The City Industrial Development Corporation (Cidco), the nodal agency of Maharashtra government implementing the Navi Mumbai International Airport has set a stiff deadline of December 2019 for developer GVK Power & Infrastructure (GVK) to operationalise the first phase of the project.

As part of the first phase - Cidco expects the developer GVK Power & Infrastructure (GVK) to make one runway and a terminal building operational with a capacity to handle 10 million passengers by end of next year.

"It's achievable," said Bhushan Gagrani, Vice Chairman and Managing Director of Cidco referring to the first phase deadline.

Gagrani said the company will be handing over the land to GVK in 6-8 months.
"We took possession of 98 percent of the land," said Gagrani.

There were some "technical issues" with remaining land, which will be sorted out by Lok Adalats, Gagrani added.

Cidco has taken up the pre-development work that includes entire land development work of cutting hills, reclamation and improvement of ground up to 5.5 metres, diversion of Ulwe river, shifting the power lines; and relief and rehabilitation before handing over the land to GVK.

Cidco on its part is spending anywhere between Rs 2,500 crore and Rs 2,800 crore on the pre-development work.

So far Cidco was able to complete only 25 percent of the land development work.

The agency said the work is going on at "brisk pace in order to turn the NMIA operational as early possible."

GV Sanjay Reddy, Vice Chairman of GVK declined to comment.

GVK is in the process of tying-up finances for the project. The company has been bogged down by debt and has been making losses for many quarters.

GVK's net debt was around Rs 17,592 crore at end of FY17.

To deleverage its balance sheet GVK has sold its prized asset - the Bangalore International Airport Limited (BIAL) to Canadian-Indian billionaire Prem Watsa-owned Fairfax Holdings for Rs.3,492 crore.

An executive who follows the sector closely called the target by Cidco as "ambitious".

"The government wants to get the project operational before Maharashtra assembly elections, for that to happen Cidco needs to handover the land to developer as fast as possible, a longer monsoon and delay in tying up finances by developer are also potential spoliers," the above executive said.

GVK has won the mandate to develop and operate the Rs 16,704 crore Navi Mumbai International Airport in February last year.

The company last month signed the concessionaire agreement for the project that allows it to develop and operate the project for a period of 30 years from the appointed date, which is extendable for further 10 years.

The project when fully completed will have capacity to handle 60 million passengers per annum.

The concessionaire agreement paves the way for the creation of a special purpose vehicle - Navi Mumbai International Airport Pvt Ltd (NMIAL) in which GVK holds 74 percent, while the balance is held by Cidco.

On Sunday Prime Minister Narendra Modi performed the ground breaking ceremony of the project

Planned over two decades back to meet the growing needs of Mumbai and decongest the existing Mumbai International airport at an investment of Rs 3,000 crore, the project was delayed due to political indecision, environmental clearances and the funding.

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