Laborers work on an exterior wall of the newly built Terminal 2 of the Chhatrapati Shivaji International Airport. (Photographer: Dhiraj Singh/Bloomberg)

GVK Finally Gets The Contract To Build Navi Mumbai Airport

  • GVK-led consortium won bid for Navi Mumbai airport.
  • GVK offered 12.6 percent share of its revenue to CIDCO while GMR offered 10.44 percent.
  • Shares jump as much as 17 percent to highest since February 2016 as of 9:30 a.m.
  • Best performer on Nifty 500 Index.

A GVK-led consortium has bagged the rights to develop the Navi Mumbai Airport. This, after a second bidder, GMR Infrastructure Ltd., finally put in a bid for the project. Mumbai International Airport Ltd., promoted by GVK Power & Infrastructure Ltd., had been the sole bidder in the last two rounds, forcing the nodal authority, City and Industrial Development Corporation (CIDCO) to extend the tender process thrice.

In the latest round of bidding, GVK offered 12.6 percent share of its revenue while GMR offered 10.44 percent, prompting the government authorities to choose GVK as the successful bidder, said Bhushan Gagrani, the vice chairman and managing director of CIDCO.

Rajeev Jain, the chief executive officer of Mumbai International Airport Ltd. (MIAL), in which GVK holds 74 percent stake, also confirmed the news to BloombergQuint, adding that the government had given the company four years to complete the project.

The size of the contract remains undisclosed as of now. However, the total projected cost for the airport was Rs 14,574 crore in financial year 2013, according to information on CIDCO's website. The Navi Mumbai Airport is proposed to be developed under the public private participation (PPP) model. A special purpose vehicle (SPV) will be formed in which CIDCO and its nominees will hold 26 percent of the total subscribed and paid-up equity capital, while the rest will be held by a GVK-led consortium.

In an earlier interview to BloomberQuint, Jain had said CIDCO would have to complete a lot of work before the land could be handed over to the developer, specifically related to the relocation of villagers. It would take at least five years for the airport to be up and running, he added.