GVK to require Civil Aviation Ministry's certification to bid for Navi Mumbai airport

Written by Rhik Kundu | Mumbai | Updated: Feb 12 2014, 22:33pm hrs
Mumbai AirportGVK, Mumbai International Airport operator, will require govt certification before bidding for for NMIAL Project.
The operator of Mumbai International Airport Limited (MIAL) GVK will require certification from the Ministry of Civil Aviation before it can practice its first right of refusal or bid for the Navi Mumbai International Airport Limited (NMIAL) Project, Sanjay Bhatia, Vice chairperson and managing director of CIDCO, the nodal agency in charge of the project, told FEon Wednesday.

The required certification from the Ministry of Civil Aviation should consent that the Hyderabad-based company's performance at the Mumbai airport project has been satisfactory and in accordance to the Ministry's expectations.

Mumbai's airport operator GVK wason Mondaycriticised by Committee on Public Undertakings (COPU), in a report tabled in Parliament, for making highly irregular withdrawals from the escrow account meant for fees collected from passengers to provide security. The civil aviation ministry also came under severe criticism from the parliamentary panel for allowing this to happen.

I haven't been communicated anything on this regard, Bhatia said adding, But, according to the rules, only after they (GVK) give me the certificate will they be allowed to bid or given their first right of refusal.

The Rs 14, 574 crore NMIAL project is also attracting several international agencies and consortia apart from Indian companies like GVK, GMR, L&T, and others who are reportedly interested to develop the airport under public-private-partnership (PPP) model. The Zurich Airport Authority, which currently holds 5% stake in Bengaluru International Airport Limited (BIAL), one of the overseas contenders for the project.

They are very keen to bid for the NMIAL, said Bhatia, who meet Zurich Airport Authority representatives at Davos, as a part of Maharashtra chief minister Prithviraj Chavan delegation.

The British Airport Authority (BAA) is also another overseas party that may be interested in the project.

I am meeting the British Airport delegation. So, I presume they are also interested in NMIAL, Bhatia said.

He however added that since there are only a handful of companies that have the experience of running an airport by themselves, most foreign parties interested in the NMIAL, like their domestic competition, are most likely to form a consortia to make their bids for the airport project.

What we are specifying is that they (bidders) have to have three things in place financial capabilities, Rs 2375 crore of positive net worth, and they should have had handled airport project worth Rs 9500 crore in the last few years. Apart from this the interested parties should have a significant experience of running airport, Bhatia added.

CIDCO will continue to hold at least 25% stake in the project, while Project Affected People (PAPs) will hold 1% after the Public-Private-Partnership (PPP) is in place or the construction bid is handed out to a party by early next year. Whether Airport Authority of India (AAI) will have a share in the NMIAL project is yet to be decided by the authorities.

It is not yet finalized what will AAI's share in the project be or whether AAI will have a share at all in the project, Bhatia added.

At present CIDCO has acquired all the clearances required for the project and the bidding for the country's largest airport project is slated to also be one of the most aggressive. However, 250 hectares of land, comprising of 4-5 villages are still to be acquired.

We are confident of completing the remaining bit of land acquisition in the next four months before we approach the qualified bidders for Request for Proposal (RFP), added Bhatia.

NMIAL to be developed in four phases:

* Phase One: to be completed by 2018, 10 million passenger handling capacity per year.

* Phase two: to be completed by 2020-21, 25 million passenger handling capacity per year.

* Phase three and four: 40 million and 60 million passenger handling capacity respectively. To be completed between 2020-2030.

Bidding process for NMIAL (two stage process):

* Stage one: Qualification of interested parties/consortia who make application in accordance to provision of RFQ document. Technical committee will review all proposals, and qualify bidders by July 2014.

CIDCO will then announce the list of pre qualified applicants eligible for particiaption of second stage of bidding process, RFP, by August 2014.

* Stage two: The winning bidder to be announced by December 2014-Feb 2015. The PPP also to be in place by then.