Wait for Navi Mumbai airport bids gets longer

Although the project received green nod in 2010, it has ben stuck largely due to delays in land acquisition, lack of approval from Centre

City and Industrial Development Corporation plans to start the bidding process for Navi Mumbai airport after completing the crucial land
acquisition process, a move that could delay the project and push up the costs further.

Although the project received the green nod November 22, 2010 it has been stuck largely due to delays in land acquisition and lack of
approval from the Centre for the issue of request for qualification (RFQ).CIDCO had planned to issue the request for RFQ in June in
parallel to land acquisition and rehabilitation of affected villagers. However CIDCO, which is the nodal agency for airport project, now
plans to issue the RFQ after the land acquisition issues are sorted out.

Navi Mumbai airport will be spread over 2020 hectares and of which nearly 1400 hectares are already in possession of CIDCO.

So far the CIDCO has to yet acquire 291 hectare of land as it has yet to arrive at an agreement with the project affected villagers (PAPs).
Although PAPs have withdrawn their demand for a compensation of Rs 20 crore per acre, they are now demanding return of a 22% of
developed land following the project implementation.

However, CIDCO chairman Pramod Hindurao told Business Standard “The issue was recently discussed by the Maharashtra cabinet which will take a final call on the quantity of developed land to be given back to the PAPs.”

On the other hand, CIDCO managing director Tanaji Satre said the Centre has indicated that RFQ can be issued only after the settlement of land issue. “We will discuss the present status and the CIDCO’s plan in this regard during the meeting slated on Monday with the visiting civil aviation minister Ajit Singh.”

A senior executive from a corporate house however feels that CIDCO should initiate bidding process as this will reassure international
investors and airport companies. "Investors are losing hope. Airports are being privatised in Brazil and even in Myanmar two airports were taken up for privatisation. The entire bidding process and financial closure could take upto a year. The action has to start,'' he said.

CIDCO has pegged the total project cost at Rs 14,500 crore, of which Rs 9,000 crore would be for phase I. Of the Rs 9,000
crore,pre-development cost is about Rs 4,000 crore and that would be spent on land acquisition, rehabilitation of affected villagers, site
development. CIDCO will be bearing the pre-development cost but it is yet unclear whether that expense will be treated towards project
equity or recovered from company which wins the bid to construct the airport. CIDCO also sought financial assistance from the Centre for pre-development costs while developers too are requesting a viability gap funding for the project.

Larsen and Toubro chairman A M Naik has expressed fears that land acquisition costs for Navi Mumbai airport may escalate project costs by about Rs 5000 crore "Navi Mumbai airport was moving reasonably well till theLand Acquisition Bill was introduced in Parliament. Now that has raised the expectation of farmers by 5-6 times. And if you go on that basis, no project will come up if the land cost itself is going up by Rs 5,000 crore," Naik told a news channel last year