Feb. 19--MUMBAI -- The Maharashtra government expects at least a dozen international airport companies, including Changi Airports International Pte. Ltd and Fraport AG, to bid for the proposed Navi Mumbai International Airport near Mumbai, and says that most hurdles surrounding the airport project have now been cleared.
In an exclusive interview, Sanjay Bhatia, vice-chairman and managing director of the City and Industrial Development Corp. of Maharashtra Ltd (Cidco), said that he has already met with one potential bidder, Flughafen Zurich AG, and that meetings with some of the leading airport developers from the UK have been scheduled.
The Hochtief Group of Germany, a consortium of Ferrovial SA and Macquarie Group Ltd, Flughafen Munchen GmbH of Munich, Aeroports de Paris of France, TAV Airports Holding Co. of Turkey, Malaysia Airports Holdings Bhd, ADC and HAS Airports Worldwide Inc. of Texas, Abertis Infraestructuras SA of Spain and Dublin Airport Authority Plc of Ireland are some of the other firms that could participate in the bidding process, said Bhatia.
The last date to apply for the request for qualification (RFQ) document is 18 June and the announcement of pre-qualified applicants is scheduled for 5 August. On 5 February, Cidco floated a global tender for the proposed Rs.14,574 crore Navi Mumbai International Airport spread over 1,160 hectares and with the ability to handle 60 million passengers a year.
The government gave an in-principle approval for setting up the new airport in 2007, but trouble in securing land for the project led to significant delays. On 19 August 2010, former aviation minister Praful Patel said the Navi Mumbai airport should have been operational by 2011 in view of the growing traffic and congestion at Mumbai airport.
Besides global airport operators, the Hyderabad-based GVK Group will also bid for the project as it holds the first right of refusal for developing the proposed airport in Navi Mumbai; the new airport is coming up within 150km of the existing airport being operated by the group.
GVK had insisted on the inclusion of this clause in the Mumbai airport contract with the central government. If GVK's bid falls short of the highest bid by 10% or less, it will have the right to revise its offer to match the top bid and operate the airport.
The Navi Mumbai airport was conceived because the Chhatrapati Shivaji International Airport, run by the GVK Group, is expected to reach its peak capacity of 40 million passengers a year by 2014.
However, Bhatia clarified that there would not be any sharing of flight traffic between Mumbai's old and new airports -- a condition that could limit interest from developers as traffic allocation is critical for the viability of a second airport that is being built within a 150km radius of an existing one.
In cities such as New York and Chicago, where there is more than one airport, the airports are owned by the same entity. In London, where the airports are owned by different entities, the airport regulator allocates the traffic.
"The first flight at Navi Mumabi airport is expected to take off in 2018. There is no case for flight allocation as it will be handling 10 million passengers per year in the first phase. Mumbai's current airport is capable of handling only 40 million passengers. There is a need for Mumbai to handle a capacity of 100 million by 2030," Bhatia said.
According to Kapil Kaul, chief executive officer (South Asia) at consultancy firm Capa Centre for Aviation, apart from flight allocations, inadequate road connectivity between the site of the new airport and the city, remains a risk for the project.
Capa expects the new airport to be operational only by 2020.
"The sense of purpose and commitment in terms of ensuring start-up clearances missing at the state level was missing. Faster execution is critical for this project," Kaul said.
Cidco's Bhatia said the connectivity is being addressed and that the Mumbai Trans Harbour Link, connecting the city of Mumbai with Navi Mumbai, will be ready by 2018. He said Cidco also has plans for metro rail connectivity for the proposed airport.
Meanwhile, the state government has dropped the idea of examining alternative sites for the Navi Mumbai International Airport as it has secured all necessary approvals for the current site where it is still negotiating with farmers to acquire an additional 200 hectares it needs.
Cidco is offering Rs.15 crore a hectare, or 22.5% of the land back after it has been developed, while the farmers initially wanted Rs.20 crore or 35%.
In November, the state government and farmers from Ulwe village near Panvel in Navi Mumbai reached an agreement on the compensation package. The state government agreed to give 22.5% land back to farmers as developed plots.
Displaced farmers will also be given houses which are three times the size of their existing houses.
Cidco which holds 26% equity stake in Navi Mumbai airport project, will also carve out a 1% stake for affected persons.
Bhatia said Cidco is also training such people to increase their employability in the airport and other sectors.
Copyright 2014 - Mint, New Delhi
