Status Update: Key developments in big-ticket greenfield airport projects

Key developments in big-ticket greenfield airport projects

The central government has taken several initiatives for greenfield airport infrastructure development. The past two-three years have seen big-ticket greenfield projects make significant headway. However, despite the tremendous progress seen in terms of the development of such airports, a number of issues pertaining to complex administrative procedures and costly land acquisition still need to be addressed.

Indian Infrastructure provides an update on the key upcoming and ongoing greenfield airport projects…

Navi Mumbai international airport

After a delay of almost 10 years, the Navi Mumbai international airport was finally awarded to GVK Power and Infrastructure Limited in October 2017. The project is proposed to be implemented in four phases at an estimated cost of Rs 167 billion, and is expected to have a passenger handling capacity of 60 million passengers per annum (mppa). In January 2018, Navi Mumbai International Airport Private Limited (NMIAPL), the project’s special purpose vehicle (SPV), and the City and Industrial Development Corporation of Maharashtra (CIDCO) signed the concession agreement. The foundation stone for the project was laid in February 2018. Phase I of the project is expected to be completed by 2024. Earlier, Phase I was expected to be completed by December 2019; however, it was delayed due to various factors such as delays in land acquisition, weather conditions and pre-development works.

As part of the project, two runways and a terminal building will be constructed on 2,268 hectares of land. L&T Construction won the engineering, procurement and construction (EPC) contract for the project in August 2019. In August 2020, Adani Airport Holdings Limited entered into an agreement to acquire the debt of GVK Airports Developers Limited, which holds 50.5 per cent equity stake in Mumbai International Airport Limited, which in turn holds 74 per cent equity stake in NMIAPL. The investor has already acquired 23.5 per cent equity stake in NMIAPL from Airport Company South Africa and Bidvest, for a consideration of Rs 16.85 billion.

Jewar airport

On October 7, 2020, Noida International Airport Limited (NIAL) and Yamuna International Airport Private Limited (YIAPL), an SPV floated by Zurich Airport International AG, signed the concession agreement for the Jewar airport project in Noida, Uttar Pradesh. Due to the ongoing Covid-19 pandemic, construction work on the project has not been able to commence till date. In April 2021, NIAL started the prequalification process for construction tenders. The Uttar Pradesh government has increased the number of runways of Jewar airport to six from the earlier proposal of two. The first phase of the airport will be spread over 1,334 hectares and will cost Rs 45.88 billion. It is expected to be completed by 2023. Overall, the state government has allocated 5,845 hectares of land for the project. It is estimated to cost over Rs 295 billion.

Zurich Airport International is the main shareholder of YIAPL and is injecting Rs 20.05 billion into the development of the NIA. The project achieved financial closure in November 2020, with Rs 5 billion in funding assistance from HDFC Bank. In June 2021, YIAPL received the final credit sanction for Rs 37.25 billion from the State Bank of India. Meanwhile, the Housing and Urban Development Corporation has also provided financial assistance to the project. The state government allocated Rs 20 billion for the project in its 2021-22 budget.

The airport is proposed to be developed on a public-private partnership basis with a concession period of 40 years. In December 2020, a consortium consisting of Nordic-Office of Architecture, Grimshaw, Haptic Architects Limited and STUP Consultants Private Limited won a contract for the design of the passenger terminal building for the project.

Mopa airport, Goa

The Goa government had been planning a second airport at Mopa for decades. Although the project received in-principle approval from the central government in March 2000, it was mired in land acquisition and local litigation issues. In August 2016, GMR Airports Limited was selected as the build-operate-transfer concessionaire, with a concession period of 40 years (extendable to 60 years). The SPV for the project, GMR Goa International Airport Limited will develop the airport in four phases, with Phase I estimated to cost Rs 19 billion. The entire project is estimated to cost Rs 33 billion and will be funded entirely by the private developer. In February 2020, the CCI approved Aéroports de Paris SA’s acquisition of a 49 per cent equity stake in GMR Airports Limited and a 100 per cent equity stake in GMR Infra Services Limited for a transaction value of Rs 107.8 billion.

