GMR wins tender to upgrade and operate Nagpur Airport in India
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GMR Airports Limited, a subsidiary of GMR Infrastructure Ltd., has announced that it has emerged as the highest bidder for the development, operations and management of Dr. Babasaheb Ambedkar International Airport, located in Nagpur, Maharashtra, central India.
MIHAN India Limited (MIL), a joint venture between Maharashtra Airport Development Company (a Government of Maharashtra undertaking) and Airport Authority of India, launched the Request for Proposals (RFP) process to privatize the airport in March this year.
The project involves upgrading, modernisation, operation and maintenance for a period of 30 years and includes construction of a new terminal.
In FY2017-18, Nagpur Airport handled 2.18 million passengers and 7,800 million tons of cargo. Over the past five years, passenger traffic has grown at 11% CAGR, while the airport ranks 17th in India in terms of cargo traffic. The host city, Nagpur, is the 13th largest city in India and is fast emerging as a major IT/ITES, logistics and aerospace hub, along with a major manufacturing base.
Of the five prequalified proponents, two bidders submitted final proposals. GMR's remaining competitor was Indian conglomerate GVK, also active in the national airports sector.
Although GMR has not revealed its winning bid price, the RFP for the project stated that the selected private partner would form a new company with MIL, in which it would hold a 74% equity interest and contribute INR16.85 billion (US$230.7 million).
As GMR submitted the highest revenue share bid, it has automatically won the tender. The company has stated that it expects to receive a Letter of Award shortly.
This is GMR's second major airport award this month, as the company received a Letter of Award for a greenfield airport PPP project in Heraklion, located on the Greek island of Crete, less than two weeks ago. In consortium with GEK Terna, GMR will deliver a 72,000m2 terminal, a 3.2km runway, a commercial zone and road infrastructure. The estimated cost of construction is EUR520 million (US$602.7 million) and the concession period is 35 years.
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