The GVK Group that runs the swanky MIAL (Mumbai International Airport), pipped rival GMR Group on February 13, 2017, to bag the contract for the proposed international airport in Navi Mumbai, which will ease the severe congestion at the Chhatrapati Shivaji International Airport. The new airport was proposed in 1997 and received the government’s nod in 2007. The project got delayed due land acquisition issues and securing of necessary government permissions, including environmental clearance.
The implementing authority of the project, the City and Industrial Development Corporation (CIDCO), said that GVK-MIAL, which anyway had the first right of refusal as it runs the present city airport, bagged the financial bid by offering 12.60 percentage points revenue share, while GMR, which runs the Delhi airport offered only 10.44 percentage points revenue.
At the Request for Quotation (RFQ) stage, MIAL-GVK, GMR, Tata Realty-MIA Infrastructure and Zurich Airport-Hiranandani Group, were qualified for making financial bids. Except for GVK and GMR, others withdrew from the bid.
“The evaluation committee will prepare a report on the qualified bids which will be sent to the state cabinet for its approval and final decision about selection of the bidder,” CIDCO said in a statement.
Initially, January 9, 2017 was decided as the last date for submission of financial bids. While GVK had submitted its bid that day, others backed out, forcing CIDCO to extend the opening of the bids twice. The bids were opened today after submission by GVK and GMR groups. The project has for long been hit by land acquisition issues with only two-third of what is needed acquired so far.
The first phase of the airport is expected to be operational in 2019 and will be able to handle 10 million passengers annually, CIDCO said. The new airport is estimated to handle 60 million passengers by 2030, when it is expected to operate at full capacity.
Commenting on the success of the financial bidding, GVK Reddy, executive chairman, MIAL, said: “This award 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. We shall remain committed towards creating, designing and managing yet another state-of-the-art airport and deliver a world-class gateway from Navi Mumbai to the world. We look forward to working with the state government, CIDCO and all other stakeholders, for the successful implementation of this exciting and challenging project,” Reddy said.
The project will be executed on public-private partnership basis, and CIDCO will bear the pre-development work costs, which it will recover from GVK later. CIDCO is the nodal town planning authority in the state and builder of Navi Mumbai. CIDCO had failed to attract any bidders at the earlier two occasions and was forced to alter the project conditions, to make it attractive for developers.
The single-runway Mumbai airport till a few years ago was the largest and the busiest airport in the country, while the one in Delhi has three main runways. Delhi, Mumbai and Chennai airports are bursting at the seams, with passenger traffic that is rising over 23% every year, making India the fastest growing aviation market in the world. For the first time, domestic passenger traffic crossed 10 crores in 2016. Delhi’s Indira Gandhi airport was the 12th busiest airport worldwide, in November 2016. It handled 5.5 crore passengers in 2016, while Mumbai airport catered to 4.4 crore passengers.