The phased development will involve the expansion of the terminal, commercial and cargo aprons, taxiways and aviation facilities, and the construction of a six-lane expressway linking the airport to National Highway 17. The airport will be able to handle 13.1 mppa upon completion of the fourth and final phase by 2045. GMR has awarded the EPC contract for the project to a Philippines-based firm, Megawide Construction Company. Currently, over 30 per cent of the construction work has been completed for Phase I of the project, which is expected to commence operations in August 2022. Court clearances and the Covid-19 pandemic led to delays in implementation of the project.

Bhogapuram airport

In April 2020, the Andhra Pradesh government issued the letter of award to GMR Airports Limited for implementation of the Bhogapuram airport project, following which GMR Visakhapatnam International Airport Limited, the project SPV, signed the concession agreement for project implementation in June 2020. The operation and maintenance period for the project is 40 years, extendable by another 20 years through a competitive bidding process. The state government has decided to reduce the proposed airport area to 2,200 acres from 2,700 acres, as the government will take 500 acres of land for commercial purposes. The foundation stone for the project is likely to be laid soon.

Dholera airport

The Dholera international airport in Gujarat is another greenfield project that had been languishing since it received approval from the Ministry of Civil Aviation in January 2016. The project is being implemented in a phased manner by Dholera International Airport Company Limited (DIACL), an SPV formed by the Gujarat government, at an estimated investment of over Rs 50.83 billion. The airport will be developed on 1,700 acres of land, and Phase I of the project is expected to be operationalised by 2024. In February 2021, the Airports Authority of India (AAI) issued a Rs 9.87 billion tender for the construction of the first phase of the airport. The Gujarat government has allocated 1,427 hectares of land for the project, and 75 hectares of government land has been allocated for commercial development.

In November 2018, AAI acquired a 51 per cent stake in DIACL, with the Gujarat government holding 33 per cent and the National Industrial Corridor Development and Implementation Trust holding the remaining 16 per cent stake. AAI signed an MoU for project development with the Gujarat government in January 2019.

New Pune (Purandar) international airport

The airport is proposed to be developed as a full-fledged international airport with Code-F standards over a period of 30 years. The project is being implemented by Maharashtra Airport Development Company [MADC] Limited at an estimated cost of over Rs 100 billion. The Maharashtra government gave administrative and financial approvals to the project in May 2018, following which the state cabinet approved the formation of an SPV in March 2019. CIDCO will hold a 51 per cent stake in the SPV, while MADC’s stake will be 19 per cent. The remaining 30 per cent will be divided between the Maharashtra Industrial Development Corporation and the Pune Metropolitan Region Development Authority. In February 2020, the state government released funds worth Rs 450 million for the project. The Maharashtra government has submitted the project documents with the centre, which is yet to approve the project. The project is expected to be completed by February 2024.

Other key upcoming airports

The other key upcoming airports include the Hirasar, Kushinagar and Sriperumbudur airports. Hirasar (Rajkot) airport is being implemented by AAI. In February 2020, Dilip Buildcon Limited was awarded a contract worth Rs 5.7 billion for detailed designing and EPC works on the project, after termination of the contract with Reliance Infrastructure Limited. The project is expected to be completed by August 2022. AAI has also signed an MoU with the Uttar Pradesh government to take over the development and operations of the upcoming Kushinagar airport. In June 2020, the central government approved a proposal to declare the airport as an international airport. The foundation stone for the project was laid in August 2020. Besides these projects, a number of greenfield airport projects have been proposed in cities/districts such as Hassan, Bijapur and Shimoga in Karnataka, Deogarh in Jharkhand, Dabra in Madhya Pradesh, Karaikal in Puducherry and Hollongi in Arunachal Pradesh.

To ease the increasing burden on existing airports, the government needs to focus on upscaling capacity through the development of more greenfield airports. To achieve this, the processes related to obtaining approvals and clearances and acquiring land that have slowed down project execution for greenfield airports need to be fast-tracked. During the ongoing Covid-19 pandemic, when private developers are facing funding issues, financial incentives will also play an important role in ensuring greenfield project development.