Disclosing this to media persons in Hyderabad on Tuesday, AP's Minister for Roads and Ports Tummala Nageswara Rao said that the developer would achieve financial closure for the project by March 31. The government would also acquire 3,500 acres of private lands for the airport project, he added.

The project is proposed as a joint venture between the central government, Andhra Pradesh government and the private developer on equity participation. Modelled on the airport at Hongkong, the Hyderabad international airport would handle traffic of 50 million passengers a year in a 50-year time-frame.

The project is proposed to be implemented in four phases.

As per the present plan, the first phase of the airport runway of 4,200 metres, costing Rs 12 billion, would be completed by 2008 with provision to handle 10 million passengers every year.

This would double to 20 million passengers in the second phase with additional investment of Rs 3.68 billion. The final stage, to be completed by 2050, would push the handling capacity to 40 million passengers per year.

Two parties-- GMR Infrastructure India with Malaysia Airports Holdings Berhard and another consortium led by Zurich International Airport had submitted detailed proposals in December 2000. After evaluation, GMR MAHB has been selected as preferred bidder.

The preferred bidder asked for Rs 5.4 billion government support in the form of land, external infrastructure and capital subsidy for making the project viable.

The state government has agreed to provide 5,000 acres of land and external infrastructure costing about Rs 2.4 billion.

The central government, too, has agreed to exempt levy of taxes/fees for the greenfield airport, which can be collected in the form of development cess.