Geography Reference
In-Depth Information
GMR has one of the highest profiles among the large Andhra-originated infrastructure
companies, stemming from multiple interests in India and abroad. Founded by G. Mal-
likarjuna Rao, the chairman, it is a classic example of entrepreneurial drive mixed with
effective project management and assiduous cultivation of contacts among politicians and
bureaucrats. Rao started in the family's jute and gold businesses and moved on to work in
Andhra's public works department before setting up a company to produce cotton ear buds,
and then a brewery and a sugar mill. Next, he bought shares in the Bengaluru-based Vysya
Bank, where he became chairman before selling his stake to ING of the Netherlands for a
reported Rs 350 crores.
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He began in infrastructure with power plants in Tamil Nadu and Karnataka in the
mid-1990s, and highway projects on the Golden Quadrilateral highway programme in the
early 2000s. Mobilizing his widespread contacts, he obtained the contract to build and op-
erate Hyderabad airport, with a 63 per cent stake in partnership with the Indian and Andhra
governments and Malaysia Airports Holdings. The airport opened in 2008 and was fol-
lowed by a concession for the New Delhi airport, plus airports in the Maldives (which it
later lost in a contract dispute) and Istanbul. At its peak, GMR had 17 power projects oper-
ating or under construction, four airports, nine highways totalling over 700 km and interests
in coal mining - all achieved in less than 20 years. This led the group to become over-
extended by 2011 when it was also running into delays on various projects, and financial
based energy business, the Istanbul airport, plus highway and power projects that were hit
The biggest controversy to hit GMR concerned the Delhi airport, which its consortium
won after a contentious bidding process presided over by Praful Patel as aviation minister.
The deal was criticized in a CAG report in April 2012, which estimated that there were
losses in government taxes and passengers' charges totalling some Rs 3,750 crore, partly
the consortium's right unilaterally to extend its 30-year concession for another 30 years,
which had not been in the initial government plans but had been approved by Patel. These
findings were challenged by GMR, which denied obtaining any special benefits.
GVK was founded by G.V. Krishna Reddy, who comes from a family that in the past has
held top posts in the Andhra government, as well as carrying out irrigation and road con-
tracts. He owns several of Hyderabad's leading hotels run by the Taj group, and since the
mid-1990s has developed power projects, the Bengaluru and Mumbai airports, and a spe-
cial economic zone in Tamil Nadu. More recently, he has taken on two airports in Indone-
sia and bought a $1.26 bn controlling stake in Australian coal mines with plans for a total
investment of $10bn to create one of the world's largest thermal coal mining operations.
