Tuesday, March 22, 2016

MIL board to consider airport privatization plan

The process to privatize Nagpur airport is expected to start within a week. Mihan India Limited (MIL), which currently runs the facility, will be putting up a proposal to invite request for qualification (RFQ) from private firms, during its board meeting to be held on April 29.
If the board approves the proposal in current form, the process of shortlisting private firms, which can qualify to bid for the deal, will begin. Financial bids will follow after that.
The strategic private partner will have to undertake development work to the tune of at least Rs1,420 crore in the beginning. The bidding process will be hinging on this amount which has been calculated on the basis of basic works to be done in the first phase. The amount, however, may slightly vary eventually, said a source related to the process.
The private company will be partnering with MIL through a special purpose vehicle in which the firm will get 74% stake. MIL will remain the minority partner in the SPV only. The airport will be handed over for 30 years of operations.
The financial bids will be made on the revenue sharing formula. The firm which offers the highest share will bag the deal. MIL is a joint venture of state government owned Maharashtra Airport Development Company (MADC) and Airports Authority of India.
MADC is developing the multimodal international cargo hub and airport at Nagpur (MIHAN) project and a special economic zone (SEZ), besides it. Roping in a private partner was part of the MADC's original scheme of late 1990s when idea of Mihan was conceived. Though a main part of the project, it could not take off so far.
In the first phase, Rs1,420 crore will have to be spent by the private partner in a period of four years. The works include building a second runway, new terminal building, parking bays and aerobridges. Other works will be taken up at a later stage on need basis which may increase the private partner's investment in the project, the source said.
MADC's vice-chairman-cum-managing director Viswhas Patil confirmed that the matter will be in the agenda of the board meeting. If approved, the process may kick-start in next 60 days.
"Nagpur airport will be marketed for its central location. It will also be the first hub airport for both passenger traffic and cargo as was envisaged in the original Mihan plan," said a source.
22/03/16 Shishir Arya/The Times Of India
To Read the News in full at Source, Click the Headline