GVK-led MIAL Wins Bid for Navi Mum­bai Air­port

Co that runs city’s ex­ist­ing air­port beats GMR Infra by of­fer­ing a higher rev­enue to Cidco

The Economic Times - - Companies: Pursuit Of Profit - Anir­ban.Chowd­hury @times­group.com

Mum­bai: A con­sor­tium that runs the ex­ist­ing air­port serv­ing Mum­bai has won the bid to build an­other in the dis­tant sub­urbs of Navi Mum­bai, mark­ing a mile­stone in the much-de­layed .₹ 16,000-crore project that aims to de­con­gest the skies above In­dia’s com­mer­cial nerve-cen­ter. In a two-pony race, Mum­bai In­ter­na­tional Air­port Ltd ( MIAL) out­ran GMR Infrastructure, of­fer­ing a higher rev­enue share to the pro­vin­cial govern­ment-owned city-builder, the City and In­dus­trial De­vel­op­ment Cor­po­ra­tion (Cidco). GMR of­fered a 10.44% share of rev­enue to Cidco, while the GVKled MIAL of­fered 12.60%, Cidco said in a press re­lease.

Nei­ther MIAL chief Ra­jeev Jain nor GVK MD San­jay Reddy made any com­ment on how MIAL plans to fund the project, of which MIAL will hold 74%, with Cidco own­ing the re­main­ing eq­uity.

A re­port on qual­i­fied bids will be sent to the Project Mon­i­tor­ing and Im­ple­men­ta­tion Com­mit­tee, Min­istry of Civil Avi­a­tion and then to state cabi­net for its ap­proval, Cidco said in its state­ment. There­after, the win­ning bid­der will be given 180 days for achiev­ing fi­nan­cial clo­sure of the project, said Bhushan Ga­grani, chair­man of Cidco.

Weeks be­fore the fi­nal bid, three of four short­listed bid­ders for the project had writ­ten to Cidco, the nodal author­ity for the project, say­ing they want to opt out cit­ing long-un­re­solved is­sues such an in­com­plete re­set­tle­ment of fam­i­lies in that area and de­lays in com­plet­ing pre-de­vel­op­ment work. They also raised the is­sue of an un­vi­able re­pay­ment struc­ture for the soft loans raised for pre-de­vel­op­ment.

The three bid­ders to opt out were GMR Infrastructure, Tata Realty & Infrastructure and the Hi­ranan­dani Group along with their ven­ture part­ners, po­ten­tially leaving only MIAL in the race at one point. GMR later came back into the race and sub­mit­ted fi­nan­cial bids.

Ga­grani said most of the is­sues raised by the bid­ders were clar­i­fied be­fore the fi­nan­cial bids were in­vited.

The air­port is seen as a crit­i­cal al­ter­na­tive to the con­gested air­port in the city.

The govern­ment had ini­tially ap­proved set­ting up the air­port in 2007, but the project ran into sev­eral en­vi­ron­men­tal and land ac­qui­si­tion prob­lems un­til the last stages of the fi­nal bid. Each stage has been de­layed for months, pend­ing clear­ances and pro­ce­dural clar­ity. MIAL, which runs Mum­bai’s ex­it­ing air­port in the city’s north­ern sub­urbs, con­sists of GVK In­dus­tries Ltd, Air­ports Com­pany South Africa and Bidvest. They to­gether hold 74% of the ex­ist­ing Mum­bai air­port and the state-run Air­ports Author­ity of In­dia holds the rest. The Navi Mum­bai air­port project is likely to be com­pleted in four phases ul­ti­mately giv­ing it an annual ca­pac­ity to han­dle 60 mil­lion pas­sen­gers. The air­port will span an area of 2,867 acres, with a ter­mi­nal build­ing of 523,000 square me­ters and two run­ways.

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