Adani, GMR Infra, Fairfax in race to build international airport in Jewar

The technical bids will be opened on November 6, followed by the opening of financial bids on November 29
Top infrastructure companies, including a foreign player, have bid to build and operate the second airport of Delhi in Jewar (UP), around 40km from Indira Gandhi International Airport. Sources aware of the development said Adani Group, Delhi International Airport Limited (DIAL), Canada-based Fairfax Financial Holdings, and Zurich Airport had bid for the project, which when fully functional, would entail an investment of Rs 15,000 crore. DIAL is operated by GMR Infrastructure.

The technical bids will be opened on November 6, followed by the opening of financial bids on November 29.

“We have seen a good response. Four firms have submitted bids, which is very encouraging since Jewar is a greenfield airport. The bidding will be made on per passenger basis, and will be completed in a single stage. The tender will be finalised on November 29,” said Shailendra Bhatia, officer on special duty, Yamuna Expressway Industrial Development Authority (YEIDA) — the implementing agency of the airport. He refused to disclose the participating entities. “Development work is likely to commence early in 2020 and the first phase expected to be completed by 2023,” Bhatia said. The airport has been long pending. In 2001, Rajnath Singh, then UP chief minister, first proposed an airport in Jewar. Mayawati, too, pursued the project after she became chief minister in 2007, but failed to make any headway.

The Jewar airport was necessitated after a study by the Ministry of Civil Aviation found that the existing airport in Delhi would get saturated in the next decade.

“The national capital, with 66 million passengers in FY18-19, is now the seventh-largest airport in Asia. It will see a significant growth when its fourth runway and fourth terminal are commissioned in three to four years,” said a report prepared by the Ministry of Civil Aviation.

DIAL, owned by GMR, by virtue of operating the Delhi Airport has a first right of refusal for the Jewar Airport. According to the agreement signed between Airports Authority of India (AAI) and GMR Infra while privatising the Delhi Airport in 2006, GMR Group has the right of first refusal (RoFR) for any airport that is built within a 150-km radius of the existing airport in Delhi.   According to the norms, GMR will be asked to match the highest bid offered after the bidding process for the proposed Jewar airport. GMR’s bid will be accepted only if it is equal to or less than 10 per cent of the bid offered by the highest bidder. 

It’s crucial for GMR to win bid for the Jewar airport as otherwise they will have a rival who would be competing to win airlines and passengers away from Delhi Airport— the most valuable asset in the company’s portfolio.

Bu the Adani Group has been very aggressive in its pursuit of airports. Earlier, the group bid twice than its rivals to win half a dozen airports. “Adani was very aggressive last time. But it is expected that with such a high capital investment required in the six airports, the group may be conservative in bidding for the Jewar airport,” an industry source said. Adani has also been aggressive to pick a stake in Mumbai airport but has been unable to after GVK group- owner of the airport managed to raise Rs 7,614 crore by selling 79.1 per cent stake in its airport business to three investors to pare debt and stave off the Adani Group’s proposed acquisition in Mumbai airport. 

Prem Watsa’s Fairfax group, which owns the Bangalore Airport, has also been very bullish to invest in infrastructure projects in India. “We are well-positioned to invest large sums of money in India,” Watsa recently wrote to investors.


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