DIAL inks 5400 crore cover insurance deal

NEW DELHI: Delhi International Airport Private Limited (DIAL) has signed an insurance deal worth Rs 5,400 crore with a consortium comprising three major insurance companies in India. The deal will provide insurance cover for upgradation of the existing terminals, construction of new runway and an integrated passenger terminal (T3). Sources familiar with the deal said, DIAL, a joint venture company comprising of Bangalore-based GMR Group, Airports Authority of India (AAI), Fraport, Malaysian Airport and India Development Fund, is paying Rs 8 crore as premium charges for the insurance cover of its project during the construction period. “The consortium includes the Oriental Insurance Company, the National Insurance Company and ICICI Lombard. Oriental Insurance is a major stakeholder, insuring two-third of the whole project,” the source told SundayET. In the aviation sector, Oriental Insurance already provides insurance cover for Jet Airways, Air Sahara and Kingfisher. When contacted, The Oriental Insurance chairman and managing director, M Ramadoss confirmed the deal. It covers the airport project till its completion in 2010. The cover provided under this is similar to any other construction insurance policy, which provides protection for physical damage, increase cost of working and other losses such as those emanating from terrorist attacks, said Ramadoss. The project is being developed by DIAL under Public Private Partnership and has been given the mandate to finance, design, build, operate and maintain the Delhi Airport for 30 years with an option to extend it by another 30 years. The first phase of the airport is designed to handle 37 million passengers per annum (mppa). This phase is to be completed by March 2010 and will be fully operational before the Commonwealth Games. The project also involves construction of connecting taxiways, satellite fire lighting facilities, cargo terminals, aircraft maintenance facilities, utility services and other primary infrastructure support facilities. We ve got a stronghold in mega insurance. The company has gained a business of Rs 30 crore from Vedanta Group in 2006-07, and renewed contracts with NTPC for Rs 35 crore , added Ramadoss. In the past, The Oriental insurance has insured petrochemical major Reliance Industries Limited for an amount of Rs 16,000 crore, which is considered to be one of the biggest insurance deals in the country. The Construction Insurance business in India has witnessed a boom particularly in the backdrop of various infrastructure development initiatives taken in different sectors. Delhi Airport irrespective of being developed by a private player or government itself is a national asset. The same trend is also visible in the West, where all mega-projects are insured against any threat, be it emanating from natural calamities or terrorist attack, says Kapil Kaul, CEO Indian subcontinent, Centre for Asia Pacific Aviation
source:Economic Times