Navi Mumbai construction to commence in 2009
Civil Aviation Minister, Praful Patel, confirmed construction of Mumbai’s USD2 billion second airport project at Navi Mumbai is scheduled to commence by the end of 2009.
The Ministry earlier stated it aims to complete the tendering process by Mar-09. Maharashtra City and Industrial Development Corporation (CIDCO) commenced the process of inviting bids in early-08. This is another major opportunity for foreign investors.
The Indian Government first officially granted approval for construction of the project in late May-08, after the Environment Ministry granted in-principle approval, having previously objected to the Navi site on environmental grounds.
The Navi Mumbai airport development will be located on a 2,800 ha site at Khargar, located near Panvel, about 35 km from the existing Mumbai Chhatrapati Shivaji International Airport. Almost 70% of the land required is already in government possession, with CIDCO acquiring the remaining 30% of required land.
The greenfield project will be developed under a Public-Private-Partnership (PPP) model, with the private sector partner to be awarded a 74% shareholding, while Airports Authority of India (AAI) and the Government of Maharashtra, through the CIDCO, will each hold 13%.
Maharashtra Chief Minister, Vilasrao Deshmukh, earlier stated the airport aims to complete Phase I development by 2012. The project will be developed in four phases, with the final phase expected to be completed by 2028. Details include:
- 250,000 sqm terminal facility;
- Two parallel 4,500m runways;
- 100,000 sqm cargo facility;
- Six hangars;
- Infrastructure to accommodate A380 equipment.
The Navi Mumbai airport project plans to open with initial capacity of 10 million passengers p/a, and is expected to grow to up to 50 million by 2030, earning the developer an estimated average internal rate of return of approximately 17.5%.
Ministry of Civil Aviation states that meeting construction deadlines was crucial, as it forecasts the existing Mumbai Airport will reach full passenger handling capacity of 40 million by 2012. Mr Patel stated, "construction work should start by the end of next year or else Mumbai will suffer as the old airports are saturated".
- The proposed Navi Mumbai location is a 1,140 sq ha site in Panvel, located 35 km from Mumbai;
- The project is to be developed under the Public-Private Partnership model, with CIDCO and Airports Authority of India (AAI) each holding a 13% of the project, while private companies will hold the remaining 74;
- GVK Group, which operates Mumbai International Airport, holds the first right of refusal provided that its bid is no more than 10% below the highest bid.