A-I, along with Singapore Airlines ground-handling unit Singapore Airport Terminal Services Ltd (SATS) and another consortium of Bangalore-based Bobba Group and UK’s Menzies Global Aviation, had won a contract to handle cargo at BIAL.

All the parties are expected to put in close to Rs 40 crore each for setting up the cargo complex. The contract entails the players running the freight-handling service for a period of 20 years from April 2008 when the operations of the airport are expected to commence.

The AI-SATS consortium are considering two options of building either a single storey cargo complex or a two level cargo complex. A-I is also seeking architectural and project management consultancy services for the project which it expects to complete in the next 18 months, senior AI officials said.

Even though cargo handling revenues for A-I are minuscule at over Rs 50 crore, the sector is expected to grow rapidly on the back of rising air cargo volume. Bangalore airport alone currently sees a cargo traffic of 1.2 lakh tonnes annually which is expected to reach over three lakh tonnes in the next three years.

A-I is expecting to complete the cargo complex—which will have state-of-the-art facilities such as automated storage and retrieval system (ASRS), lowerable workstations, cold rooms and dangerous goods room— by January 2008.