Cabinet approves upgradation, modernisation of Nagpur International Airport under PPP model

The Union Cabinet on Wednesday cleared the modernisation and expansion of the Nagpur International Airport under the public-private partnership (PPP) model, paving the way for major infrastructure development at the facility.

Addressing reporters after the Cabinet meeting, Ashwini Vaishnaw said the government had approved the airport’s upgradation and revamp plan.

According to an official statement, the Cabinet has also approved extending the lease tenure of land owned by Airports Authority of India and allotted to MIHAN India Ltd beyond August 6, 2039. The move will allow MIL to grant the airport licence to GMR Nagpur International Airport Ltd (GNIAL).

The civil aviation ministry said the revised lease period would now run parallel with GNIAL’s 30-year concession agreement.

“This is expected to usher in a new era of growth and infrastructure advancement for Nagpur airport. With private sector efficiency and government oversight, the airport is poised to see significant investment, modernisation, and improved passenger and cargo services,” the ministry stated.

The background to the project dates back to 2009, when Airports Authority of India and Maharashtra Airport Development Company Ltd formed the joint venture MIL, with equity participation of 49 per cent and 51 per cent respectively.

The release noted that although airport assets belonging to AAI were handed over to MIL in 2009 for operational purposes, execution of the lease agreement was delayed because of land demarcation-related issues. As a result, AAI land was eventually leased to MIL only up to August 6, 2039.

In 2016, MIL initiated a global bidding process to identify a private operator for the airport under the PPP framework. GMR Airports Ltd emerged as the top bidder with an initial revenue share quote of 5.76 per cent, which was later revised to 14.49 per cent of gross revenue.

The bidding process, however, was cancelled by MIL in March 2020. “This annulment was successfully challenged by GAL before the Hon'ble Bombay High Court. Thereafter, the Hon’ble Supreme Court of India also ruled in favour of GAL,” the statement said.