GVK signs concession agreement for Navi Mumbai airport

GVK Power and Infrastructure Limited has signed a concession agreement with City and Industrial Development Corporation (Cidco) to create a special purpose vehicle (SPV) for developing the long-delayed Navi Mumbai International Airport.

In the SPV--Navi Mumbai International Airport Limited (NMIAL)--Mumbai International Airport Limited (MIAL) holds 74% stake and Cidco holds the balance 26%. MIAL, a GVK subsidiary, operates Chhatrapati Shivaji International Airport in Mumbai.

The first phase of the airport is expected to be operational in 2019 with a capacity to annually handle 10 million passengers. At the moment, the company is still carrying out pre-development works for levelling the earth. The rehabilitation and resettlement process for 3,500 residents is yet to be through.

By 2030, an estimated 60 million passengers are expected to use the facility once it is completed.

As per the terms of bidding and agreement, the concession period is 30 years, which can be extended by a decade.

During the bidding process last year, four bidders namely, GMR Airports, MIAL, MIA Infrastructure Ltd (a joint venture of Tata Realty and VINCI Airport Concessions) and Voluptas Developers (a consortium of Hiranandani Group and Zurich Airports) were short-listed, but the last two withdrew from the fray leaving behind only GMR Airports and MIAL.

Later, GVK was awarded the airport project in October as MIAL offered a higher annual gross revenue share of 12.60% in comparison to GMR Airports's 10.44%.

The estimated cost has quadrupled to Rs 16,000 crore since 1998 (Rs 4,766 crore) when it was first conceptualised.

TAKE-OFF DELAYED

• The first phase of the airport is expected to be operational in 2019
   
• It is still carrying out pre-development works for levelling the earth