After court verdict, GMR plans Nagpur airport takeover

Nagpur: After the high court ruled in its favour, GMR plans to go ahead with taking over of Nagpur airport and carry out the expansion as planned for the first phase.
The court has quashed Maharashtra Airports Limited’s (MIL) order, which set aside GMR’s allotment of contract after it won the deal to privatize Nagpur airport through a tender process.
A press release by GMR says that during 2019-20, Nagpur airport ran close to its full capacity handling about 30 lakh passengers and 9,500 metric tonnes of cargo during the financial year.
In the first phase that would be spread over a period of four years, GMR plans to construct a new terminal building. It will have a facility to handle 40 lakh passengers in a year. The other facilities would be a new taxiway, apron, car parking, approach road and a cargo terminal. The existing building will also be refurbished. The GMR has put up the initial capacity of cargo at 20,000 MT a year . It plans to develop a cargo hub based on the models in major air cargo hubs in Memphis, Paris, Hong Kong and Dubai, the release said.
The long-term plans include a second runway and building a capacity to handle 30 million passengers annually.
However, sources in the MIL said as against GMR statement of Nagpur airport handing 30 lakh passenger in 2019-20, the actual numbers were below 60% of what has been mentioned in the company’s release .
During the peak period, there were as much as 4,400 arrivals and departures each in a day. This has come down to 1,900 to 2,200 due to Covid-19. MIL has only recently started compiling the cargo figures. At present, 2.2 to 2.8 tonnes of cargo is being handled. The accounts are being finalized but there are chances of losses during the fiscal, a source said.
GMR had won the tender for privatization of Nagpur airport in 2018. However, MIL, a state government agency and the current operator of airport, had annulled GMR’s allotment and scrapped the bid. The bids were to be made on the basis of percentage of revenue to be shared with MIL by the private player.
Earlier, GMR had offered a 5.76% share on revenues which was later increased to 14.49%. MIL, however, cancelled the allotment even after that. The grounds were that MIL already got a higher revenue by running the airport on its own, as against what was offered by GMR. Even Union ministry of aviation in 2019 had questioned the need of privatization if the revenue was so low.