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Global firms plan to join race for Rs 8,700 crore Navi Mumbai airport

Shaheen Mansuri, Mumbai, The Financial Express

April 04, 2011

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Global players are keen to be part of the R8,700-crore Navi Mumbai International airport project. Major airport operators such as Changi Airport, Aeroports De Paris, Fraport AG, TAV Investment Construction Corp, Malaysia Airport and Flughafen Munchen of Munich are some of the overseas firms that have evinced interest in the project, according to sources. A foreign partner will be roped in for the project for expertise in technology and in running a world-class airport.

Currently, global companies are a part of many airport development projects in India. For instance, the Mumbai airport is run by a consortium consisting of the Airports Company South Africa (ACSA), Bidvest Group and India's GVK. AAI holds 26% stake in the project, with GVK holding 37%, Bidvest 27% and ACSA, 10% Similarly, Delhi airport is also run by a consortia led by GMR and Fraport (which runs Frankfurt airport).

Vinod Wadhwani, director, aviation, ports and BFS, Ambit Corporate Finance said, "The project will move on a fast track because of the importance it assumes against the backdrop of increasing air traffic. Nearly 26% FDI can be expected in this project, but the finer details of the master plan, which will describe the FDI limit, is yet to be out." Said T Satre, managing director, City and Industrial Development Corporation (Cidco), the nodal agency for the Navi Mumbai airport project. "The process to issue the tender document is on and will be done by July. "Engineering and construction consultant Louis Berger Group is currently preparing a comprehensive master plan, project, procurement and other necessary reports to help finalise bids to be issued for selecting a strategic partner for developing the proposed project. The Louis Berger Group is an internationally recognised consulting firm that provides engineering, architecture, program and construction management, environmental planning and science, and economic development services.

The proposed Navi Mumbai airport will come up on a public-private partnership model, with the private partner getting 74% equity and the Airports Authority of India and the state government contributing 13 % each through Cidco. FE had earlier reported that a host of corporates, including the Sajjan Jindal-led JSW Group, Ruias-controlled Essar Group, Balaji Infra Projects (BIPL) and Subhash Chandra's Essel Group are likely to bid for the upcoming Navi Mumbai airport project. Corporate houses, which are keen to bid for the project, have already started courting technical collaborators before tying up with Cidco. After a gap of over five years, when the Mumbai and Delhi airports were up for modernisation in 2003-04, an airport development project has come up. There is going to be a lot more excitement amongst corporate houses to form a consortium with a foreign partner to build and operate Mumbai's second airport.

According to Cidco officials, the first phase of the airport will require about R4,424 crore investment and the airport will be handling about 10 million passengers. Phase two from the year 2016-2020 will require around R1,934 crore. The third phase from 2021-2025 will need R1,728 crore and the last phase (2027-2030) will need an infusion of Rs 636 crore.

Meanwhile, according to the latest industry ministry data, Maharashtra attracted maximum FDI of about R12,275 crore during April-September 2010, accounting for 34% of the total FDI in the country. According to experts, state like Maharashtra with good infrastructure projects has the potential to attract good FDI.

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