CIDCO will hold 26% equity in the airport project, while the private developer, to be selected through a bidding process, will hold the remaining stake. The airport, which will handle around 10 million passengers per annum, is touted to be one of the biggest greenfield airport projects after opening up of the sector to private players in 2006, and will be developed through public-private participation.
These corporates have infrastructure verticals in their respective conglomerates with investment interests in various projects including that of airport development. A senior CIDCO official told FE that the bidding will take place in a few months time. He further said that top 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.
When contacted for the story, a spokesperson at the Essar Group said, As a group, we keep on looking at growth opportunities in sectors in which we are. We cant comment on any specific proposal. JSW, however, declined to comment on the matter. Vishal Kalantari, director, BIPL said, We have interests in infrastructure related projects and we are certainly keen to analyse the finer details of this particular project. However, the revised plan, costing and other details have yet to come out. We shall bid for it, if it is a fair opportunity for us. An email query sent to the Essel Group did not elicit any response.
Corporate houses, who 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," says Sushi Shyamal, partner - infrastructure practice at Ernst & Young.
There is a reason why airports seem so attractive to corporates. Unlike the airlines business, airports are generally profitable the world over. Indian airports, say analysts, will be particularly profitable since it is a new business that has just been opened up to private participation and the government guarantees near-monopoly in most cities.
However, GVK Power & Infrastructure (GVK PIL) is already gearing up to bid for developing the city's second airport. GVK already operates the Mumbai airport through its arm, the Mumbai International Airport Ltd (MIAL). GVK has the right of first refusal for the proposed airport as part of the agreement it had signed while taking over the Mumbai airport. Says a spokesperson from MIAL, We have an RoFR for Navi Mumbai and we will look forward to participate in the bidding process, when it is announced by the government. However, the RoFR does not guarantee that the project will go to GVK. GVKs bid cannot be less than 10% of the highest bid as per the clause in RoFR agreement. However, the bidding terms are expected to be similar to those that had been set for the Delhi and Mumbai airport ventures. Some of the criteria for bidders will include expertise in airport business, number of years spent in the business, and turnover.