Mihan cancels GMR contract for Nagpur airport development

Our Bureau Hyderabad | Updated on May 22, 2020

Mihan India Ltd has cancelled the contract for the development of Nagpur Airport awarded to GMR Airports Ltd (GAL), a subsidiary of GMR Infrastructure.

In October 2018, GMR had emerged as the highest bidder for the development, operations and management of Dr Babasaheb Ambedkar International Airport, Nagpur, in public private partnership (PPP) mode. GVK had also submitted a bid.

GMR was awarded the mandate by Mihan, the authority entrusted with the task of developing the airport, in March 2019.

Mihan is a joint venture between Maharashtra Airport Development Company (a Government of Maharashtra undertaking) and the Airports Authority of India. It had started the RFP (request for proposal) process to privatise the Nagpur Airport in March 2018. The proposed 30-year contract included the construction of a new terminal amongst other works. GMR had offered a higher revenue share and won the bid. However, some glitches with regard to the revenue share seem to have impacted the contract, as hinted at by a Union Minister earlier this year.

The contract was cancelled as the Maharashtra government was not happy with the revenue share quoted by GMR in the tender. The matter is likely to be contested and possibly renegotiated, said a statement.

In FY18, Nagpur Airport had handled 2.18 million passengers and 7,800 mt cargo. Over the past five years, the passenger traffic at the airport has grown at a CAGR of 11 per cent.

Published on May 22, 2020

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