Supreme Court Clears Decks For Construction Of Mopa Airport In Goa
The development comes as a relief to GMR Infrastructure which was executing the Mopa airport project near Panjim, Goa.
The Supreme Court on Thursday cleared the decks for an international airport at Mopa, about 43 km from Panjim, Goa, by lifting the suspension of environmental clearance on its construction, providing relief for GMR Infrastructure Ltd. which was executing the project.
The order came on a petition filed by environmentalists who had challenged the airport’s construction, citing threat to green cover and natural water channels in the region. Construction came to a halt after the court issued a status quo order on Jan. 18, 2019.
The apex court has also appointed the National Environmental Engineering Research Institute to ensure compliance of its directions during construction of the Mopa airport.
GMR Goa International Airport Ltd., a subsidiary of GMR Infrastructure, was granted the exclusive right, licence and authority to develop, operate and maintain the Mopa airport for a period of 40 years with option to extend it by another 20 years. The Government of Goa has already provided vacant access and right of way to the subsidiary for more than 99.5 percent of the land identified for the project.
The first phase of the Goa airport, costing Rs 2,000 crore, was expected to be completed by FY20 has now been delayed by a minimum two years, according to Rohit Natrajan, research analyst at Antique Stock Broking.
Lifting the suspension of environmental clearance and an equity commitment of Rs 600 crore should result in regulated net profit of at least Rs 100 crore, once the airport is fully operational, he said.
Separately, GMR Infrastructure said it will sell 49 percent stake in its subsidiary GMR Airports Ltd. to Tata Group firm TRIL Urban Transport as against 44.44 percent planned earlier.
Impact Of This Development
The transaction would pare GMR Infrastructure’s Rs 9,000-crore debt by nearly 88 percent, according to BloombergQuint’s calculations.
GMR Airport’s equity is worth around Rs 18,000 crore, given that a 44.44 percent stake in the company was valued at nearly Rs 8,000 crore.
As per the initial plan, GMR Infrastructure would be allotted Rs 7,000 crore for debt reduction.
The additional five percent stake, valued at Rs 821 crore, is expected to bring down GMR Infrastructure’s debt to as much as Rs 1,179 crore, according to BloombergQuint’s calculations.