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GVK pips GMR to bag Navi Mumbai airport deal

City and Industrial Development Corporation (Cidco) received two bids for the much-delayed project that witnessed several ups and downs right from the conceptualisation stage

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Mumbai International Airport Ltd (MIAL) led by GVK Power & Infrastructure Ltd quoted the highest revenue share of 12.60%, thereby becoming the frontrunner in bagging the Rs 16,000 crore worth Navi Mumbai International Airport (NMIA) project.

City and Industrial Development Corporation (Cidco) received two bids for the much-delayed project that witnessed several ups and downs right from the conceptualisation stage. The other bid received was from Hyderabad-based GMR Infrastructure, which quoted 10.44% of revenue share starting from December 2019.

MIAL (GVK) had the first right of refusal to execute the project.

In the last couple of months, other qualified consortia Tata Realty-MIA Infrastructure and Zurich Airport-Hiranandani Group withdrew their participation from the project citing various reasons right from incomplete resettlement of project affected families to 42-months being too short a time among others, DNA Money had reported earlier.

After announcing the bidding process for the development of proposed NMIA on February 5, 2014, the final date for submission of financial bids was decided as January 13, 2017, after extending twice. Accordingly, financial bids for NMIA Project were opened on Monday afternoon.

"The project management consultants Louis Berger-KPMG would scrutinise the financial bids that were opened on Monday, followed by putting up the bid before the Maharashtra state cabinet for an approval," said Bhushan Gagrani, vice chairman and managing director of Cidco. State cabinet's nod is expected to come in within a month.

GVK Reddy, executive chairman of MIAL and founder and chairman & managing director of GVK, said, "It is a matter of immense pride for MIAL and GVK to have won the bid for building, developing and operating the Greenfield Navi Mumbai International Airport project. This is further testimony to our commitment that was ably demonstrated in the making of the iconic Terminal 2, along with the creation of efficient airside operations in a severely constrained Mumbai airport."

As per the plans, once the pre-development work is done, construction of the airport will commence and the first flight will take off only in December 2019. During its maiden year, the planned airport will cater to 10 million passengers and gradually as the airport's handling capacity will increase to handle 60 million passengers annually. Despite the recent overhaul, the existing Mumbai airport's capacity is almost saturated with 40 million passengers every year.

In order to develop an airport at Navi Mumbai, about 3,500 residents will be displaced. They are being provided with compensation packages.

In 2014, Cidco had approved commencement of the bidding process for NMIA by inviting the Request for Qualification bids. This airport will be developed through Public Private Partnership financial model, wherein Cidco will have 26% share, while the private developer will hold the rest. The cost of the project has been estimated at Rs 16,000 crore, which is close to four-fold increase since 1998, when it was estimated to be at Rs 4,766 crore.

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