GVK Power set to bag Rs16,000-cr Navi Mumbai airport project

GVK Power & Infrastructure Ltd is close to securing the mandate for developing the Rs16,000 crore Navi Mumbai airport project with the project monitoring committee approving its financial bid.

GVK Power, which developed the Mumbai International Airport Limited (MIAL), won the contract in February 2017.

MIAL is a Joint Venture between the Airports Authority of India (AAI) and the GVK Industries Ltd-led consortium.

City and Industrial Development Corporation (CIDCO) of Maharashtra is the nodal government agency for the project, which will be built through public-private partnership (PPP) on a 'design, build, finance, operate and transfer' (DBFOT) basis.

It now has to secure the government's approval, which is likely in early November, following which CIDCO will issue the letter of intent allowing GVK to begin work on the project.

As per the procedure, the monitoring committee will recommend the GVK bid to the Maharashtra government and the cabinet will provide its stamp of final approval.

The project has seen inordinate delays, first in the conception stage when environmental roadblocks seemed to halt the project and later at the bidding stage.

Addressing GVK's annual general meeting in September, chairman GVK Reddy had said, ''We are awaiting the LoI for quite some time. There has been quite some delay. However, we expect this to be issued by middle of October.''

Meanwhile, pre-airport development works, including site levelling, removal of a major rock, reclamation of land, changing water course and rehabilitation of people living in three villages, worth over Rs2,000 crore have already been awarded.

The rehabilitation of villagers too, is at an advanced stage and is expected to be completed once the monsoon season is over.

Phase one of the project is expected to be ready within 36 months of commencement of work.

Since the project will be developed by MIAL, there would not be any need for a special purpose vehicle. The project will also be relatively easier to develop as it is a greenfield airport.

In the Rs16,000-crore PPP project, MIAL will have equity of 74 per cent while the Airports Authority of India and CIDCO will have 13 per cent each.