Navi Mumbai airport project set to take off as land acquisition issue resolved

Manisha Singhal   Mumbai     Last Updated: November 13, 2013  | 19:40 IST
Navi Mumbai airport project set to take off
(Photo for representational purpose only)

The Maharashtra government has cleared a major bottleneck to pave the way for the construction of the Navi Mumbai airport, one of the state's most ambitious infrastructure projects. State authorities reached an agreement with farmers at a meeting on Monday on compensation for the land to be acquired for the project.

"The issue of land acquisition has been resolved as per the revised guidelines of the new land acquisition bill," Jayant Kumar Banthia, Maharashtra's Chief Secretary, told Business Today. "A few more clearances are now required from the government side."

The Navi Mumbai airport is proposed to be developed as a second airport for Mumbai, as the existing Chhatrapati Shivaji International Airport reaches its optimum level of handling 40 million passengers a year by 2014.

The project has missed its original 2009 timeline by several years due to delays in environment clearances, which came in 2010, and land acquisition problems.

State authorities and officials of the City and Industrial Development Corporation of Maharashtra (CIDCO), the nodal agency to implement the project, had held several meetings in the past year with the project affected people (PAP) to resolve the deadlock on land acquisition.

About 291 hectares of the total 2,020 hectare project land is to be acquired from locals to build a runway for the airport. The delay had led state authorities and the Ministry of Civil Aviation to start suggesting an alternate site for the project near Pune.

R.C. Gharat, a PAP leader, said on Monday the compensation process will be complete within four months. According to Monday's agreement, each landowner will get 22.5 per cent of the land back as developed plots. Of this, 12.5 per cent was part of the original agreement while 10 per cent will be given based on the current value of the land. Maharashtra Chief Minister Prithviraj Chauhan had recently said the agreement with the landowners will only be for developed land and no cash component will be involved.

Several big infrastructure companies like Larsen & Toubro and Reliance Infrastructure might be interested in bidding for the project. GVK Infrastructure, the operator of the Mumbai airport, has the first right of refusal.

But the project faces higher development costs. The project cost was earlier estimated to be Rs 10,000 crore, but people tracking the development say the cost will now rise on account of inflation and delays. The original plan envisaged the first phase of the three-phased project to be completed by 2014.

A.M. Naik, Chairman and Managing Director at engineering giant Larsen & Toubro, was previously cited in media as saying that the airport project cost will go up by Rs 5,000 crore on account of delays in land acquisition alone and this will challenge the viability of the project.

The project is challenging as it involves land filling of the swampy area, leveling of the land by removing a hill, and moving power transmission lines. "This cost is pegged at Rs 5,000 crore," said a person involved with the project who did not want to be identified. "But these will see an upward revision by at least Rs 3,000 crore."

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