Swiss firm Zurich Airport outbids Adani, DIAL to win Jewar airport project

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Zurich Airport International, which operates eight airports across the world including one in Zurich, has won the bid to build Jewar airport. Set to become the largest airport of the country, it will be located some 80 km away from Delhi’s Indira Gandhi International Airport  (IGIA). 

Zurich Airport offered to pay Rs 400.97 per passenger, beating two of India’s top infrastructure firms Adani Enterprises and GMR Infra, which bid Rs 360 and Rs 351 per passenger, respectively. The other participant — Prem Watsa-owned Fairfax—bid Rs 205. The revenue has to be paid to the Yamuna Expressway Industrial Development Authority (YEIDA) — the nodal agency building the airport.

“India is a focus market for the company. The new airport will be fundamental to accommodate the expected flight traffic growth in the National Capital Region (NCR),’’ said a spokesperson of Flughafen Zurich, confirming the outcome of the bid. With this award, the company will participate in the expected growth of India’s aviation market and will implement best practices developed in Switzerland while maintaining Indian values, the spokesperson added.

This is not the first time that Zurich Airport is entering India. A consortium in which Zurich held a 17 per cent stake had won the bid to build and maintain Bangalore Airport in 2008. About 10 years later, it made a complete exit from the project. It had also tied up with Essel Infraprojects to bid for the second airport at Goa and with the Hiranandani Group to bid for Navi Mumbai airport.

Jewar airport at its full capacity is projected to cater for over  70 million passengers per annum with six runways and will be a competitor to GMR- owned Delhi International Airport (DIAL). 

By virtue of operating Delhi Airport, GMR had a first right of refusal for Jewar Airport, according to the agreement signed between the Airport Authority of India (AAI) and GMR Infra while privatising Delhi Airport in 2006. The GMR Group has the right of first refusal (RoFR) for any airport that is built within 150 km of the existing airport in Delhi. But according to the norms, GMR would have been asked to match the highest bid only if its bid was equal to or less than 10 per cent of the bid offered by the highest bidder.

Zurich’s bid at Rs 400.97 was the highest and Rs 10 higher after factoring in the 10 per cent of the GMR bid. ‘’Hence, the RoFR cannot be exercised,” said Shailendra Bhatia, officer on special duty, YEIDA. Jagannarayan Padmanabhan, director, CRISIL Infrastructure Advisory, said an international developer winning the project was a positive development for the sector. But it’s important to clear the hurdles at the earliest and give an unencumbered site for development, he said. 

The concession agreement allows the bidder a moratorium over the payment for six years since the start of the operations, according to an industry source. “This, along with the potential that it may become Delhi’s primary airport in the long run, must have helped Zurich Airport decide on the bid. They are also paying a premium to enter the market,” he said.

 The airport has been pending for long. In 2001, Rajnath Singh, then UP chief minister, first proposed an airport at Jewar. Mayawati, too, pursued the project after she became chief minister in 2007, but failed to make any headway.

A study by the Ministry of Civil Aviation that the existing airport in Delhi will get saturated in the next decade prompted the authorities to work towards an airport in Jewar.

The airport in Delhi, catering to 66 million passengers as of 2018-19, is the seventh largest in Asia. ‘’It will see a significant growth when its fourth runway and fourth terminal are commissioned in three to four years,” said a forecast report prepared by the Ministry of Civil Aviation.

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