V Jayaraman, Chief Operating Officer of property development at GMR Group says that the company is modernising the existing Delhi Airport and now are putting in Rs 3500 crore for the new runway.

Excerpts from CNBC-TV18's exclusive interview with V Jayaraman:

Q: How much land do you hold outside the Delhi-Gurgaon area and how have you valued that at?

A: We are into some exciting times here in the GMR Group, we are modernizing the existing Delhi airport and also building a new terminal . We have about 250 acres to develop, which is 5% of the 5000 acres plot,.

Q: How have you valued the 250 acres land that you currently hold and which you are looking to develop now?

A: The valuation depends on what is going to get developed there and what we have planned is phase one, which is about 39 acres. Delhi is essentially a hospitality sector though there is a severe shortage of hotel rooms and with the Commonwealth Games coming by 2010, the government is very keen that we develop hotels at this site.

So to start with, we are now going into the markets for developing hotels and other offices related to the airport functioning.

Q: You would still be working with some kind of a ballpark expectation. What do you think that this would be valued at?

A: At this point of time, something like Rs 3500 crore are being invested into the new runway and at terminal 3, which is a brand new terminal being built. So we expect these funds to come from these developments on the commercial side.

Q: In the first phase you said that you are expecting to develop 39 acres. What are the other phases and whether this first phase will be one year or lesser than that?

A: The site is very nicely located, it is next to the national highway 8 and also we are brining in the metro directly from the Cannaught place to the Delhi Airport, as it is going to be have a station at this property land where which we are developing. So it is well connected and therefore we have a superb opportunity for creating a new business center for Delhi. We are also developing a hospitality sector, which will consist of a wide range of hotels, which are required for the commonwealth games.

Q: How does it work? Is it long-term lease will you tie up with a lot of these halls that will be set up or will it be build, own, operate and transfer model?

A: The airport authority has given us this land on sixty-year lease at the end of which, if the government decides to take over whatever has been built on the site, they will compensate the property owners with the market value of the business. So, eventually it is a sort of perpetual lease and a sixty-year lease on which we are developing.

Q: For development yourselves, will you need to raise any money?

A: GMR's focus is around the airport development, and right now we are putting the new runway and a new terminal - T3. So the entire focus is on the airport development and modernisation and we would expect, especially as developers to invest in this area, which is essentially hospitality driven.