Tata Realty and Infrastructure (Tata Group) is preparing a possible joint venture with Heathrow Airport's biggest shareholder, Spain's Ferrovial to bid for Navi Mumbai International Airport PPP project.

Both Ferrovial and Tata Realty (Tata Group) are among the 20 companies that participated in a pre-bid meeting held by the City and Industrial Development Corporation of Maharashtra (CIDCO).

Representatives of Zurich Airport, Mumbai International Airport Limited (MIAL), Srei Infrastructure Finance, Samsung C&T, IL&FS, GMR Group, Shakat Aviation, Walnut Aviation, Essel Infrastructure, IRB Infrastructure Developers, Tata Projects (Tata Group) and Vinci Concessions India were also present.

Bidders are expected to submit qualification documents by June 18 although some bidders had requested an extension for the RFQ.

The airport will be developed on design, build, finance, operate and transfer (DBFOT) basis and the work will be carried out in two phases.

The project cost is estimated at R118.58 billion (US$1.90 billion) by the second stage - at which point capacity will reach 25 million passengers.

It is important to highlight that Mumbai International Airport Limited (MIAL) - the GVK-led operator of Chhatrapati Shivaji Airport - will have first refusal on the contract. MIAL will qualify automatically for bidding, subject to satisfactory performance at the existing airport, and will have the opportunity to match any opposing bid if its financial proposal is not more than 10% lower than the highest offer.

Airports Authority of India  and the Government of Maharashtra (throughCIDCO) will take 13% each of the airport equity, paid for by its R23.58 billion (US$377.46 million) investment in pre-development costs. The winning bidder will repay the balance of that investment through annual instalments from the eleventh year of the concession.

The Navi Mumbai airport project will be developed on 1,160 hectares. It is expected to have a yearly capacity of 60 million passengers. The new airport is intended to relieve capacity pressure on the Mumbai Metropolitan Region, where air traffic demand is projected to exceed 40 million annual passengers by 2017 and 100 million passengers by 2030.