIAL management – Bangalore Aviation

GVK effects an intelligent re-jig of BIAL management

While analysts are expressing apprehension on the high price GVK has paid to acquire its 29% stake in Bengaluru International Airport Ltd. (BIAL), the recent re-jig of the BIAL management structure shows insights in to how the GVK Group intends to re-coup its investment.

The management re-jig has effective created an “airport operations group” and a “land development group” which recognises and builds on core competencies. Both groups report in to owner Mr. G.V. Sanjay Reddy the Managing Director.

As many readers will be aware, the airport is built under a Public Private Partnership (PPP) model which has provided for over 1,000 acres (about 250 hectares) of land that can be developed by the airport owners for additional income beyond airport operations.

Till date, Unique Zurich, which has strong competencies in airport operations, lacked the political and “local knowledge” strength to push through the”airport city” development, something the GVK group with years of contracting and construction experience, are gurus of.

Mr. Marcel Hungerbuehler who was CEO prior to the take-over is now the President of BIAL and heads the airport operations group.

Reporting to him are:

Mr. Hari Marar who was COO is now Director Operations. He is being groomed as a successor when Mr. Hungerbuehler eventually leaves BIAL somewhere in 2011 or 2012.

Ms. Manisha Grover who was Chief Commercial Officer is now Vice President – Commercial and will be responsible only for the aiport retail areas for now. It is unclear if she will head commercial operations of the “airport city” land development project once completed.

Mr. David Frei previously Chief Infrastructure Officer, is now Vice President – Engineering and Maintenance.

The finance side is all GVK, Ms. Karin Steinemann who was reporting to Mr. Hungerbuehler has been replaced Mr. Bodapati Bhaskar as Director Finance who now reports to Mr. Reddy.

As the airport city development progresses, expect more faces to join that team.

GVK has obtained 12% of BIAL from Unique Zurich for Rs. 4,846 million ($105 million) and 17% from Larsen and Toubro for Rs. 6,860 million ($149 million. By the time GVK acquires the stake of Siemens, the last of the initial private promoters, it is expected to pay over Rs. 4,500 Crore ($1 billion).

The re-jig clearly shows the success strategy of GVK. Recognising it’s lack of specialised airport operations expertise, it has cleverly leveraged and compartmentalised the airport operations group, while GVK pushes ahead with the real money spinner of the airport project, the land development; something the Reddy family has both the money and political connections to achieve.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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