The first phase of the Rs. 12-billion project is to be completed by September 2007 for handling a capacity of five million passengers and 100,000 tonnes of cargo per year. The Andhra Pradesh government has already acquired 5,000 acres of land at Shamshabad in Ranga Reddy district, 20 km from here, for the airport.

The decision to launch the work from September 2004 was taken on Tuesday with the signing of state support agreement and shareholders agreement between the state government and developer - an Indo-Malaysian consortium consisting of GMR Infrastructure Limited and Malaysia Airports Holdings Berhad (MAHB).

The shareholders agreement was signed between GMR Infrastructure Limited, MAHB, the Andhra Pradesh government and Airports Authority of India in the presence of Chief Minister N Chandrababu Naidu, GMR Group chairman G M Rao and GMR Group managing director B V N Rao.

The agreement provides for 74 percent equity contribution from the GMR-MAHB consortium and 13 percent each from Airports Authority of India and the state government.

The consortium was selected after an international competitive bidding process. The joint venture company to establish the international airport has already been incorporated under the name of Hyderabad International Airport Limited.

When completed, the new international Airport would have modern facilities to handle all types of aircraft, including the latest Airbus 380 with a capacity of 550 passengers.

According to officials, the airport would provide world-class standards of services to passengers. It would also have a modern cargo hub with required logistics, facilities for storage and handling.