PM Modi lays foundation stone of Navi Mumbai airport, phase I to be ready in 4 years

 E Kumar Sharma   Mumbai     Last Updated: February 18, 2018  | 17:35 IST
PM Modi to lay Navi Mumbai airport foundation stone, phase I to be ready in 4 years

Prime Minister Narendra Modi laid the foundation stone of the long overdue airport project at Navi Mumbai on Sunday. PM Modi said, "Issue of Navi Mumbai airport has been pending for years. And, this is not the only project that is pending. When I assumed office I realised there were several such projects. That is why we began a Pragati initiative and gave priority to completion of projects."

"In our country, nearly 450 planes are operational. 900 new planes will be bought this year. Aviation sector is moving ahead," he further said.

Sources familiar with the project development told Business Today that GVK group, the diversified infrastructure major working on the project, is confident that first phase of the airport with the capacity to handle 10 million passengers per annum will be ready in another four years.

This is despite the fact that land acquisition for the project is not complete yet. A small plot in the middle of the project site remains to be acquired. The group is confident of getting this done as the local administration seems keen to cooperate. Almost 3000 acres, which is bulk of the land for the project, has already been acquired with the key runway region totally clear.

For connectivity with Mumbai, which is not the responsibility of the airport development company or the state administration, contracts have been placed with Larsen & Toubro and Tata Projects for the trans-harbour link, billed as India's largest sea bridge.

On the key issue of financing, biggest challenge for any of the debt-laden infrastructure majors in the country today, GVK does not seem to anticipate problems. The first phase of Navi Mumbai Airport is expected to cost around Rs 6,000 crore. The internal accruals of the current Mumbai International airport are sufficient to take care of the equity requirements. Going by the project cost, this would incur equity requirements to the tune of around Rs 1,200 crore. For rest, GVK would raise debt from the banks and, going by our sources, the banks seem more than willing to participate.

The Hyderabad-headquartered GVK Group had led the consortium that modernised and re-developed Mumbai's Chhatrapati Shivaji International Airport in 2006. Mumbai International Airport Pvt Limited (MIAL), the same consortium, has a 74 per cent stake in the Navi Mumbai International Airport. This greenfield airport is being constructed at Ulwe Kopar near Panvel, and like the current international airport, will get both international and domestic flights. It has become necessary as the current airport, handling 48 million passengers a year, is nearing its full capacity of 55 million passengers per annum. It is anticipated that it will reach full capacity by the next year or so, making the new airport necessary. The company signed the concession agreement in January this year and in February last year, its bid was accepted.

For GVK, which has nearly stopped bidding for new projects and is focused on looking at various ways to prune its debt - its total debt today is around Rs 23,000 crore. Though when calculated, as per the new Indian accounting standard IndAs, it comes to around Rs 15,000 crore. The Navi Mumbai airport project is the only major project it is taking up recently. This perhaps has to do with the economics and its potential of the project, apart from GVK having the first right of refusal in the project.

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