GVK bid process for Mumbai airport hospitality zone soon

Infrastructure major GVK led Mumbai International Airport Ltd (MIAL) is gearing up to launch the bidding process for developing the hospitality district.

The project is aimed at monetising the land bank that has been offered to the airport company as part of the deal for modernising and developing the airport. It is likely to improve revenues further for the company.

According to sources, MIAL has already roped in an international property consultants for conducting the roadshows for the project for inviting the property developers to participate in the bidding process.

Apart from Indian developers, the company is keen on roping in international developers too to set up their projects at the proposed hospitality district.

“The master planning for the hospitality district is complete. We have submitted the documents for clearances with the authorities. Right now, we are waiting for the clearances. Once the approvals are in place, we will call for bids from the developers. In any case, the bidding will begin in the next calendar year,” a GVK spokesperson told DNA.

Though not willing to divulge the details of the development plan, the spokesman said that the project would have several hotels ranging from budget to luxury.

“We will come out with the details of the project once the approvals are in place,” he said.

However, sources associated with the development said that preparations are on for kicking off the bidding process in the first quarter of 2011.

“Now there is more clarity on the development. In fact, roadshows are already on not just in India but in a few international markets as well. The idea is to familiarise the potential bidders with the entire project, properties, terms and conditions of the PPP model being framed for leasing hold titles etc,” the source said.

The source also said that the project is going to be exactly on the lines of the one that was carried out at the Delhi International Airport Ltd.   

MIAL, a joint venture company owned by the GVK-led consortium (holding 74%) and Airports Authority of India (holding 26%), was formed March 2006 to manage and develop the Mumbai airport. Earmarking of sites for hotel projects is also part of the airport development plan.

DNA had first reported the development on December 12, 2009 stating that 8,000 hotel rooms across 14 new hotels are likely to come up in the vicinity of the Mumbai international airport under the plan to set up a hospitality district by the airport operator.

The bidding process however, seems to have got delayed by almost a year as it was scheduled to be completed sometime early 2010.

Elucidating reasons for the delay, industry sources familiar with the development said the project was being fine tuned and all the sites were being worked up on over the past several months.

“It’s a complicated process considering the government is involved and encroachments had to be cleared. In fact, the land parcels are very fragment and there was need to have a master plan super imposed. Besides, some land parcels had to be taken out as certain infrastructure developments are being pursued on those sites. The entire master plan had to be realigned, which I’m told has been done and it’s just the last mile connectivity that is currently being worked upon,” a source said.

Not delving into the precise details of the entire development, the source said that there are certain pockets in the development where the best possible use may not be a hospitality project.

“Yet the commitment made between the AAI and the airport operating company is to follow certain norms laid out and the developments will be well within those norms,” he said.