GVK-led Mumbai International Airport Limited has won the bid for Navi Mumbai airport by edging out rival GMR group. GVK, which runs the Mumbai and Bengaluru airports, offered 12.60 per cent in revenue share to the project implementing authority City and Industrial Development Corporation (CIDCO). GMR had offered 10.44% of revenue share.
Bids were received on Monday afternoon. The much-delayed project failed to attract any bidder on two earlier occasions and CIDCO was forced to make changes in project conditions.
Bids for the Rs 16,000-crore airport opened today after two extensions. Apart from GVK, GMR, Tata Realty and Hiranandani Developers were in fray but the two companies did not submit financial offers.
CIDCO joint managing director Prajakta Lavangate told Business Standard: “MIAL has offered us 12.60 per cent revenue share while GMR group offered 10.44 per cent. CIDCO’s technical evaluation committee will meet on Tuesday to evaluate the offer following which it will be submitted to the state government’s project monitoring and implementation committee. The bid will later be submitted to the state cabinet for its final approval. The letter of intent will be awarded within a month after the state cabinet’s nod and later the concession agreement will be signed with the selected bidder.”
The airport project will be carried out through public private partnership. Project implementing authority CIDCO will bear the cost of pre development works and the amount will be treated as a loan to the project developer. The first phase was slated to be complete by December 2019 but the aviation experts believe that it will take at least five years for the completion due to the challenges in project development.
One of the changes in concession agreement is extension to the repayment period of soft loan from 11 years to 15 years and the other is to cap the soft loan at around Rs 3,500 crore.
According to original condition, out of the total amount of Rs 3,420 crore spent on pre-development works Rs 430 crore will be treated as CIDCO’s equity contribution and the remaining as soft loan to be repaid in five equal installments from the 11th year onwards.